Commercial Lease Laws in Arizona
Don't sign a lease in Arizona until you understand the local statutes, tax implications, and common landlord traps.
Key Statutes & Considerations
AZ charges a Transaction Privilege Tax (TPT) on commercial rental income. Landlords virtually always pass this ~2-3% cost to tenants.
In AZ heat, HVAC units fail often. Cap your capital liability for replacement to avoid buying a new AC unit for the landlord.
Common Red Flags in Arizona
Commercial real estate in Arizona typically favors the landlord in standard lease drafts. Whether you are in Phoenix or elsewhere, you need to watch out for:
- Uncapped NNN Charges: Variable costs like property taxes and insurance can skyrocket.
- Broad Indemnification: Clauses that require you to pay for the landlord's negligence.
- Relocation Clauses: Rights for the landlord to move your business to a worse location.
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Frequently Asked Questions
Is a Triple Net (NNN) lease legal in Arizona?
Yes, NNN leases are the industry standard for commercial retail and office space in Arizona. They shift the burden of property taxes, insurance, and maintenance to the tenant.
Can I negotiate my commercial lease in Arizona?
Absolutely. Unlike residential leases, commercial leases are presumed to be negotiated between equal parties. Never sign the first draft.