A Decade of Change in the Arizona Rental Industry
September 1, 2022
Government actions impact every industry. However, the rental housing market in Arizona has been uniquely affected by various statutory and regulatory changes over the last decade, notwithstanding the CARES Act and the seemingly endless moratoriums during the pandemic.
In 2010, as the economy was trying to recover from the crash of multiple national industries, Arizona’s rental housing was navigating a new set of special court rules, the Rules of Procedure for Eviction Actions (“RPEA”). No longer governed by the regular court rules, the RPEA sought to address the expedited nature of eviction cases and create consistency in the process through the court system. These rules have been modified multiple times since their creation in 2009, most notably in 2019 and 2020 when the pleading requirements were adjusted to reflect the unique aspects of subsidized housing and compelling landlords to include relevant parts of the tenant’s rental file as part of the eviction pleadings.
Statutorily, our legislature enacted numerous laws designed to address what they perceived as “necessary adjustments”. For example, in 2012, as pesticide resistant bedbugs began to surge around the nation, Arizona created a new law that outlined the rights and obligations of both landlords and tenants to combat this issue in an attempt to regulate and reduce the bed bug impact.
Addressing the confusion between several different statutes, the requirements for a landlord to store a tenant’s property was consolidated to 14 days and certain items no longer need to be stored at all, in some circumstances. Animals also received some additional protections through a statute that requires the tenant to designate in the lease a person authorized to remove the animal if the tenant passes away. A Landlord is now permitted to remove the animal to be boarded following the eviction lockout or abandonment by the tenant.
The legislature expanded the rights of tenants to terminate the lease early due to 1) domestic violence; 2) sexual violence committed by an unknown assailant; and 3) situations involving law enforcement officials whose housing is compromised because of their employment. They also required a landlord to notify the tenant in writing when the rental home is in foreclosure.
There have been numerous statutory changes that impact short-term vacation rentals. The intent was to 1) clarify when a governing body can restrict or ban tenancies; 2) provide parameters of what a governing body can demand from landlords and tenants; 3) establish what fees can be charged that impact leasing; and 4) allow the property owner to designate a property manager to act on the owner’s behalf when interacting with an HOA. These laws were supplemented to create added protections for the vacation renters, and the neighbors, by creating licensing and disclosure requirements.
The legislature passed a 2017 law prohibiting the government from mandating standardized forms or notices, thereby allowing the continued use of property management forms created by AAR and others. Also, to encourage landlords to participate in the subsidized housing market, the legislature made it clear for the first time that the acceptance of a housing voucher provider’s portion of the rent did not act as a waiver by the landlord to their right to the tenant’s portion of the rent.
Changes to the reporting and payment of rental taxes (“TPT”), intended to simplify the process, has been and continues to be a challenge. In 2022, the legislature surprised everyone in a last-minute attempt to completely end this regressive tax that only impacts renters. Given the rise in rental rates over the past twelve months, this was an effort to help stabilize the rental markets. However, this striker bill did not survive this session, but may be revived in the future.
In the fair housing arena, the Department of Housing and Urban Development (“HUD”) issued guidance that requires landlords to adjust rental criteria when reviewing felony convictions. We also saw changes to local, state, and federal “protected class” categories. In one of the biggest changes following years of uncertainty, HUD finally provided clearer guidance to landlords and tenants alike on the rules and policies regarding assistance animals in housing. On the state level, in 2018, it became illegal to fraudulently represent that an animal is a service animal.
The landscape of the rental housing industry has changed dramatically over the last decade, sometimes at break-neck speed and velocity. Seeking the advice of an attorney, well-versed in the landlord/tenant arena, is the only way to navigate these ever-changing currents.
Denise Holliday, Esq
Hull, Holliday & Holliday PLC
7000 N 16th Street, Suite 120-#484
Phoenix, AZ 85020