How does one evict a tenant in Arizona if they have a lease/purchase instead of a straight lease? [closed]

Question

I've read there are differences to eviction based on the type of lease/purchase, so if more information is needed please comment.

• Tenant pays a lease payment each month that includes a monthly rent amount, an amount that is 1/12 the yearly taxes, and an amount that goes toward the eventual down payment
• Tenant is responsible for all repairs and maintenance to the home during their tenancy.
• While it is phrased as an "option" to purchase in a lease attachment, the purchase is required (they cannot choose not to purchase at any point or it will breach* the contract)
• The tenant is required to improve their credit within 2 years in order to be able to qualify for a mortgage to purchase the home. If they are unable to qualify for one, the contract will be breached.
• Tenant is required to go through only one credit improvement program. Said program is run by the landlord's partner.
• Tenant is required to provide parts of the eventual down payment prior to move-in, one year later, and a smaller amount every month for 18 months.

*For any breach, tenant loses all monies put down on the home, including any repairs or improvements made during their tenancy.

If the tenant is suddenly unable to pay their monthly lease payment, how would an eviction be accomplished? Is a normal 5 day pay or quit, then eviction notice, sufficient?

Answer 1

Under ARS 33-1308, which is part of the Arizona Residential Landlord and Tenant Act, the usual landlord/tenant requirements and protections do not apply to "Occupancy under a contract of sale of a dwelling unit or the property of which it is a part, if the occupant is the purchaser or a person who succeeds to his interest", which may apply to this situation. The contract first must be cancelled. This assumes that you have a single lease-purchase contract rather than a lease contract and a purchase contract (apparently what AZ lawyers recommend). This also assumes that you have a lease-purchase agreement and not a lease-option agreement.

Under a landlord-tenant relationship (see here), "the ability to evict persons from real property is tied to the requirement that the parties have a landlord/tenant relationship"; however

[w]hen the parties are under a landlord/tenant relationship the parties are bound the Arizona Residential Landlord Tenant Act (“ARLTA”). While the ARLTA allows the landlord of a single family residence to shift much of the maintenance responsibilities to the tenant, repairs necessary to comply with health and safety issues generally remain the Landlord’s responsibility. (A.R.S. §33-1324(C))

So the requirement for the tenant to repair may contradict the presumption of there being a landlord-tenancy relationship.

These folks indicate that "if the tenant fails to pay the rental payments as required, the landlord/seller may institute a special entry and detainer action pursuant to A.R.S. §33-1368(A) to evict the tenant and terminate the purchase contract as a result of the breach". They also advise, with respect to ARS 33-1308, that "this provision should be construed to exclude occupancy under an “agreement for sale” (also known as contract for deed, land contract, or installment contract), not a lease/purchase". The advice here is that a lease-purchase is two contracts with a "cross-default provision" where breach of one results in a breach of the other; but also "[b]oth the Lease Purchase and Lease Option create landlord-tenant relationships. Therefore, if the tenant defaults, the landlord-seller would evict the tenant-buyer or tenant-option holder like a normal tenant".

On the face of it, the kind of situation that you describe is sufficiently complex that you would need specific legal advice (which LSE can't provide) and an attorney reading the entire agreement or agreements.