Arizona Governor Doug Ducey has issued Executive Order 2020-21, prohibiting small business evictions from commercial properties for tenants who are suffering from the effects of the current COVID-19 pandemic starting on March 11, 2020, when a Public Health State of Emergency was declared. The order is in effect until May 31, 2020. The order protects small businesses as defined by those eligible for the Paycheck Protection Program (PPP) outlined in the CARES act stimulus package.  Those are generally small business with less than 500 employees, nonprofit organizations, self-employed individuals, and independent contractors.

“Arizona is grateful to the many landlords who are already working as good partners with small businesses during these challenging times,” said Governor Ducey. “This order helps ensure no small business or nonprofit will face eviction due to COVID-19 and that landlords and small businesses work in partnership to make sure we get through this emergency together. There’s more work to do to ensure Arizona’s small businesses can make it through this public health emergency. As we continue to prioritize public health, we will continue to do everything in our power to support those in our small business and nonprofit communities serving us.” Read more here.

The order advises that lenders consider working with commercial tenants to help provide options for deferring rent or mortgage payments and waiving late fees or penalties.  Tenants that wish to delay eviction action or reduction or deferral of rent payments must submit notification to landlords in writing as soon as possible.  Any tenant who receives aid through the PPP needs to apply a percentage of that assistance to any past or current rents due, but landlords cannot specify to tenants what that amount should be.

The order is clear in stating that tenants are not absolved from any money due.  While attempts at evictions, lock outs and notices to vacate are suspended between March 11 and May 31, the order uses less definite terms in describing the ways that lenders and landlords interact with their tenants regarding those rent payments.  Words like “encouraged,” and “shall consider” give some leeway to commercial landlords and lenders in what they waive or adjust.  The order allows judges to make a determination on eviction action based on what is the best interest of justice.

In a similar order protecting residential tenants (Executive Order 20-14), Ducey suspended eviction enforcement, again unless necessary “in the interest of justice.”

During this unprecedented time of pandemic, the government is calling for cooperation between citizens, businesses, and lenders.

Now is a good time to review you lease and discuss your options with an attorney here at Davis Miles McGuire Gardner.  Call us at 480-733-6800.