FACTS: A property manager and a landlord entered into an Arizona REALTORS® Property Management Agreement to lease the landlord’s property.  The property was listed on the MLS, and a real estate agent brought a prospective tenant to view the property.  The tenant thereafter wanted to enter into a lease for one (1) year.

However, the property manager states that the Property Management Agreement is a “second-party contract,” and therefore the property manager and landlord have no requirement to sign the lease. The property manager states the lease is a document that is a result of the Property Management Agreement, therefore the landlord and property manager are not bound to sign the lease.

ISSUE: Does a landlord or property manager (on behalf of the landlord) need to sign a lease?

ANSWER: Yes.

DISCUSSION:         

A lease for a period of one (1) year or longer must be in writing and signed by the parties to be charged pursuant to the Statute of Frauds.  A.R.S. §44-101(6).

While a Property Management Agreement exists between the landlord and property manager, that contract does not have a legal effect on the contractual relationship between the landlord and tenant.  Accordingly, because the Statute of Frauds is applicable, the landlord (or property manager as agent of the landlord) will need to sign the lease for the lease to be legally binding.