Feb 23, 2018

Terminating a Commercial Lease

*** This Blog Post Applies to Commercial Lease Agreements ***

Most commercial lease agreements have what is called a "holdover provision". The holdover provision details what will happen when the original lease ends and a formal extension is not filed. The holdover provision will say something like, "either the tenant or the landlord can terminate the lease with a 60-day notice".

However, in the event that the commercial lease is silent on how to terminate the lease once it has become month to month then A.R.S. § 33-341(B) which states in part: "A lease from month to month may be terminated by the landlord giving at least ten days notice thereof."

I find this amazing that a landlord can terminate a commercial lease by only giving the tenant ten days to vacate! What if you have a large warehouse full of supplies? What if you have a thriving medical practice? Without a pre-negotiated terms you may be subject to a ten day notice to vacate! A.R.S. § 33-1375(B) of the Arizona Residential Landlord - Tenant Act requires landlords to give their tenants at least 30 days to vacate. It's amazing that businesses are given even less time to pack up their stuff and leave!

What Should Commercial Tenants Do?

If you are negotiating a commercial lease agreement you need to specifically negotiate a "holdover provision". This provision should detail exactly how a lease will terminate. Depending on your type of business you may want to require a 90 day notice from the landlord.

Commercial lease agreements are usually for many years and involve hundreds of thousands of dollars in rent so before signing on the dotted-line make sure you have negotiated the terms that will protect your needs.

If you would like assistance from a commercial real estate attorney call us at 480-344-4035 or email me at cdunaway@davismiles.com.   

Jan 31, 2018

What is a 26.1 Initial Disclosure Statement?


Rule 26.1 of the Arizona Rules of Civil Procedure requires both parties of a law suit to exchange Initial Disclosure Statements. These disclosure statements are often referred to as "Rule 26.1 Statements" or "Rule 26.1 Disclosures" for short.

Rule 26(d)(1) of the Arizona Rules of Civil Procedure requires that the disclosure statement is provided to the opposing party within forty (30) days of the defendant filing an answer. These statements are not filed with the court but simply shared with the opposing party. Many years ago Arizona courts decided to do what they can to help avoid "trial by ambush". That is, that want parties to share whatever information that exists with the opposing party. In theory this is supposed to increase the likelihood of parties settling without court intervention.

What Must the Rule 26.1 disclosure statement must contain?:
  1. A list of all possible trial witnesses. Note, just because a person is listed it does not mean that they must later testify. It simply gives the opposing party notice that you may be interested in having this person testify at the trial and what they may be testifying about.
  2. A list of other people with knowledge. This list is to include all persons who will not be called as trial witnesses, but who have information that may be pertinent to the subject of the lawsuit.
  3. Statements. Each party to the lawsuit must provide a list of any written or recorded statements within their possession to the other party. 
  4. Copies of exhibits and information. Each party must disclose all documents or exhibits they wish to use to support their claim or defense. Including any electronically stored documents. 
  5. List of all other Documents. This list must include all other relevant documents that are known to exist, regardless of whether or not they are favorable to your case. 
If either party discovers new information after having shared an initial 26.1 disclosure statement then they are required to provide an "amended" disclosure statement with the opposing party.


Jan 30, 2018

Refunding a Tenant's Security Deposit

How to Properly Handle a Tenant's Security Deposit

Per A.R.S. § 33-1321(D) of the Arizona Residential Landlord and Tenant Act, a landlord must send a disposition of deposit letter to the former tenant within 14 business days. If the cost of the damage doesn’t exceed the deposit, the remainder of the deposit should be included. On the other hand, if the cost of the damage exceeds the deposit, this is your chance to state how much they owe you.

This letter needs to be sent within fourteen business days from the date your tenant vacated the property or the landlord can be subject to civil penalties.

If lawsuit arises in which a tenant claims their security deposit was kept unlawfully, and you didn’t send this letter, you could be at risk for “treble damages” – that is, three times what you kept unlawfully A.R.S. § 33-1321(E). Sending this letter goes a long way towards making sure all your bases are covered.

Our firm offers a free form letter which you can fill in and send to your tenant, or use as a template to create your own. Click here to download this form letter.

In cases where the tenant was evicted for nonpayment of rent, you can keep the deposit to cover the judgment amount, but you will still need to send a letter informing your tenant of such.  Additionally, if you have a judgment for unpaid rent, and there are a lot of damages to the property, you don’t have to put the deposit towards the judgment – you can still use it to cover the damages, and then pursue the judgment amount using wage garnishment or bank levy, which you can read about here.

If you need the help of an Arizona landlord - tenant attorney then give us a call at 480-344-4035 or email cdunaway@davismiles.com.

Jan 11, 2018

Evicted Tenant's Possessions


Often tenants will leave personal property on the premises after they have been evicted. As a landlord you cannot simply keep or throw away the former tenant's belongings. The Arizona Landlord-Tenant Act requires to you maintain their possessions for 21 days. 

Per A.R.S. § 33-1368(E) a landlord, must hold the evicted tenant's possessions for a minimum of 21 days from the day the Writ of Restitution was issued. As the landlord, you may;
  • Keep the tenant's belongings that the rental property for the 21 days,
  • Move the tenant's belongings to an off-site storage facility,
  • Require the tenant to reimburse you for the actual cost of moving and storing their belongings during the 21 day period,
  • Prohibit the tenants from ever returning to the property without your explicit permission.
As a landlord you may NOT;
  • Require the tenant pay for the judgment you obtained against them prior to releasing the belongings to them. Meaning you cannot require a tenant pay you for all back rent, late fees, attorneys' fees, and court costs prior to returning their belongings. (Again, you can only demand payment for the actual cost of storing and moving the belongings.)
  • Dispose of the tenant's property prior to the expiration of the 21 days.  
If you do choose to remove the tenant's belongings from the rental property use considerable care, you will be responsible for any damage to their belongings. It is a good idea to photograph, or video the premises, so that you have an inventory of what was left behind. Make sure the date can be verified through the images and video. This will also give you the opportunity to catalog any damage to the rental unit itself. Take the inventory prior to moving any of the personal property from the rental unit.

After the 21 day period, if there has been no contact from the evicted party, and they have not claimed, or made and agreement to claim their property, a landlord may sell the items or dispose of the items that were left behind.

Questions regarding the eviction of your Arizona tenant?  Contact Arizona Real Estate Attorney Clint Dunaway at 480-344-4035 or cdunaway@davismiles.com 

Dec 6, 2017

Motion for Summary Judgment

A Motion for Summary Judgment is a document filed with the Arizona court where the party is asking that the judge decide an issue—or the whole case—without the need for a trial. In order for a summary judgment to be granted by the court, the party filing the motion for summary judgment must demonstrate that there are “no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law.” This means that the undisputed facts presented in a particular case entitle one side to win because of the existing law relating to that issue.

When considering a Motion for Summary Judgment, the Arizona judges must view all “the evidence and all reasonable inferences in the light most favorable to the non-moving party.” Rowland v. Kellogg Brown and Root Inc. Per Arizona Rules of Civil Procedure 56(c), Only if the Arizona court makes a finding that no genuine issue of material fact exists can the moving party be granted a judgment as a matter of law. If issues of material fact exist then the Motion for Summary Judgment should be dismissed in its entirety.

Arizona courts are cautioned not to use summary judgment proceedings as a substitute for trials, the motion should be granted if the facts produced in support of the claim or defense have so little probative value, given the quantum of evidence required, that reasonable people could not agree with the conclusion advanced by the proponent of the claim or defense.

The burden of persuasion on the party seeking summary judgment is heavy and if there is any genuine issue as to a material factual issue is present, the motion should be denied.

So a summary judgment is provides an award to one party without a full trial. Additionally, the award can be for the full case or just a specific issue in dispute.

Statement of Facts and Affidavit
There are two documents filed in conjunction with the summary judgment itself; a statement of facts and affidavit of facts. The statement of facts lays out the facts as moving party sees them. In addition, to just stating the “facts”, they must also cite to specific documents that supports their statements.

Additionally, the moving party must file an affidavit where they swear under oath that each of the statements that make are true.

Why Did They File a Motion for Summary Judgment?
Just because the opposing party filed a Motion for Summary Judgment it doesn’t mean that you did something wrong or they have an extraordinarily strong case where the judge will enter judgment in their favor without even going to trial.

It is quite common for Motions for Summary Judgment to be filed in Arizona cases. In part they are filed because a judge can rule on just one aspect of the case. This will allow them to see if they can “chip at the edges” of our lawsuit and see if they can get anything dismissed at this time.

What Should you Do?
You must file a response to the Motion for Summary Judgment and explain to the Arizona judge why the case should move forward to trial. As part of the response a statement of facts and affidavit must also be filed. Similar to the opposing party's statement of facts you must cite a source for every statement you make to the court. Doing this can be incredibly tedious and time consuming. The response and accompanying documents must be filed within 30 days of receiving their Motion!

What If Motion for Summary Judgment is Granted?
If the motion is granted, the judgment on the issue or case is deemed to be a final judgment from which a party may appeal. An Arizona court of appeal can reverse the summary judgment and reinstate the claim in the Superior Court. However, this is rarely done and most summary judgments are upheld on appeal.

If you need the help of an Arizona real estate attorney call Clint Dunaway at 480-344-4035 or email me at cdunaway@davismiles.com.