questions & answers

Question: We have a tenant who is operating a commercial business in a residential R5 area on our property. We do have liability insurance. It started out as a hobby, but it has gotten beyond that. Do we have any liability in this situation? What are our legal responsibilities? The property is actually in unincorporated Maricopa County.

Answer: Under the Arizona Residential Landlord and Tenant Act (A.R.S. Title 33 Chapter 10), unless the landlord and the tenant have agreed otherwise, a residential tenant must occupy a rented dwelling as a dwelling (A.R.S. 33-1344). If no agreement exists between the landlord and the tenant permitting the tenant to operate a commercial enterprise on the premises, then the residential tenant who uses the rented dwelling unit in order to operate a commercial enterprise there very likely will be in violation of the tenant’s responsibilities under Arizona law. As to your specific question regarding what your liability insurance may cover, you are strongly advised to describe your tenant’s commercial and other activities in detail to your insurance company and possibly also contact a premises liability attorney in order to determine whether and how you as the landlord may be liable for any problems that result from your tenant’s operation of a commercial enterprise on your property.