Commercial Real Estate Laws Business Owners Should Know

Thinking of investing in or managing a commercial property in Arizona? While this can be very lucrative, the complex set of commercial real estate laws and non-contractual obligations that come with it can be burdening.

But it can be done. A well-run commercial building filled with trustworthy, long-term tenants is possible and can lead investors to a future of financial security. Essential to your success is relying on the experience of a business and commercial lawyer to guide you through the blueprint of commercial real estate.

Here are just a few Arizona laws to help you better understand what to expect.

Does a Commercial Landlord Need to Make Repairs?

According to Arizona law, commercial landlords must make all repairs and do whatever is necessary to keep the building and premises in a fit and habitable condition. This does not include custom updates or modifications; this kind of work needs to be detailed in the lease agreement.

On the other end of this law, lease agreements also require tenants to return the commercial rental property to the landlord at the end of the lease term clean and without damages – except for reasonable wear and tear. If the tenant causes damage to the property, the landlord can seek compensation for property damages.

The Tenant Quiet Enjoyment Law in Arizona

Commercial landlords in Arizona must provide tenants with quiet enjoyment of the leased property. This covenant included in every rental agreement prohibits the landlord from disturbing, preventing, or restricting the tenant’s full use of the property.

The intricacies of the Quiet Enjoyment Law vary from state to state, which means it is critical to work with an experienced attorney, who understands this right for commercial tenants in Arizona and the details that surround it.

What is a Material Breach in Arizona?

A material breach in Arizona is when there is a violation of a commercial real estate lease, which has had a substantial (or material) impact on the tenant and could be grounds for eviction; an immaterial breach is more minor and normally does not result in taking any legal action.

The standards of defining a material breach are more clearly defined in the Reinstatement (Second) of the Law of Contracts published by the American Law Institute (ALI), which discusses non-legally binding questions to consider, such as:

  • Was the injured party denied benefits and to what extent? If they are, how can that party be appropriately compensated?
  • Will the party failing to perform suffer forfeiture? If so, to what extent?
  • What are the chances that the party failing to perform will be able to fix the failure?

Before you confront a tenant or take legal action against a tenant you believe is in breach of a contract, you need strong evidence to support a material breach and a legal real estate expert to review your lease agreement in detail.

We can Help you Understand Commercial Real Estate Laws

Contact The Law Offices of William D. Black to better understand commercial real estate laws in Arizona to help your business run smoothly now and protect its profitability and success in the future.