Free Arizona Rent-to-Own Contract Template

An Arizona rent-to-own contract combines a rental arrangement with a path to buying the property later. The renter pays rent, and some or all of the deal is set up so they can take ownership at an agreed price.

How you structure it matters more in Arizona than almost anywhere else, because the structure decides which law governs a default.

An Arizona rent-to-own contract can be built two very different ways, and the state has a dedicated statutory scheme for installment purchases of real property in Title 33, Chapter 6, Article 3 of the Arizona Revised Statutes. Whether it reaches your deal is the first question to answer. Statutes are amended from time to time, so confirm any figure below before you rely on it.

Which Structure You Choose Decides the Law

Section 33-741(2) defines a “contract” for this article as a contract for conveyance of real property, a contract for deed, a contract to convey, an agreement for sale, or any similar contract through which the seller has conveyed equitable title to the purchaser and is obligated to convey the rest of the title on payment in full.

Two things in that definition do the work. Equitable title has to pass, and the seller has to be obligated to convey. A straightforward lease with an option to buy usually does neither, because an option is a right the renter may or may not exercise. So an agreement for sale falls inside Article 3, while a lease-option often sits outside it. Decide which one you are writing before you fill anything in.

Time Is of the Essence, and How It Is Waived

Under § 33-742(C), where the contract says time is of the essence, that provision is waived only if the seller accepts money due under the contract in an amount less than the total then owed. Money received by an account servicing agent is not acceptance by the seller, and simply delaying a remedy waives nothing. A seller who has waived the clause can reinstate it by serving written notice on the purchaser, in person or by first class mail, at least 20 days before strict performance is required.

Non-Payment and Everything Else Are Handled Differently

Section 33-742(A) splits the seller’s remedies. Where the default is a failure to pay, the seller may forfeit the purchaser’s interest after the applicable waiting period and the notice under § 33-743. Where the seller elects to accelerate the principal balance, or where the default is for any reason other than non-payment, the seller may only foreclose the contract as a mortgage under § 33-748.

Not what your contract says, if the contract is one Article 3 covers. Section 33-742(D) sets waiting periods that run from the date the money was due, and they scale with how much of the purchase price the buyer has already paid:

• Less than 20 percent paid — 30 days.
• At least 20 percent but under 30 percent — 60 days.
• At least 30 percent but under 50 percent — 120 days.
• 50 percent or more — nine months.

Section 33-742(E) is specific about what counts toward that percentage. Only down payments made to the seller, principal payments made to the seller under the contract, and principal payments made to other lienholders where that principal forms part of the stated purchase price. Rent credits and interest do not appear in that list.

Once the period has run, § 33-743 requires a notice of election to forfeit that sets out what has to be paid to reinstate, with a deadline at least 20 days after the notice is served. A purchaser who pays in time avoids the forfeiture, and the seller or the account servicing agent then records a notice of reinstatement with the county recorder.

Tip: A buyer who has paid half the price has nine months of protection, not the 30 days a contract might name. Track the running percentage from day one, because it changes what you are allowed to do.

The order of decisions matters, because the first one changes everything after it.

1. Decide the structure. An agreement for sale passes equitable title now. A lease with a purchase option does not.
2. Write the purchase price, how it is calculated, and the deadline for buying, so neither side argues about it later.
3. State plainly whether any part of the rent is credited toward the price, and how that credit is recorded.
4. Decide whether to appoint an account servicing agent to hold documents and collect payments, since § 33-741 contemplates one.
5. Have both parties sign and date, then keep a complete copy with every attachment.

Because so much depends on the structure you pick, an Arizona real estate attorney is worth a call before you sign, particularly for an agreement for sale.

Alongside the usual rent terms, three items in an Arizona rent-to-own contract do the heavy lifting.

• The purchase price and the deadline — a fixed figure or a stated formula, with the date the right to buy ends.
• Any option fee or rent credit — the amount, whether it is refundable, and whether it reduces the price.
• Repairs and taxes — who pays for what while the renter is still renting.

Attach anything you reference rather than summarizing it, and give the other side a full copy at signing.