Read further to learn more about the rules & regulations surrounding subletting in Arizona, whether for residential or commercial tenancy.
What is a Sublease Agreement?
A sublease agreement is used when a tenant who holds a lease with a landlord wants to rent the property to a third party. In simple terms, a sublease agreement allows a current tenant to find another person to pay the weekly or monthly rent. Generally, a sublease outlines similar rights and responsibilities as the original lease agreement. When discussing a sublease agreement or creating a legal sublease form, the original tenant is referred to as the sublessor, while the third party is referred to as the sublessee.
To be able to grant a sublease, the original tenant (“lessee”) needs to have written permission from the landlord. If this permission does not exist in the original rental agreement signed with the landlord, then a lessee who wants to sublease a rental unit, or a part of it, needs to request permission in writing from the landlord.
Roommates Need to be Authorized Residents
Many people like to share a rental space for financial reasons. It is important that the rental agreement allows such roommates and that the roommates sign a sublease agreement when renting only a portion of the rental unit, such as a bedroom.
Tenants need to be careful not to violate the guest provisions in a rental agreement and make sure any sublease tenants are approved by the landlord as authorized residents of the rental unit. Otherwise, a tenant may be subject to eviction, if violating the terms and conditions of the rental agreement.
Landlords who wish to absolutely prohibit any subleasing of a rental unit should state those terms and conditions in the rental agreement.
Shared Responsibility between Lessee and Sublessee
Even if the entire rental unit is subject to a sublease, the ultimate responsibility for the performance of the tenant falls back on the original lessee. If the sublessee damages the rental unit or fails to pay the rent, the original lessee is held responsible. It is in the landlord’s interest to have the responsibility shared by the original lessee and the sublessee
The original lessee of a rental unit who wants to sublease it to another person essentially becomes a landlord (sublessor) to the sublessee and, at the same time, remains a lessee under the rental agreement. It is in the interests of the original lessee to make any sublessee responsible for all the terms and conditions found in the original lease.
The easiest way to accomplish this is to make the original lease a part of the sublease agreement by having a written reference to the exact rental agreement in the sublease contract. Attach a copy of the original lease attached to the sublease contract. To identify the original rental contract in the sublease agreement use language such as “that certain rental agreement signed by (name the parties) on the date (identify the contract by the date signed).”
Due Diligence on Sublessee
It is important for the lessee that wishes to sublease a portion or all of a rental unit to another person that they conduct proper due diligence on that person. They should act as if they are a landlord and require a prospective sublessee to fill out a full rental application. The application should ask for written permission to conduct a background examination and run a credit history check. It is allowed to charge a prospective renter a fee for this background check.
Under federal law, discrimination is not allowed on the basis of race, heritage, religion, gender, marital status (including having children), or disability. An exception is made under Arizona laws found in Section AZ 41-11491.04 for rental properties that qualify as age-restricted facilities.
Arizona state law found in Section 33-1321(A), limits a security deposit to a maximum of one and one-half month’s rent. The Arizona state law found in Section 33-1321(D), requires a full refund of the security deposit, or the balance left after legitimate deductions, within 14 business days after a tenant vacates the rental unit. Business days do not include Saturdays, Sundays, and legal holidays. Any deposit that is non-refundable needs to be clearly stated in the rental agreement; otherwise, all deposits are considered fully refundable.
Any sublease agreement must follow Arizona laws found in the Arizona Residential Landlord and Tenant Act, which includes the requirement for disclosure about lead-paint hazards if the property was built before the 1970s. This Act also has the notice requirements and procedures required for evictions.
Be sure to check that the original lease follows Arizona law when making a sub-lease that includes the terms and conditions of the original lease. Do not repeat any legal mistakes that are in the original lease, such as prohibited contract terms under state law. Before making a sublease, correct these mistakes with the landlord in writing.
How to Create a Sublease Agreement in Arizona
Due to the complex nature of a sublease agreement and the additional responsibility that a sublessor must assume, it is critical to use a sublease agreement form that is detailed and state-specific. This guide contains step-by-step instructions for creating a basic sublease agreement template that is legally compliant in the state of Arizona.
Identify the Parties to the Agreement
The first paragraph of the sublease states the parties who will sign. It gives their full legal names and addresses. Define who is the original lessee in the original lease as the “Sublessor” in the sublease. This makes the original lessee change roles to be like a landlord in the sublease agreement. Identify the person who will be the new tenant as the “Sublessee.”
Identify the Rental Property Subject to the Sublease
In this section write the address of the rental unit. If the sublease is only for a portion of the rental unit, describe the portion in terms that can identify it, such as the master bedroom or the bedroom on the northeast side of the rental unit.
Indicate the Lease Term and the Notice Days
A sublease can be for a fixed term. If this is the case, indicate the start and end dates of the term. Alternatively, a sublease can be on a month-to-month basis or on a weekly basis. Indicate the advance days required for a notice to vacate. For weekly agreements, Arizona law requires 10 calendar days notice (15 days if the U.S. mail is used to deliver the notice). For a monthly or longer agreement, Arizona law requires 30 calendar days notice (35 days if the U.S. mail is used to deliver the notice).
Indicate the utilities to be paid by the sublessee. If an allocation of the utility bills is made to determine the amount to be paid by the sublessee, explain in detail how the allocation will be made such as by square footage, a percentage of the bill, or another method.
Indicate the amount of security deposit and if any other deposit, or portion thereof, is not refundable. Under Arizona law, a security deposit is limited to a maximum of one and one-half month’s rent.
Refer to the original lease and include a copy of it as an attachment. State any additional terms and conditions that apply to a particular sublease.
Sign and Date
All the parties sign and date the agreement. Have an adult person watch the signing and then sign as a witness. If any party is a minor, then their parent or guardian must sign for them.