Posts Tagged ‘real estate law’

CC&Rs Govern Unless Amended by HomeownersIn Arizona

December 2, 2011

A family’s back yard in a beautiful Ahwatukee subdivision is adjacent to the community park owned by the subdivisions homeowners’ association (“HOA”). Recently, the HOA planted three large ficus trees in the community park without any notice to them. The large ficus trees now obstruct their view of the community park. According to Arizona real estate law, does the HOA have the right to plant these large ficus trees in the community park without any notice to the neighboring homeowners?

The answer is probably. First off, there is no statute or court decision which grants a homeowner a view easement. A view easement, like any other easement, needs to be in writing and recorded. In other words, if the HOA wanted to grant this family a view of the community park, a view easement in writing and recorded would be required. Second, the Covenants, Conditions, and Restrictions (“CC&Rs”) of the community probably authorized the HOA to plant the three large ficus trees. Therefore, this family should review the CC&Rs carefully. If they were to determine that the CC&Rs authorized the planting of the three large ficus trees, CC&Rs generally can be amended by the written agreement of a percentage of the homeowners, e.g., sixty per cent of the homeowners.

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Prepaying a Year of Rent to Landlord?Use Caution

December 2, 2011

Due to of the collapse of the Arizona real estate market an Arizona couple has some bad credit problems. Unfortunately, they are losing their Scottsdale home to foreclosure before long, but they want to rent a home in the same neighborhood for one year. But, because of their bad credit, they are having issues renting any homes in their same neighborhood. They have the funds to pay all of the rent for one year in advance. Is it possible to pay rent in advance for one year? If so, will they forfeit any of this prepaid rent if the landlord loses the home to foreclosure in the next year?

The first thing you should know is, the Residential Arizona Landlord-Tenant Act generally prohibits a landlord from charging a security deposit, including any prepaid rent, of more than one and-a-half month’s rent. A.R.S. §33-1321. If the tenant, however, “voluntarily” pays more than one and-a-half month’s rent (usually for winter rentals when the tenant pays the entire three or four month’s winter rent in advance), the landlord can accept this additional security deposit. Therefore, if the couple is “voluntarily” prepaying one year’s rent due to credit problems, the landlord can accept this one year of prepaid rent.

Secondly, if the couple does pre-pay rent for one year, and the landlord loses the home to foreclosure, under a 2009 federal law the renters are generally entitled to stay in the home for the remainder of the lease term. If the new landlord after the foreclosure never receives any of the prepaid rent, however, the protection under the 2009 federal law is unclear. Therefore, as an Arizona real estate attorney, it is recommended that the tenants and the landlord deposit the one year of prepaid rent into an escrow account, to be distributed monthly to the landlord, or to any subsequent landlord after any foreclosure.

What Are a Commercial Property Tenants Rights After Foreclosure?

December 1, 2011

A small pet grooming business leased some space in a small shopping center. They wanted to make approximately $25,000 in tenant improvements in the back area of the leased space. Before making the improvements, they learned that the shopping center was in foreclosure. They contacted the lender (a national bank) and explained to them that they wanted to make the tenant improvements, but were not going to if we were going to be evicted after foreclosure. The lender’s representative said that the lease would be honored after the foreclosure, and that a longer lease could even be negotiated. However, an investor purchased the shopping center at the foreclosure and delivered a notice of eviction to us. Does the pet grooming business have any commercial property tenant rights to stay in their leased space? If they are evicted, does the investor have to pay them the $25,000 for the tenant improvements?

Under a 2009 federal law, a residential tenant generally has the right to stay in the home after foreclosure until the end of the lease term. A tenant in a shopping center or other commercial property, however, has no such right, and is subject to eviction after the foreclosure unless there is non-disturbance or similar language in the lease. The purchaser at a foreclosure sale, such as the investor who purchased the shopping center, has the right to evict the tenant, and has no obligation to reimburse a tenant for any tenant improvements. However, if the tenant can prove that they relied on the statement by the lender’s representative that they would be allowed to remain in the leased space after the foreclosure, they should have a claim against the lender for at least the $25,000 in tenant improvements.

Note: The pet grooming shop should immediately contact an Arizona commercial property attorney to review their lease to see if there is non-disturbance or similar language that will allow them to stay in the shopping center after the foreclosure.

Serious Penaltiesfor Filing False Liens

December 1, 2011

A gentleman was awarded hisGlendale family home in his divorce buthis ex-wife had the right to live in the home until it was sold. A buyer for the home was found and the closing sale of the home was scheduled. However, just prior to thehome’s closing, the ex-wife recorded a document saying that she was owed $50,000 from the sale of the home. Because of the document, the title company refused to close the sale of the home. Understandably, the buyer was upset and purchased a different home. The woman is emotionally unstable and just does not want to move out of the home. She has apologized but the homeowner is concerned that when another buyer is found she will record some “bogus” claim against the home again. Is there anything the homeowner can do to prevent her from recording a wrongful lien against the home?

According to Arizona real estate law, if a lien is wrongfully recorded against a home or other real property there are sanctions, namely, $5,000 or treble actual damages, whichever is greater, plus attorneys fees and court costs. A.R.S.’ 33-420(A). If these monetary sanctions do not deter you’re the ex-wife from recording a wrongful lien, a court can order her not to record any wrongful liens against the home. If your she were to violate this court order, she could be held in contempt of court with serious penalties, including jail time.

Note: If a wrongful lien is recorded in the name of an unidentifiable person or entity, e.g., invalid address or a non-existent limited liability company, a title company will generally require a quiet title lawsuit to determine that the lien is invalid. This quiet title lawsuit could be expensive, primarily due to the requirement of service of process by publication because the individual or entity is unidentifiable.

Even As-is Properties Require a Disclosure of Any Defects

September 19, 2011

A couple purchased an “as-is” a home in Show Low last summer. They had a home inspection which was satisfactory to them at the time. However, in the fall when they turned on the furnace they discovered that there was no ductwork leading from the furnace to the vents. They contacted the seller to complain and he said that he never used the furnace because he knew that the home had no ductwork. He said that he relied on the fireplace and space heaters during the winter months. They told the seller that they wanted to use the furnace and that expected him to pay for the ductwork, the seller said that they purchased the home “as-is.” The cost to install the ductwork will be approximately $1,500. Are there any Arizona real estate laws regarding this? Does the seller have any liability to us for the $1,500?

They seller in fact does have liability for the costs. Even though a home is being sold “as-is”, a seller is still required to disclose any known latent defects in the home. The lack of ductwork from the furnace to the vents was a known latent defect. They buyers should file a complaint against the seller in the Small Claims division of Justice Court. The Small Claims division has jurisdiction of disputes up to $2,500, and is similar to Judge Judy‘s television courtroom with no Arizona real estate attorneys and no appeals.

Arizona Real Estate Law Says Neighbor Can Trim Trees But Also Pay

March 29, 2011
Question: Our backyard backs up to a bridle trail in Tempe. Although our homeowners association owns the bridle trail, our neighboring homeowner is required to maintain this bridle trail. Our neighboring homeowner has contacted us about the branches of several of our twenty-year-old pine trees hanging over our back wall and impeding horseback riding on the bridle trail. One young lady was apparently almost knocked off her horse. Therefore, unless there is damage to our pine trees, we would have no objection to these branches being trimmed. Under Arizona real estate law, however, who has the obligation to pay for the cost of trimming these overhanging branches?

Answer: The general rule is that a neighboring homeowner is entitled to trim the branches of a neighbor’s tree that hang over onto the neighboring homeowner’s property, provided that this trimming will not kill the neighbor’s tree. Therefore, prior to trimming the branches of your pine trees, your neighboring homeowner should get an opinion from an arborist that such trimming will not kill your pine trees. Under Arizona law, unlike California law, the neighbor owning the trees is generally not required to reimburse the neighboring homeowner for the cost of trimming the overhanging branches. 145 Ariz. 115. Therefore, your neighboring homeowner should have to pay for the cost to trim your pine trees.

Five Day Notice Required by Arizona Real Estate Law to Evict

March 29, 2011
Question: Four months ago my husband was transferred to Phoenix by his company. We have been living with my husband’s parents since we arrived in Phoenix and last week we closed on the purchase of a home. The contract said that the seller would move out of the home at the time of closing, but the seller asked to stay for another week. That week is up, and now the seller wants to stay another ten days. What can we do?

Answer: In the contract the seller “promised” to move out at the time of closing. The seller broke this promise. The seller now wants to break another promise that the seller would move out after a week. You should politely but firmly say “no” to the seller’s request for an additional ten days, unless the seller pays compensation to you for this additional ten days. If you cannot reach an agreement with the seller, you are required to deliver a five-day notice to the seller to move out. You should also inform the seller that you will be contacting an Arizona real estate law attorney, and that the seller will be liable for damages, including legal fees and court costs to evict the seller. If the seller does not move out after five days, you should contact an attorney to institute eviction proceedings against the seller.

Read Your Real Estate Contract Carefully

October 28, 2010

When a couple purchased a new Queen Creek home they received a color brochure from the builder showing the features of the builder’s homes. However, after moving into the home, two of the features, a dishwasher and sunscreens, were not in the home. They contacted the builder and the builder said the contract did not provide for a dishwasher and sunscreens and the sales price would have been higher if they were in the home. Under Arizona real estate law, does the builder have to put in a dishwasher and sunscreens?

In general, a brochure is only a marketing tool, and the contract will control the type of extras in the home that the builder is required to construct for a buyer. The homeowners should have confirmed in the contract that a dishwasher and sunscreens were included.

Note: If a marketing brochure makes a statement, however, such as “solid wood doors” but non-solid wood doors are installed, a buyer may have a claim against the builder if there is nothing in the contract to describe the type of door to be installed. A court would probably rule that a reasonable buyer had the right to rely on the builder’s representation that solid wood doors would be installed.

Is a Two-Day Notice for Inspection Required For Arizona Commercial Property Leases?

October 28, 2010

A property management company does mostly residential property management for owners of apartment complexes, but also does some commercial property management for several small office buildings. Under Arizona real estate law the property management company knows that to furnish a two day’s notice to the tenant before inspecting the tenant’s apartment. According to Arizona commercial property leases, is it necessary to furnish a two day notice to an office tenant before inspecting that office?

Under Arizona law a residential landlord must furnish two day’s notice of an inspection of a residential property such as a home or an apartment, and can only inspect the property during reasonable times. Arizona law imposes no such requirement upon commercial landlords, however, and a commercial landlord is entitled to enter a commercial property at any time to inspect the commercial property, e.g., the tenant’s office, under reasonable circumstances, unless there is specific language in the lease regulating inspections by the landlord.

Note: In general, residential leases are highly regulated under a public policy to protect “mom and pop” in their homes. For example, there are at least fifty Arizona statutes regulating residential landlords and tenants, plus the new federal law that generally allows residential tenants to stay in their home after foreclosure until the end of the lease term. On the other hand, there are only a handful of Arizona statutes regulating commercial leases. The reasons for this lack of regulation in commercial leases are that there is not a public policy to protect commercial tenants, and that, commercial landlords and tenants are theoretically “big boys” who can afford to hire lawyers and other professional advisors to negotiate the terms of commercial leases. An example of this distinction between residential leases and commercial leases is that Arizona law specifically prohibits the landlord from “locking out” a residential tenant for non-payment of rent, and specifically prohibits a landlord’s lien on the residential tenant’s personal property until the payment by the tenant of delinquent rent. The residential tenant cannot waive this protection. On the other hand, Arizona law specifically authorizes the “locking out” by the landlord of a commercial tenant, and specifically authorizes a landlord’s lien on the commercial tenant’s personal property.

Arizona Real Estate Law States Murder on Premises Need Not Be Disclosed to Buyer

October 27, 2010

A couple has been hearing some rumors that there was a shooting in their Phoenix home several years ago. The homeowners are a little concerned about the rumors and are considering contacting the seller to get more information. Is Arizona real estate law the same as California where this type of information needs to be disclosed by the seller, such as in the case of the Nicole Simpson/Ron Goldman murders sixteen years ago at that Brentwood, California home?

The psychological stigma of a murder or other violent crime occurring at a home is generally a material, adverse fact that would need to be disclosed by the seller and the real estate agents to the buyer. The landmark ruling is a 1983 California appeals court decision permitting rescission of the purchase transaction by an elderly lady who had bought a home in which a mother and three children had been murdered ten years earlier. In response to that California decision, however, California passed a statute limiting to three years the requirement of disclosure of a murder or other violent crime occurring in the home. Therefore, in California the seller of the home where the Nicole Simpson/Ron Goldman murders occurred would only have been required to disclose those murders to any buyer in the three years following the murders.

In 1995 Arizona adopted a similar statute (A.R.S. §32-2156) that does not require the seller to disclose to a buyer a murder occurring in the home. This Arizona statute also protects the real estate agents in the transaction. Unlike California, however, there is no time period in the Arizona statute. In other words, even if the seller and the real estate agents in the transaction learn of a murder in the home the day before closing, under this Arizona statute they have no liability for failing to disclose this murder to the buyer of the home. This Arizona statute has been amended several times since 1995 to not require disclosure by sellers and real estate agents of numerous other material, adverse facts that under common law would generally need to be disclosed to the buyer. These amendments include no requirement to disclose to the buyer a natural death or suicide in the home, any felony that occurred in the home, HIV/AIDS of the seller or any occupant of the home, and, most recently, any sex offender in the neighborhood.