Arizona Revised Statutes

Ariz. Rev. Stat. § 37-290 (2026)

Cancellation of lease on reclassification of lands; preferred right to lease reclassified land; refund of advance rental payments

✓ current as of May 2026
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A. Upon reclassification of state lands, whether upon application for reclassification or upon initiation by the commissioner, notice of the decision shall be served upon all interested parties of record in the department.  If no appeal from the reclassification is taken as provided for by law, or if the decision of the commissioner is upheld on appeal, any lease upon the land reclassified shall be automatically cancelled on the issuance of a new lease or at the time of auction, whichever occurs first.

B. An applicant for renewal of a lease shall have a preferred right to lease the reclassified land at the reappraised rental thereof for a term not longer than ten years as determined by the department. The preferred right to lease does not extend to a lessee who has not substantially complied with the terms of the lease or who has not placed the land to the use prescribed in the lease during the term of the lease or within the time prescribed in the lease, except when that action was excused for good cause by written authorization by the department.

C. Upon cancellation of the lease of reclassified lands, if the land as reclassified is leased to a person other than the existing lessee or applicant for a renewal lease, the unused pro rata of an advance rental payment made by the existing lessee shall be refunded to such lessee, and the lessee shall be protected in improvements on the land owned by the lessee in the same manner as provided in section 37-322.01.

 

Notes of Decisions
Cited in 5 cases, 1964–2009 · leading case: Havasu Heights Ranch & Dev. Corp. v. State Land Dep't, 764 P.2d 37 (Ariz. Ct. App. 1988).
Havasu Heights Ranch & Dev. Corp. v. State Land Dep't, 764 P.2d 37 (Ariz. Ct. App. 1988). · cites it 4× “See A.R.S. §§ 37-290, -291. With this knowledge, it was certainly not error for the department to attempt to lease the lands in question, so that the land would at least be earning income during this “waiting period” while the department decides the land’s most appropriate…”
Koepnick v. Arizona State Land Dep't, 212 P.3d 62 (Ariz. Ct. App. 2009). · cites it 4× “A.R.S. § 37-290(A) (2003). ¶ 5 Koepnick appealed the reclassification order to the Arizona Land Board of Appeals (“Board”).”
Williams v. Greene, 390 P.2d 907 (Ariz. 1964). · cites it 5× “In a motion to dismiss filed by Defendant he relied solely on the “preferred right to lease-the reclassified land” given by A.R.S. § 37-290. The Commissioner after conducting a hearing, at which time both parties introduced evidence in support of their position, rejected…”
Ewing v. State, 745 P.2d 947 (Ariz. 1987). · cites it 8× “§ 37-335(C)) obviously used the very words "preferred right to lease" because of the previous judicial construction of the "preferred right of renewal" in A.R.S. § 37-290. In fact, § 37-335(B) specifically refers to § 37-290, the statute in Boice .”
Columbia Inv. Co. v. M. M. Sundt Constr. Co., 400 P.2d 132 (Ariz. Ct. App. 1965). · cites it 2× “This court does not wish it to be implied from its decision that approval i£ given to the failure to give notice to Columbia of the decision to reclassify the subject land. Without the matter having been briefed to the court, it would appear that Columbia was entitled to notice…”
— Ariz. Rev. Stat. § 37-290(A) — 1 case
Koepnick v. Arizona State Land Dep't, 212 P.3d 62 (Ariz. Ct. App. 2009). “A.R.S. § 37-290(A) (2003). ¶ 5 Koepnick appealed the reclassification order to the Arizona Land Board of Appeals (“Board”).”
— Ariz. Rev. Stat. § 37-290(C) — 1 case
Koepnick v. Arizona State Land Dep't, 212 P.3d 62 (Ariz. Ct. App. 2009). “A.R.S. § 37-290(A) (2003). ¶ 5 Koepnick appealed the reclassification order to the Arizona Land Board of Appeals (“Board”).”
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