On May 21, 2019, Governor Ducey signed new provisions regulating short-term rentals. The new laws aim to curb issues where short-term rentals are perceived as increasing noise and traffic in residential neighborhoods or are operated as “party houses.” Among other things, these new laws return control to municipalities, require permits for special events (such as weddings or banquets), and mandate that a person be designated for handling complaints. Due to prompting by Sedona and Paradise Valley officials, other regulations may be in the works as well….
The Arizona Supreme Court recently promulgated new rules for eviction actions. Per the new rules, before proceeding with an eviction action, landlords must serve tenants with not only the Complaint and Summons, but also with a copy of the controlling lease, any addenda to the lease, plus a written accounting of all rent payments for the prior six months. If the above documents are not properly served on the tenant, the tenant will have grounds to dismiss the Complaint for failing to comply with Rule 5, Arizona Rules of Procedure for Eviction Actions. The new law hopes to streamline evictions and help the parties understand early in the process what contract controls the dispute and what monies are owing. Read More
Join us Friday, September 27th from 9:00am – 12:30pm for our Short-Term Leases Seminar
At this seminar, attendees will gain an understanding of the landlord-tenant act, Arizona innkeeper statutes, homeowner association regulations and how they affect the short-term lease. Local industry experts will discuss important contract terms unique to vacation rental agreements and key differences between standard residential lease agreements and vacation rental agreements.
You won’t want to miss this seminar! Read More
Arizona law provides certain protections to homeowners who obtain purchase money financing for a home and then subsequently default. There are, however, important limitations to those protections. Read More
Late last week, the federal court in Alaska granted a homeless shelter’s request to stop the City of Anchorage from designating is as a public accommodation under the Anchorage Municipal Code. My friends and former colleagues at Alliance Defending Freedom have been litigating this case. The issues in this case may sound technical, but what is at stake has profound ministry implications for nonprofit ministries. Read More
“To whom much is given, much is required.” This principal applies to REALTORS® who, under Article 26 of the Arizona Constitution, may “draft any and all instruments, including contracts, incident to the sale, exchange, trade, or leasing of property.” See Article 26 §1, Arizona Constitution. Because of this authority, REALTORS® bear the responsibility of explaining to their clients what the real estate transaction documents actually mean. Morley v. J. Pagel Realty & Ins., 27 Ariz. App. 62, 66, 550 P.2d 1104 (1976). Put another way, to meet their standard of care, REALTORS® must have the real estate drafting skills and real estate knowledge of an attorney. Read More
Yesterday, the Seventh Circuit Court of Appeals decided an important case under the ministerial exception to employment discrimination laws. The case was Sterlinski v. Catholic Bishop of Chicago and it involved a lawsuit brought by Stanislaw Sterlinski who claimed he was fired from his position as a church organist because of his Polish heritage. Mr. Sterlinski used to hold the position as Director of Music but was then demoted to the job of organist and subsequently terminated from employment. The Court stated that, while Sterlinski was Director of Music, he was a “minister” for purposes of the ministerial exception to Title VII and could have been fired for any reason. But the question the Court wrestled with was whether Sterlinski could be considered a “minister” after he was demoted to the position of organist and, more importantly, who gets to decide the answer to that question? Read More
Vacation Rentals Update:
Congress Passes New Law Regulating
Short Term Rentals
Our state legislature and Governor have spoken, and short-term rentals are here to stay. Since the inception of online platforms like VRBO and Airbnb nearly a decade ago, short term rentals have steadily grown in popularity, in terms of demand and availability. The opportunity to rent a home or condo for a short duration provides new income opportunity to owners, and new lodging options for travelers and local residents alike. But not everyone is thrilled about short-term rentals in their neighborhoods. Stories abound about wild bachelor parties, wedding venues, and other large groups. Read More
By: Bryan Eastin, Esq.
The Court of Appeals recently issued an opinion explaining how easements can be extinguished in certain circumstances. Specifically, the Court ruled, as a matter of first impression, that common ownership of adjoining parcels might eradicate an easement even if the title owners are technically different. Here is why this matters. Read More
LAYING DOWN THE LAW
Christopher J. Charles, Esq. and David F. Kotter
Are Nonrecourse Loans Feasible?
At first blush, asking a lender for nonrecourse financing seems like someone asking for your first-born child – weird and awkward. But in today’s economic and real estate climate, under the right conditions, nonrecourse loans can make sense.
Practically speaking, most commercial loans are essentially “full recourse,” which means that because many lenders insist on personal guaranties, the guarantors are personally liable for the loan balance – meaning if the borrower defaults, the lender can sue the guarantor (and the borrower in some cases) for the unpaid balance, plus interest, and attorneys’ fees. And the lender can pursue collection against the guarantor’s non-exempt assets, which typically includes bank accounts, wages, stocks, bonds, automobiles, and of course, real estate. Read More
LAYING DOWN THE LAW
Christopher J. Charles, Esq. and Philip A. Overcash, Esq.
Legal Headaches: Can Tenants Sue Their Landlord for Annoyance or Emotional Distress Concerning a Property’s Condition?
The Arizona Residential Landlord and Tenant Act, A.R.S. § 33–1301 et seq., (the “Act”), provides a comprehensive framework regulating the rights and responsibilities of landlords and tenants under a lease for residential properties. Arizona courts have interpreted the Act to provide broad protections to tenants, as well as a wide array of damages which the tenant may recover when the landlord breaches the lease.
“Where there are no oxen, the manger is clean, but an abundant harvest comes through the strength of the ox.” Proverbs 14:4. Put another way, if you don’t do any work, you might have a clean stable, but you won’t have any crops. Applying this principal to business, if you are involved with enough real estate deals in this litigious culture, sooner or later, you are bound to run into a dispute. Common real estate disputes include failure to close, lack of proper disclosure, title issues, and other issues concerning the property’s condition. Resolving disputes through the courts is often costly and inefficient. Read More
Pigs get fat and hogs get slaughtered. That is why hard-money lenders should avoid seeking hyper aggressive interest rates. Although conventional mortgage interest rates remain historically low, interest rates on private loans, or “hard money” loans range anywhere from 5% to multiples of the principal amount. But if lenders overreach, they may end up forfeiting all interest. Indeed, the defenses of usury and unconscionability are alive and well. Read More
COURT RULES THAT JUDGMENTS DO NOT ATTACH AS LIENS TO HOMESTEAD PROPERTIES
Most civil cases never reach the trial stage. Instead, they are settled before trial. However, in those smaller percentage of cases that proceed all the way to trial, the Court will award to the prevailing party a judgment. These judgments are typically recorded with the local county recorder’s office so that the judgment can attach as a “judgment-lien” on any non-exempt property owned by the debtor. Read More
One of the greatest misconceptions of Arizona law is that usury is no longer a viable cause of action. In the 1980s, Arizona amended the usury laws to remove the interest rate ceiling. As a result, today’s usury laws essentially authorize lenders to contract for any interest rate. However, usury remains a viable defense against lenders who breach their own contracts by charging fees that aren’t allowed. Read More
Separation Agreements (A.R.S. § 25-317)
Sometimes married couples decide to separate, either in anticipation of divorce, giving one or both of the parties “some space,” or simply living separately for a while in hopes of sorting out their feelings and possibly reconciling. Under Arizona law, married couples can remain married but enter into a legal contract governing their financial matters – the handling of property, debt or even support. This is called a separation agreement and is controlled by A.R.S. § 25-317. The Court of Appeals recently ruled that per the statute, for these separation agreements to be enforceable, the terms cannot be unfair. Buckholtz v. Buckholtz, No. 1 CA-CV 17-0596 FC, filed January 15, 2019. Read More
Two things in life are certain: death and taxes. And if you don’t pay your taxes, there can be severe consequences. For example, if you fail to pay your property taxes, someone else can swoop in, pay the tax liability, and then ultimately claim title to your property.
Under Arizona law, a tax levied on real property is a lien on the assessed property. Read More
Most secured creditors have multiple options if the debtor defaults on payment. That is precisely why they require borrowers to pledge security (such as real estate) for the performance of the repayment of the debt – so that if the borrower defaults, the creditor is not limited to the borrower’s promise to repay the debt – in addition, the creditor can seek reimbursement from the sale of the secured asset.
Years ago, Justice Oliver Wendell Holmes, Jr. asked: “What is the justification for depriving a man of his rights, a pure evil as far as it goes, in consequence of the lapse of time?” Several reasons exist:  our laws aim to resolve just claims within a reasonable time;  if a claimant sits on her rights for too long, relevant evidence to disprove the claim may be lost or destroyed by the passage of time; and  litigation of a long-dormant claim by result in more cruelty than justice
When it comes to real estate transactions, more often than naught, the “devil” is in the details. The Arizona Court of Appeals, Division One, recently provided a roadmap to the rules concerning the specificity of an agreement required to obtain specific performance of an option to purchase real property.