Owning or leasing commercial property requires maintaining a civil working relationship with the landlord or tenant, depending on your role. Though both parties have unique obligations defined by Arizona commercial real estate law and by their lease agreements, disputes do arise due to misunderstandings, negligence or refusal to abide by the terms of the contract. An experienced real estate attorney can help you navigate these conflicts while keeping your rights and your best interests in mind.
These are some of the most common Arizona commercial tenancy and business disputes and how to handle them.
Rent disputes are one of the most common issues between commercial landlords and tenants. Lease agreements will detail the amount of rent to be paid every month as well as the timeframe in which the tenant has to pay it. However, landlords who wish to keep tenants long term should communicate with them if either party anticipates that the tenant will have difficulty paying rent in the near future. Especially during these unprecedented times, simple resolution may be what is needed to avoid a commercial lockout.
Duty of Repair
Duty of repair refers to the responsibility of commercial landlords and/or tenants to maintain and repair parts of the premises as needed. Commercial properties vary in terms of their physical condition, with some properties needing more maintenance than others. If business owners are not careful, they may get caught in an expensive trap by renting a place that needs significant repairs. Tenants especially should carefully negotiate the terms of their lease so high-cost repairs like HVAC replacement are not theirs alone to handle.
Early Lease Termination
In the commercial lease agreement, you will find language evidencing the start and end of the lease. If either party is negligent in their duties or if the tenant’s business is underperforming, there may be grounds to terminate the lease early. Arizona commercial law allows property owners to add early termination clauses, also called break clauses to lease agreements. These provisions give tenants the ability to exit before the lease expires without owing payment for the remainder of the lease.
Subleasing a Property
Most Arizona commercial leases allow tenants to sublease their spaces unless expressly prohibited by the lease. Disputes may arise if there are no terms in the agreement which address subleasing or if the landlord does not approve of the subletting tenant. Most landlords prefer to avoid vacancy, however, so these issues are less common. The simplest way to avoid subleasing issues altogether is to clearly define the terms in the lease agreement.
Resolving Arizona Commercial Lease Disputes
It can be complicated to reach a resolution that suits both commercial landlords and their tenants. The answer is typically found at the intersection of contract and real estate law, which is why parties should involve an experienced real estate attorney when disputes arise. Attorneys use the lease agreement as the reference document and address the specific issue in question.
Landlords and tenants are often advised to try mediation prior to ligation because mediation is faster and more cost friendly. Mediation focuses on coming to a mutually acceptable resolution between the parties and keeping the matter out of court. This lets parties navigate the dispute without involving lenders, investors and appraisers.
Find an Experienced Arizona Commercial Real Estate Attorney
MacQueen & Gottlieb have significant experience with commercial real estate disputes between property owners and the businesses that occupy their spaces. Whether you are a landlord or tenant, our attorneys can help you pursue win-win solutions wherever possible and take legal action where necessary. Contact us today at (602) 726-2229 to schedule an initial consultation or make an appointment online.