The new law takes effect today, August 9, 2017.
Starting today, apartment managers may provide unlimited finder fees to residents who refer future residents to the apartment community. Prior to the bill’s passage, managers were limited to providing only a $200 rent credit to residents up to five times per year.
A “finder fee” (also known as a “referral fee”) is a fee paid to a person for introducing or arranging an introduction between the parties to a transaction involving the rental of an apartment unit. A finder fee must be awarded to the resident in the form of a rent credit.
Leasing agents and managers are prohibited from receiving a finder fee; however, this prohibition does not restrict a leasing agent or manager from receiving a bonus pursuant to A.R.S § 32-2121, subsection A, paragraph 6.
Additionally, tenant’s receiving finder fees are still prohibited from:
- Showing a unit to a prospective lessee;
- Discussing terms or conditions of the lease with a prospective lessee; and
- Participating in the negotiation of the lease.
The new law comes after Governor Doug Ducey signed HB2039 in March at the request of the Arizona Multihousing Association (AMA). The AMA had long held the position that the prior finder fee limitations were nothing short of an antiquated regulatory barrier for apartment operators.
If you have any questions, please contact Jake Hinman at email@example.com