If you are renting out a residential or commercial property in Arizona, you know that lease agreements play a crucial role in defining the relationship between you and your tenants. This legally binding contract means that while you retain ownership of the property, your tenant has the right to use it – as long as they adhere to the terms and conditions outlined in the agreement.
Aside from specifying key information such as how long they can use the property and the amount of rent, it also details contingencies that the tenant must meet for the lease to stay in effect. These conditions ensure that they keep the property in good condition, protecting its value and your investment.
How do contingencies protect your property?
Contingencies in a lease agreement can require tenants to:
- Perform any necessary maintenance: You can prevent deterioration and reduce the risk of costly repairs by requiring your tenants to maintain the property. This can include having them shoulder routine repairs and upkeep, such as HVAC servicing.
- Carry adequate insurance: You can require your tenants to obtain renter’s insurance that covers liability for personal injury and property damage. This can protect you from any legal or financial issues that can come from accidents or negligence on the tenant’s part.
- Limit or prohibit subletting: When you lease your property to another person or business, you are basically entrusting them with your hard-earned investment. Subletting runs the risk of dealing with a subtenant that may not follow your rules or meet your standards for residency.
Contingencies serve as your legal and financial safety net. If your tenants fail to meet these conditions, you may have grounds to terminate or renegotiate the lease. Your lease agreement can also dictate financial penalties or fees. This could include late fees, increased rent or other monetary consequences.
If your tenant’s failure to meet a contingency causes significant harm to you or your property, you may even be able to pursue legal action. However, it depends on the severity of the breach and its impact on your property. It’s important to seek professional legal advice if you are facing issues such as substantial property damage, repeated non-compliance with lease terms or serious legal liabilities arising from the tenant’s actions.