Commercial Tenants Have Little Statutory Protection

Question: We are tenants in a Peoria office building. During a week of 120-degree heat last July, the air conditioning system for the entire office building “crashed,” and our landlord said that it would be at least two weeks to get the necessary parts to fix the air conditioning system. Because we were in the middle of a major project, most of us couldn’t work from home. We were, however, able to get office space in the office building next door for two weeks at a cost of $8,000. When we requested reimbursement of this $8,000 from our landlord, our landlord refused because our lease provided that the landlord only had to make “reasonable efforts” to repair the air conditioning system. Doesn’t Arizona law give us some protection if we can’t conduct our business for two weeks in July record heat because there is no air conditioning?

Answer: Probably not. Commercial tenants have few protections under Arizona law. On the other hand, residential tenants have numerous protections under the Uniform Landlord-Tenant Act, A.R.S. §§ 33-1301 – 33-1381. For example, if an apartment is not habitable for two weeks because of no air conditioning in July, the tenant can get substitute housing, e.g., a room at a Holiday Inn, and a tenant can basically be reimbursed by the landlord for the Holiday Inn room at up to 125% of the daily apartment rent. A.R.S.  § 33-1364. For example, if the monthly apartment rent is $3,000, i.e., daily apartment rent is then $100. Thus, the tenant would not have to pay the daily $100 apartment rent, and the tenant would also get $25 per day from the landlord to apply to the cost of the Holiday Inn room.

Note: Similarly, even if there is nothing in a residential lease about eviction for nonpayment of rent, the tenant generally has a 5-day grace period after written notice by the landlord of nonpayment, before eviction proceedings, and can never be “locked out.” A.R.S. § 33-1368. On the other hand, if there is no language in a commercial lease to protect a commercial tenant, a commercial tenant under the law can be “locked out” immediately on the first minute that the rent is delinquent.