Commercial landlords must stop evicting small businesses that can't pay rent during the coronavirus pandemic, Arizona Gov. Doug Ducey ordered Monday, a move entrepreneurs around the state have petitioned for since shutdowns were ordered.

Commercial landlords are directed to cease evictions until May 31, and encouraged to defer rent, and waive fees and interest for late payments.

Hundreds of small businesses around the state had signed a petition asking for a moratorium on evictions, saying they faced the very real consequence of going out of business because they couldn't pay rent.

“Arizona is grateful to the many landlords who are already working as good partners with small businesses during these challenging times,” Ducey said in his announcement. “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."

The order affects companies with fewer than 500 employees.

About 1 million Arizonans are employed at 104,000 small businesses, representing about 40% of the private-sector workforce in the state.

What the order says

Ducey's order says that commercial landlords can't lock out tenants, issue them orders to vacate or otherwise interfere with the business, unless a court determines that to be "contrary to the interest of justice."

Ducey's order does not say those debts should be forgiven, only that businesses should avoid eviction in the next two months if they miss payments. It encourages landlords to delay or adjust rent payments.

The order also encourages banks that have loaned money to businesses for commercial mortgages to offer forbearance.

It also requires tenant businesses that get any government help through the crisis to apply some portion of those funds to rent, though it prohibits a landlord from setting a specific percentage or amount.

Small businesses also have asked for additional assistance beyond the various loans available from the U.S. Small Business Administration, and Ducey said there's more work to be done to help them.

"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,” Ducey said.

Business owners pleased with order

Small business advocates praised the order.

"I am really relieved to see this kind of leadership and priority placed on Arizona small business," said Kimber Lanning, founder of nonprofit Local First Arizona. "I think it is critical that we ensure our family-owned businesses have the support they need during this crisis."

Restaurant owner Justin Piazza also welcomed the news, saying rent was a difficult variable for business owners to manage considering the uncertainty regarding how long businesses will be closed.

"We don't know how long this is going to last," he said. "Rent is not something you want to pay when you are low on cash flow."

Piazza and his wife own La Piazza Al Forno in Glendale, La Piazza PHX, and Piazza Romana in Avondale.

The building owner for his Phoenix restaurant simply gave him a free month's rent because the downtown building that houses it closed after a worker in another part of the building was diagnosed with coronavirus. But Piazza's other landlords were more difficult, he said.

He said the landlord for his Glendale restaurant, who he's been in a business relationship with for 13 years, simply ignored him for two weeks as the crisis unfolded. Then finally last week the landlord decided to defer or excuse some of the payments.

Piazza's Avondale business is in a shopping center anchored by a movie theater and clothing stores that all are closed, but the landlord was insisting on rent, he said.

Eventually the landlord company asked for his sales data to see if he warranted a reprieve, he said.

"They want me to jump through hoops for it," he said. "I said, 'Everything else in the plaza is closed. Where do you expect me to get business from?'"

Chef Silvana Esparza, from Barrio Cafe in Phoenix, said the governor's order was "awesome" and will give relief to many business owners.

"I know there are a lot of small businesses that were worried," she said. "There are a lot of people closed down with no source of revenue. Under Arizona law, if you don't pay rent, they can put a lock on your building and take your stuff."

Reach reporter Ryan Randazzo at ryan.randazzo@arizonarepublic.com or 602-444-4331. Follow him on Twitter @UtilityReporter.

Subscribe to azcentral.com today.