Effective April 6, 2020, Governor Ducey issued Executive Order 2020-21 temporarily suspending commercial tenant evictions, including lock out, notice to vacate, or any other attempt to inhibit the operations of a business associated with inability to pay rent caused by COVID-19. The Executive Order expires on May 31, 2020.
The Executive Order defines a commercial tenant as any business type eligible for the federal Paycheck Protection Program; generally with fewer than 500 employees, in the following categories: sole proprietor; partnership; C-corporation; S-corporation; limited liability company; independent contractor; self-employed individual; 501(c)(3) and 501(c)(19) organizations; and tribal businesses.
The Executive Order also includes the following:
- Commercial landlords shall consider deferring or adjusting rent payments for commercial tenants that are unable to pay rent due to financial hardship.
- Encourages commercial landlords to work with tenants in waiving late fees, penalties, and interest associated with late rent and develop rent repayment plans.
- Commercial tenants are directed to notify the landlord or property owner in writing if seeking a delay in eviction, lock out, other inhibition of operations, or requests a reduction or deferral of rent payments.
- Commercial tenants shall use a portion of eligible assistance received from financial assistance from public programs to any past or currently due rents.
- Landlords may not require commercial tenants apply certain percentages or amounts of financial assistance to commercial rent.
- No provision of the Executive Order shall be construed as relieving any individual or business of the obligation of paying rent or complying with any other obligation that a business may have under a lease or rental agreement.
The entire Executive Order 2020-21, Prohibiting Small Business Evictions, can be found here.