Commercial Tenant Not Paying Rent

   Question: My family owns a small shopping center in Apache Junction. Two years ago, we verbally entered into a month-to-month lease with a beauty salon. Although we intended to have a written lease agreement, we never did. Until this month the beauty salon always paid the rent on time, but this month the owners are more than two weeks late. They say they will get us this month’s rent by the end of this month. We would like to rent the space to another tenant for higher rent. What can we do?

   Answer: You can either file an eviction action in court or, inasmuch as the rent is more than five days late, you can “lock out” the beauty salon. (Arizona Revised Statutes Section 33-361.) If you choose to lock out the beauty salon, you must do so at a time when there will not be a breach of the peace, generally after working hours when there is no one in the leased space.

   Commercial tenants such as beauty salons, unlike residential tenants, have little or no protection under Arizona law. The public policy is that commercial tenants and landlords are capable of taking care of themselves can protect themselves by negotiating a written lease agreement with the assistance of attorneys. In fact, most commercial lease agreements have a “cure” period, or 10 days written notice, before a landlord can “lock out” the tenant or file an eviction action against the tenant in court for non-payment of rent.

 If you would like assistance regarding commercial or residential transactions, potential litigation, HOA issues, estate planning or other legal matters, please call our office at 602.957.9810 and arrange for an initial consultation with one of our real estate attorneys.

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