Arizona Laws 37-335.01. Compensation and reimbursement of lessee upon cancellation of lease
A. If an existing lease is cancelled due to reclassification under section 37-335, and if the existing lessee either did not utilize his preferred right to lease the reclassified land or was unsuccessful in obtaining the reclassified lease, the lessee is entitled to receive reimbursement for non-removable improvements as provided in Section 37-322.01, and to receive reasonable compensation as provided in subsection B of this section for damages sustained by reason of the cancellation of the lease.
Terms Used In Arizona Laws 37-335.01
- Commissioner: means the state land commissioner. See Arizona Laws 37-101
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Existing lessee: means any of the following:
(a) The lessee who is entitled to the use of state lands at the time such lands are considered for classification and are classified as urban lands suitable for urban planning. See Arizona Laws 37-331
- Improvements: means anything permanent in character which is the result of labor or capital expended by the lessee or his predecessors in interest on state land in its reclamation or development, and the appropriation of water thereon, and which has enhanced the value of the land. See Arizona Laws 37-101
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Process: means a citation, writ or summons issued in the course of judicial proceedings. See Arizona Laws 1-215
- Urban lands: means any state lands which are adjoining existing commercially or homesite developed lands and which are either:
(a) Within the corporate boundaries of a city or town. See Arizona Laws 37-101
B. The commissioner shall determine the amount of reasonable compensation for damages sustained by the lessee after consideration of the following factors:
1. The time remaining in the term of the lease at the time that the lease is cancelled.
2. The actual use of the leased land.
3. The rentals paid during the term of the lease.
4. The actual amount of economic damage to the production unit caused by cancellation of the lease. In determining the amount of economic damage to the production unit, the commissioner shall not limit the scope of his review to only that portion of the lands involved in the reclassification for the purposes of urban lands development, but shall take into consideration the impact of the loss of these lands upon the overall production unit, including situations where other leased or private lands are necessary and have been leased by the existing lessee for operation as a production unit.
5. Other factors that the commissioner or the existing lessee determine to be relevant.
C. The commissioner’s determination of reasonable compensation for damages under this section may be appealed as provided in section 37-214.
D. Payments for reimbursement or compensation or both as established in this section shall be made by the purchaser or lessee of the reclassified land to the lessee who had been the existing lessee at the time of sale or upon the signing of the lease for the reclassified land. This section shall not prevent the payment for reimbursement or compensation or both from being made in installments if this process is agreed to by the lessee who had been the existing lessee and the purchaser or subsequent lessee.