Leasing Out a House You Inherited

Arizona has no gentler set of rules for a landlord who did not intend to become one. Once a residential tenancy covered by the Act is in place, the obligations run the same way whether the house was inherited or bought as an investment: the ceiling on what you may hold as security, the written disclosures owed at move-in, the notice before you may come in, and the standard the property itself has to meet.

Inheriting a house does not usually come with a plan for it. Selling takes time and often feeling. Leaving it empty costs money and invites trouble. So a great many people end up leasing out a property they never chose to own, frequently while the estate is still being sorted out. This page covers the obligations an inherited property is most likely to meet.

This page is written for the landlord. If you are the tenant, the guide for tenants covers the same ground from your side.

First, Make Sure You Can Sign

Before anything else, be sure the person acting as landlord is entitled to act. An executor, a personal representative, a trustee, an heir and a devisee do not all hold the same authority, and they do not all hold it at the same moment. Where title is still in probate, the lawyer handling the estate is the person who can say who may enter into a rental agreement.

That is estate law rather than landlord and tenant law, and it is outside what this site covers. It is first on the page because it comes first in time, and because a lease signed by somebody without authority is a problem no amount of correct landlord paperwork will fix.

If a Tenant Came With the House

Start here, because it changes what the rest of this page means to you.

Where the property already had a tenant, do not assume you are starting over. An existing rental agreement can continue, and Arizona binds parts of the Act on a successor directly: the disclosure duties are enforceable against any successor landlord, owner or manager.

So two things need doing quickly. Your tenant has to be told in writing who manages the property now, and where legal notices reach you. Whatever was current under the previous owner is not current any more. And you need the existing agreement itself, because its term, its rent and anything it says about deposits are now yours to work with.

The disclosure point has teeth, and they are unusual ones. Whoever fails those duties is treated by the Act as an agent of every person who is a landlord — for receiving legal papers, and for carrying out the landlord’s obligations. An accidental landlord managing a house informally while the estate is settled is exactly the person that provision can land on. Required disclosures sets it out.

Find the Deposit Before You Need It

The security deposit is the record to locate early. Find out how much was collected, what it was called, and whether any part of it was designated nonrefundable in writing.

This is not tidiness. The deposit section binds whoever holds the landlord’s interest on the day the tenancy ends, and by then that is you. You owe the accounting and any refund at the end of the tenancy whether or not the money ever reached you. So the deposit is not a loose end for the estate to tidy up. It is an asset to be located and passed along in the distribution, and if it cannot be found, the shortfall is yours to cover.

The same applies to anything the previous owner took and never put in writing as nonrefundable. Security deposits covers what that means.

What an Existing Term Does to Your Plans

An inherited fixed term has a date on it, and that date is not moved by the house changing hands. If your plan is to sell once the estate is settled, that constraint is worth understanding early rather than after the property is listed.

How an existing lease affects a later sale — whether and on what terms a buyer takes the property subject to it — is a question of property law rather than of the Landlord and Tenant Act, and the Act does not answer it. Put it to the lawyer handling the estate, at the same time as the question about authority to lease. It is the sort of thing better settled before a buyer asks.

The Age of the House Is the First Question

An inherited property is usually an older one, and age triggers a disclosure that newer properties escape.

If the house was built before 1978, federal law requires lead-based paint disclosure to the tenant along with the approved pamphlet. That obligation is federal rather than part of Arizona’s Act, and it applies whatever the state requires.

It is an easy one to miss on an older property, and the reason is human rather than legal. A landlord who has known the house since childhood does not think of it as a hazard. The disclosure is not a statement that your family home is dangerous. It is a statement about when it was built.

Age also tends to mean systems near the end of their working life, which runs into a duty an inheriting landlord is rarely braced for. A landlord in Arizona owes a continuing duty to keep the place fit and habitable, to meet the building codes bearing on health and safety, and to keep the systems and appliances they supply in safe working order. That duty begins with the tenancy and does not pause. An inherited house is worth walking through with it in mind before anybody moves in, rather than after the first call. Repairs and habitability lists what has to be kept working, and what counts as affecting health and safety.

One Rule That May Not Apply to You

Arizona’s bedbug obligations — providing educational materials, and not knowingly leasing a unit you know to be infested — exclude the landlord and tenant of a single family residence altogether.

The exclusion is worth stating plainly, because the rest of this site keeps adding duties and this is one a lot of readers can cross off. It is also worth knowing that Arizona defines a single family residence more broadly than the phrase sounds. A structure maintained and used as a single dwelling unit qualifies, and so does a unit that shares a wall with another, so long as it has direct access to a street and shares no heating, hot water or other essential facility or service. So half of an inherited duplex may or may not fall inside the exclusion, depending on how the building was put together.

Register the Property With the County Assessor

A house that has always been somebody’s home has almost certainly never been on the county’s rental register, and Arizona expects it to be. Owner contact details, the parcel number and the year of construction go to the assessor for the county the house is in. An out-of-state heir records an Arizona agent to accept legal service as well.

This one earns its place near the top of an inherited-property list for two reasons. Occupancy is not supposed to begin while the filing is outstanding. And the civil penalty a city or town may charge is at its heaviest for property just acquired — which describes every inherited house. A short cure period ends it, and leasing out a home for the first time sets out the figures and the deadlines.

Record the Condition Before Anybody Moves In

Three things are due at move-in: the signed lease, a form on which your tenant can specify damage already present, and written notice that they may attend the inspection at the end.

The form matters differently here than on a property somebody bought to lease, because an inherited house arrives with decades of wear belonging to nobody currently involved. A record made at the time gives both sides something to work from when the question later is whether the tenant marked the wall or the wall was already marked. Photographs and video are worth keeping with it. None of this is the only evidence that can settle such a question, but it is the evidence that exists before there is an argument.

Money You Take Before the Tenancy Starts

There is a ceiling on what a landlord may hold as security, it counts prepaid rent, and it applies to the sum rather than to the pieces. A separate rule governs anything meant to be kept: the purpose has to be written down, and whatever is not designated as nonrefundable is refundable. How the two fit together, and the question the section leaves open, are on security deposits.

Decide the Term Deliberately

If you may want to sell once the estate is settled, the length of the tenancy is not a detail.

A fixed twelve-month term gives your tenant certainty and gives you a date. A month-to-month arrangement keeps your options open, though it can be ended by your tenant on the same short notice it gives you. Write nothing and Arizona chooses: no fixed term means month to month. The trade-offs are on month-to-month or fixed term.

Selling with a tenant in place is possible. Showing the property to a prospective purchaser is one of the purposes the Act entitles a landlord to enter for, on the usual notice. Working out showing times with your tenant tends to make the process easier for both of you. Landlord entry covers how that works and where it goes wrong.

One Thing That Is Not a Legal Rule

Tell the insurer before your tenant moves in. A policy written for a house somebody lived in, or for one standing empty, may not be the right policy once it is rented. That is not an Arizona landlord and tenant question and this page is not the place for insurance advice, but it is the practical item most often left until after the keys have changed hands.

Two More Questions for Somebody Else

The authority question at the top of this page is the first of them, and it is worth repeating that it goes to the lawyer handling the estate. Who holds title, and whether probate is finished, both come into it.

The tax treatment of an inherited property is a matter for an accountant. Inherited property has its own basis rules, and leasing it out has consequences of its own. Neither belongs to the body of law this page is about.

Where These Rules Come From

Arizona’s laws are collected in a set called the Arizona Revised Statutes, usually shortened to A.R.S. The number that follows points to one section of it.

You do not need these numbers to use this page. They are here so that you, or a lawyer you hire, can check the exact wording. Each one links to the official text on the Arizona Legislature’s website, which opens in a new tab.

• A.R.S. 33-1322 is the disclosure section. Subsection C is the one to read if a tenant came with the house — it keeps the duty running and binds it on whoever owns the property now, which is you. Subsection D is the agency consequence for failing it.
• 42 U.S.C. 4852d is the federal lead-based paint rule, and the reason the year the house was built decides whether you have an extra duty. The pamphlet comes from here too.
• A.R.S. 33-1319 is bedbug control. Subsection D is the exclusion for the landlord and tenant of a single family residence, and it is complete rather than partial.
• A.R.S. 33-1310 is the definitions. Paragraph 16 is the one that decides whether the bedbug exclusion reaches your property, and it is wider than the phrase single family residence suggests.
• A.R.S. 33-1324 is the duty to maintain fit premises, which is the one an older house tests. Subsection A is the list.
• A.R.S. 33-1321 is security deposits: the ceiling, the nonrefundable-in-writing rule, and subsection C, which is the move-in paperwork. Subsection H is the one that matters most on this page — whoever holds the landlord’s interest when the tenancy ends is bound by the section.
• A.R.S. 33-1902 sits in a different article from everything else on this list, and covers the county rental register. Subsection A is what gets filed and how quickly changes follow. B is the Arizona agent an out-of-state owner records. C bars occupancy while the filing is outstanding. E is the penalty aimed at property recently acquired.
• A.R.S. 33-1343 is access, and subsection A includes showing the property to prospective purchasers among the permitted purposes.