SUPER BOWL SEASON ALREADY

By
Services for Real Estate Pros with Canyon Ridge Realty LLC SA040820000

SUPER RENTALS watch your step!

 

Look forward in less than 60 days or so the valley of the sun will be considered the entertainment capital of the free world. Coming in January and February 2015 the Phoenix metro area will host not only the Fiesta Bowl 12/31/14 & we don’t even know the teams yet and it’s gonna be big. The very cool and well attended Barrett Jackson Collector Car Auction… zoom zoom (1/10/15 - 01/18/15), The NFL Pro Bowl (1/25/15) ho hum ….big draw? We’ll see soon, add in the mix The Waste Management Phoenix Open (1/26/15 – 2/1/15) one of the largest attended golf events and greatest show on turf. Top that off with and the granddaddy of them all the Super Bowl! All this action within a 45 day time frame wow is traffic going to be congested. Short-term rentals are already in high demand just for the awesome weather yet alone all the extra activities and many people have rented their homes, second homes and investment properties for January and February of next year with hopes of big time profits.

                                                                                                                       

 In the Real Estate world short-term rentals AKA “transient lodging” or “vacation rentals by owner, (VRBO) some can be outlawed in some neighborhoods. They can only be restricted in three different ways: (1) county zoning ordinances; (2) city zoning ordinances; or (3) deed restrictions (CC&Rs). This is great news for the investors and owners who want to run some calculated risk for potentially large rewards.  Short-term rentals or transient lodging are authorized in many of neighborhoods in Valley.

Many short-term rentals are legal in Maricopa County.  Although transient lodging rentals are lawful in most cities within Maricopa County please check with the local city government before you commit to anything.  Be sure your property is not located in a planned community that prohibits such vacation rentals.

 

You may want to know a little about the Arizona Residential Landlord Tenant Act (LLTA) which provides tenants with significant rights and protections. One of the most important is LLTA requires that if the tenant breaches the lease for non-payment or any other violations, the landlord must first provide the tenant with written notice before any breach may occur and this may trigger one of the most important of all, if the LLTA applies, then the landlord must file a judicial eviction action to remove the tenant in the event of holdover or non-payment. This action could take a considerable amount of time and money.  Another huge item is the LLTA limits the ability to collect hefty security deposits because of the limit in place of 1.5 times the monthly rent amount and on top of that the landlord can’t require or collect prepayment of rents or deposits.

 

Think twice before considering renting, owners who rent their properties for abbreviated terms (less than 30 days) should avoid the LLTA because “transient lodging” is exempted from the LLTA. According to the laws A.R.S. 42-5070(F), “transient” means any person, who either at the person’s own expense or at the expense of another, obtains lodging space or the use of lodging space on a daily or weekly basis, or any other basis for less than thirty consecutive days.”

As long as the rental term is less than 30 days, the rental agreement should be governed by Arizona’s Inn Keeper statutes A.R.S. 33-301, according to the Inn Keeper statutes, the landlord may non-judicially re-enter and take possession in the event of a hold over or breach of the rental agreement.

Property owners seeking to avoid the LLTA should probably stay away from using the AAR Residential Rental Agreement.  Instead, owners should use a customized, short-term, daily or weekly rental agreement that expressly provides in the agreement that is governed by the Inn Keeper statutes and not the LLTA. This short-term rental agreement should also provide that the rental term should never over 29 days.  This rental agreement should also provide a clause that will allow the owner and give him the right to perform a non-judicial lockout if the renter breaches the agreement or holds over. Last but not least, the rental agreement should advise the renters that they are to comply with all local laws and ordinances, including any HOA rules, regulations and or their CC&Rs.

 

Many savvy people will reap some large financial gains and others may end up in the middle of a nightmare. Please do your homework first.

 

Cheers.

 

Gordon 

 

 

 

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