lease for Arizona group home
I have a potential tenant for a residential home in Mesa AZ who wants to use the rental property as a group home. I spoke with our landlord/tenant attorney, and he said it would need to be a commercial lease, since the tenant is a business. The attorney doesn't have a standard commercial lease or group home lease. They would have to draft the lease from scratch for that scenario, which would be expensive.
Does anyone know an attorney in AZ that has a standard lease for renting to a group home? Or does anyone have a template you could share?
I drafted my own lease for this exact situation. I'll see if I can find it.
Sounds great @Jake Winters I'll send you my email.
@Nate T. I can't help your lease but FYI, insurance could be a little troublesome. I own a home that is rented by an Adult Family Group Home covered by a residential lease in my state due to our regulations. Most insurers viewed it as a nursing home quoting rates of $10k annually for a home valued at $129k. It was difficult to find an insurer to finally provide full coverage at under $2k, about double normal rates for my area. They are good extremely long term tenants. Good luck.
Worth every cent of your attorneys fees!! Especially with a little bit of a unique/objectionable tenant use, I would never go at it on your own. There is no substitute for good legal assistance when there is a lot of potential liability on the line. I have witnessed too many horror stories that end in significantly more cost than the initial legal fees would have. A standard residential lease, fine, but I wouldn't suggest it for almost any commercial lease, and definitely not for this type.
Also, if you haven't already, make sure zoning laws allow for that use, and that there is no code provision that prohibits a certain number of unrelated individuals to live in a single residence. Depending on the type of "group home" (drug/alcohol rehab, handicapped, mental illness, elderly, etc.) you have other laws to make sure you comply with, and great point by David D Painter re insurance.
Hi Nate and Jake. I’m also looking for information on these types of leases. Any advice on where to start?
I ended up hiring a local attorney.
Nate, whatever happened?
@Nate Do you mind sharing the details of the attorney you used for the lease preparation?
#3 Managing Your Property Contributor
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#3 Managing Your Property Contributor
- Investor
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@Nate T. How did you make out with this group home?
In my town, "group home" has a very specific definition. One criteria is 6 or more individuals. I rent single family homes to companies that take care of special needs people. 5 unrelated individuals is the limit for a rental property but people still refer to them as group homes. Insurance is just like it would be for any other rental property. Insert disclaimer here.....
The group home has worked out well. They've been a good long term tenant. They were paying above market rent, but now with the crazy rent increases in the Phoenix area, they're actually paying a little below market. But that's fine.
Regarding the insurance, we still have a regular landlord policy. We need to get that updated, just haven't gotten around to it. If anyone knows an agent that offers a good policy for a property being rented to a group home in Arizona, please let me know.
#1 Insurance Contributor
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- Norwalk, CT
Nate,
I would suggest finding an independent agent that writes Commercial Insurance. One that writes a lot of non-profit or social service may have markets that can write your coverage. If you can not find coverage in the standard market, there are excess (specialty) markets that write Group Homes. If your agent can not find coverage PM me and I will let you know the excess markets I know of that write it.
There are things that you can do as part of your lease requirements to lessen your liability or shift the coverage to the Tenant. Things like:
1. Require that they name you as an additional insured on their poliyc
2. Require that their policy be primary and Non-contributory
3. Require that their carrier waive subrogation against you
4. Require 30 day notice of cancellation of any policy
A well written hold harmless clause in the contract can also help you avoid liability.
I would also request copy of their coverage for General Liabilty, Professional Liability, Workers Comp. and Auto Liability.
I am also trying to lease to a group home in the Phoenix area and I am running into trouble with drafting a commercial lease. Do you have any recommendations for a legal attorney in the area? Any help would be greatly appreciated.
Hi @Daniel Asa, did you finalize the lease? I'm in a similar situation and need a good attorney contact
I'm in a similar situation and need a good attorney contact please
@Nate T. Hi Nate, I currently have a client that wants to lease a home to place a group home. Can you tell me how much you would charge if you had a property to rent? I'm trying to help her pull some numbers together. Also, please let me know if you have a rental property available that you would be willing to rent for this purpose! Thank you for your time.
Quote from @Marla Conrad:
@Nate T. Hi Nate, I currently have a client that wants to lease a home to place a group home. Can you tell me how much you would charge if you had a property to rent? I'm trying to help her pull some numbers together. Also, please let me know if you have a rental property available that you would be willing to rent for this purpose! Thank you for your time.
Hi Marla. It seems like the rate is typically about $1000 more than a regular long term rental, for a similar property. We do not have any rentals available at the moment.
Quote from @Nate T.:
Quote from @Marla Conrad:
@Nate T. Hi Nate, I currently have a client that wants to lease a home to place a group home. Can you tell me how much you would charge if you had a property to rent? I'm trying to help her pull some numbers together. Also, please let me know if you have a rental property available that you would be willing to rent for this purpose! Thank you for your time.
Hi Marla. It seems like the rate is typically about $1000 more than a regular long term rental, for a similar property. We do not have any rentals available at the moment.
Thank you for your reply, Nate! I appreciate the information and the time you took to respond. Best wishes.
I have a Home Available Now to lease to Group home.
Quote from @Marla Conrad:I have a Home Available Now in quite neighbourhood to lease to Group home.
@Nate T. Hi Nate, I currently have a client that wants to lease a home to place a group home. Can you tell me how much you would charge if you had a property to rent? I'm trying to help her pull some numbers together. Also, please let me know if you have a rental property available that you would be willing to rent for this purpose! Thank you for your time
