What Happened? Nevada Legislature 2019 (Part 1 of 2)

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2019 was certainly an eventful legislative session for Nevada! A number of bills were introduced, seeking to have a direct impact on the residential landlord/tenant and property management industries, not the least of which was Senate Bill 256 (SB256).

SB256, in its original form, would have brought sweeping changes to Nevada Landlord/Tenant law. The bill sought to protect ‘source of income’ discrimination in housing – ending the practice by some landlords and property managers to refuse to rent to ‘Section 8’ recipients. It would have prevented landlords of ‘low income’ housing from considering a tenant’s past inability to pay rent as a qualifying factor for tenancy. Further, it would have granted rights to tenants for “initial inspection” of a dwelling unit before vacating, and would have required landlords to provide a written summary of possible charges against the tenant’s security deposit, among other changes. SB256 died on the Assembly side, thanks to the strong lobbying efforts of the Nevada Association of REALTORS.

Although SB256 did not make it to the Governor’s desk, parts of that bill snuck in just under the wire, and became law. This was due to a last-minute amendment to SB151. When I say “last minute,” I’m not kidding. The very last day of the legislative session brought additional landlord/tenant provisions to SB151, which became law when signed by the Governor, and takes effect on July 1, 2019.

SB151 affects our industry in a number of ways. First, it clearly delineates a difference between the procedure for eviction of a commercial tenant vs. eviction of a residential tenant, for nonpayment of rent. Commercial tenants continue to be subject to a 5-day “summary eviction” for nonpayment of rent. Residential tenants, on the other hand, are now subject to a 7-day (7 “judicial” days) “pay or quit” action. Once the court orders the eviction action, the sheriff or constable must remove the residential tenant no earlier than 24 hours after the order is posted, and no later than 36 hours after the court order for removal is posted. 

If a residential tenant leaves personal property in the residence after vacating, under SB151, that tenant has 5 days to retrieve “essential personal effects.” Further, the tenant may file a motion (within 20 days) to contest the reasonableness of the landlord’s actions in storage of the property; both the daily storage costs, and the removal procedure used by the landlord. The court must hold a hearing within 10 days of the tenant’s motion, and may award the tenant the ability to retrieve “essential personal effects,” even after an initial 5-day period following removal of the tenant. Further, the court may award the tenant damages up to $2,500, if the court finds the landlord acted improperly in handling the tenant’s personal property. 

For commercial tenancies, the landlord will have no liability for disposing of a tenant’s personal property after the tenant vacates (or is removed), provided the landlord gave a minimum of 14 days’ notice to the tenant via Certified USPS mail. 

In a residential eviction case for nonpayment of rent, the landlord MUST accept the tenant’s rental payment, even if it does not include payment for late fees, utility charges, collection fees, or other items not constituting “rent.” Additionally, SB151 provides that eviction records are automatically sealed by the court if the landlord fails to pursue the action through to a court order for removal of the tenant.

Thanks to a ‘friendly amendment’ from the Nevada Association of REALTORS, a tenant retains all rights and responsibilities under a residential lease when the property is sold in a ‘traditional’ (non-foreclosure) method. Conversely, the new owner of the property is bound to the landlord’s terms under that agreement, a welcome clarification of existing law contained in SB151. 

All eviction notices must be served by a sheriff, constable, or licensed process server!  Due to circumstances of improper service described during hearings for SB151, the final version of the bill provides that all such notices be served by someone licensed to serve notices in Nevada. The landlord may no longer serve these notices him/herself. 

SB151 adds new section to NRS 118A (Nevada’s Residential Landlord/Tenant Act) that defines the term “Periodic Rent.”That definition clearly states that “rent” means only the amount that is payable each month, and nothing more. Presumably, this provision of the bill seeks to omit late charges and tenant repair chargebacks from the definition of “rent.” 

Speaking of late fees,this may be the biggest change to residential landlord/tenant law: SB151 limits late fees significantly. Late fees now may not exceed 5% of the periodic rent (not 5% of the balance then due). Daily (cumulative) late fees are now a thing of the past.

All sections of SB151 become effective July 1, 2019.

Stay tuned for Part 2 of this post, where we’ll take a look at other 2019 changes to Nevada law affecting the property management industry.

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BRAND NEW CLASS

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On Thursday, June 20th, I’ll be teaching a new property management class for the first time in Reno, NV. The class is called “Rental Application Scoring.” The topic is very timely, given the push toward transparency in property management’s approach to tenant screening.

Here’s what we cover in this 3-hour class…

  • Understanding today’s renter
  • Pre-screening rental prospects
  • Renter Qualification Criteria
  • HUD Rules – Criminal history, domestic violence, limited English proficiency
  • Objective rental application scoring techniques
  • Offsetting risk, and adverse action

Class will be held from 1:00 to 4:00 PM at the offices of Ticor Title on Kietzke Lane in Reno. Please let me know if you’d like to attend!

— Judy

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Emotional Support Animals in Rental Housing

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This issue is often confusing for housing providers and property managers. How can we tell if there is a real need for an emotional support animal (ESA), or if the renter is trying to circumvent our pet policies?

 

What questions can we ask, and what kind of verification are we entitled to? These questions (and more) are answered in a NEW class entitled “ESAs in SFRs (and Apts)” being offered in Reno on June 20th. Details and registration information here.

 

If you’re planning to attend this class, and you have specific questions about a situation you are encountering now in your property management practice, please email me. I’ll make sure we cover it in the session.

 

If you can’t attend, yet you have questions on this topic, please ask your questions as a comment on this post. I’m happy to answer publicly. My goal is to clear up the confusion for property managers and other housing providers surrounding this important topic.

 

 

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New Service for Pet Screening!

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Today’s blog post is a guest entry by John Bradford of “petscreening.com.”

 

There are two Ps that can cause property damage – People and Pets.  If you are a housing provider and property manager then you deal with both on a daily basis. Pets are animals but animals are not always pets. This is demonstrated when dealing with Assistance Animals (i.e. service/companion/emotional/therapy/etc.) These animals are not pets, but rather, serve as an assistive device to help an individual with a disability.

The ABCs of Pet Screening

Pets are not a protected class. Housing providers and property managers are free to accept/decline as they see fit. The reality, though, is approximately 45% of applicants have at least one household pet so having a no pet policy can, arguably, be a costly policy. That said, housing providers and property managers should understand the risks when dealing with pets because, after all, if something happens it’s going to be considered on your watch. There are three areas, known as the ABCs, to help significantly improve pet diligence: Affirmation, Behavioral, and Compatibility.  Affirmation is getting the pet owner on the record about the general care of their pet such as having current vaccinations as well as going to a veterinarian on a regular basis. Behavioral is ensuring there is a stated history about a pet’s past and present behaviors such as knowing if FIDO has ever bitten a person or another animal. Compatibility is having more details on a pet’s breed, weight, sex, pictures, vaccinations and more.  The ABCs can vary greatly for each pet. Pets are not equal and neither is the pet’s owner general care.

Assistance Animals Are Not Pets

Assistance Animals are intended to help to help an individual with a disability. The problem in the housing industry is that Assistance Animal fraud does happen. It’s sad, but true, that some pet owners will try to claim their pet is an Assistance Animal just to avoid paying a pet deposit/pet fee/pet rent. The FHAct is intended to protect those who legitimately need Assistance Animals, but there is an incredible amount of complexity in reviewing each claim. Property managers are not fair housing experts, so the pressure to handle these claims correctly is compounded by a lack of expertise. There are some published suggested guidelines from HUD, but these documents still leave many unresolved issues. There remains very little case law to reference, so property managers must do their best to determine if the requestor’s documentation is both reliable and credible. It’s advisable to request documentation about the disability-related need for the Assistance Animal, verify the therapeutic relationship between the requestor and verifier, request information about licensure, registration, profession, compliance of the verifier, and confirm the animal does not present a direct health or safety threat to others or has a past history of such behavior. It’s inadvisable to request documentation about the requestor’s disability, share/provide access to requestor’s medical records with others (HIPAA privacy laws), limit reliable/credible documentation to medical doctors/physicians only (there is no exhaustive list), require animal training documentation (except for Service Animals), implement breed and size restrictions, and charge a fee of any kind. There are still subjective areas of interpretation such as telemedicine, formulaic on-line questionnaires to issue recommendation letters for Assistance Animals, video counseling, and for-profit businesses exclusively focused on issuing recommendation letters for Assistance Animals. In summary, dealing with Assistance Animals can be complex and stressful.

Pet (and Assistance Animal) Screening – Liability Reduction & Revenue Potential

For clarity, you can charge fees for pets, but you cannot charge for Assistance Animals. There is a real opportunity for housing providers and property managers to generate new pet-related revenues assuming one has the insight into the ABCs of a specific pet. Variable pet deposits/pet fees/pet rents are rarely utilized, but are very achievable when you have the right data at your fingertips.

The options for housing providers and property managers are usually to handle these matters in-house or outsource the review/decision making to an attorney which can be expensive. Now, there is a third option which is relatively new to the marketplace but is rapidly gaining traction.  It is PetScreening.com.  This is not an advertorial because PetScreening.com is no cost to housing providers and property managers. In fact, the tool can actually help generate new pet-related revenue streams while adding a third-party layer of liability protection and the validation of Assistance Animals. PetScreening.com provides your firm with a standardized way of handling household pets and Assistance Animals. The tool creates a comprehensive Pet Profile for each pet based on the ABCs discussed above. Each Pet Profile is accessible 24×7 in an on-line report with a unique URL that can be shared with your property managers, field inspectors, maintenance vendors, and, perhaps, even your property owners. Every Pet Profile is up-to-date and receives an easy-to-read 1 to 5-paw score. Only Property Manager users can see the factors that impact each Pet Profile score. The scoring can be used to help create standardized pet-related fee schedules that are variable and correlate with each Pet Profile score. Lastly, not only is PetScreening.com zero cost to housing providers and property managers, but a rebate is earned and paid quarterly for every active Pet Profile. The scoring, however, is not applicable to Assistance Animals. These types of applications are reviewed, on a case by case basis, by the PetScreening.com team of reviewers who work with the requestor/applicant to seek credible and reliable documentation to support the Assistance Animal claim.

Check it Out!

In closing, housing providers and property managers are experts at managing rental assets such as single-family homes, multi-family communities, and vacation rentals. Pets and Assistance Animals are a necessity of the housing industry, but they add both additional complexity and liability to your business. PetScreening.com is free, delivers incredible value to its users, and is changing the way the housing industry deals with pets and Assistance Animals.

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Rental Scams 2.0

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Property Managers across the country are reporting an uptick in rental scams. These scammers or “fake landlords” are becoming increasingly sophisticated in their methods, and are taking advantage of a robust rental market, and renters’ sense of urgency in the face of housing shortages in many markets.

 

In previous years, one of the more common scams involved pirating a rental ad (typically on Craigslist), copying the photos and basic text of the ad, changing the contact information, and pricing the property at well-below market rental value to generate leads. Then, when the unsuspecting renter called, the scammer would tell them the property could be shown in a few days, but to send money to secure the rental now. It worked. Many renters were taken advantage of in this manner. We property managers caught on to that rather quickly, and started watermarking our property photos. This simple step seemed to eliminate much of the fraud associated with “fake ads.”

 

That is, until recently…

Today, the scammers are increasingly savvy to the widespread use of electronic lockbox systems for showing vacant rental homes. The newer scams go something like this:

  • The scammer creates a fake listing on Craigslist, Trulia, HotPads, Zillow, or some other online rental site.
  • Unsuspecting renters contact the scammer in response to the listing.
  • Meanwhile, the scammer registers through your system to view the property as though he/she were an actual prospect, obtaining an access code to view the home.
  • The scammer talks to the victims using a VoIP number like Google Voice and tells the victims they are the owner of the property.
  • While a victim is at the door to the property and on the phone with the scammer, the scammer provides his fraudulently-obtained access code to the victim, and the victim is able to enter the property.
  • In some cases where a photo ID is required the scammer uses a fake ID. In others he gets the victim to text him their ID and then uploads that to satisfy the requirement.
  • After the victim has viewed the property, the scammer then requests the victim wire the deposit to the scammer to secure the rental.
  • The first the property manager learns of this is when the renter comes to your office to pick up keys to the home…

 

What can we do, as professional property managers, to protect the renting public, our companies that bear the burden of dealing with unauthorized tenancies, and our owner/clients who depend on us to reasonably secure their properties?

 

  • Check your vacant properties frequently! If it’s vacant, whether or not you’ve had showings on the home, you need to check the property at least weekly.
  • Conduct a periodic Google search using your vacant property’s address. Does it show up as listed for rent on any site/s other than the ones you’re using? Look at the ads.
  • Flag and report any unauthorized advertisements.

 

Get the word out!

  • Tell your prospective renters to be wary of rental scams.
    • Beware of owner/landlords who are “out of town.”
    • Beware of rental rates that seem ‘too good to be true.’ They probably are.
    • Beware of a “landlord’s” urgency to obtain money or personal information from you.
    • Don’t wire money to ANYONE, unless you’ve verified that they are actually the owner, or the owner’s authorized agent.

 

Wherever there are housing shortages and anxious consumers, there will be a criminal element. Criminals prey on the most vulnerable of us. As professional property managers, we have to take this seriously, and be proactive in our efforts to prevent rental scams.

 

What additional methods of rental scam prevention do you use?

 

 

 

 

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Emotional Support Animals – Brand New Class!

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Greetings on this sunny summer day! Just a quick note to let you know I have a brand new course that was just approved by the Nevada Real Estate Commission for 3 hours CE credit in Property Management. The title is “ESAs in SFRs (and Apartments).” 

The course is an exploration of the Property Manager’s role in addressing requests from residential renters for “Emotional Support Animals” in single family homes, apartments, and other dwelling units. We’ll talk about verifying the need for the ESA, requirements for an animal to qualify as an ESA, and the latests cases and settlements around this often-misunderstood issue.

The very first offering of this course will be in July in Reno. If you plan to be there, I recommend you register early, as space is quite limited. Here’s a flyer with more information.

Best wishes for an enjoyable summer, everyone!

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My dad was a roofer.

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awningI still remember those days, sitting on a very high stool, in his workshop/office. Busying myself with lord-knows-what, while he worked. Little pieces and parts…all of them, scattered on the desk.

Lots of pencils. Drawings. Unopened mail. Invoices never sent. Collections never pursued. No systems or procedures in place.

Just the art.

Just the art of making and repairing all types of roofs, and fabricating/hanging aluminum awnings. And, yes. They were all customized; works of art. Yet, the business acumen was missing. Big time.

I’m pretty sure I became a property manager to show him how that part is done. 

It is forever mine then, to remember and embrace the art of it. 

And you?

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Safety First!

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In our business as property managers, we recognize the importance of providing our tenants with a safe property in which to live or do business. If it’s within our control and area of responsibility, we eliminate obvious safety hazards, as an important aspect of our overall risk-management strategy.

 

Yet, how often do we consider our own safety?

 

The times I have felt most vulnerable as a property manager were when I was showing a vacant home or commercial space. Taking advice from experts in the field, I realized the necessity of developing a pre-screening checklist. That checklist gives me the opportunity to not only eliminate the prospects who are clearly unqualified to rent the home (or lease the space), but to learn a bit about these callers, before arranging a showing. My checklist includes such questions such as, “How soon do you need to move (or relocate your business)?” “How long have you lived here (or how long in business)?” and “Do you have any credit issues of which we should be aware?” These questions help set the stage for a successful first meeting.

 

Do you confirm the identity of the person you are meeting, before you meet?

 

Just about every article available on this topic speaks to the importance of meeting a prospect at your office, first. Do you actually do that? Or, is it more likely, you meet at the vacant property? At minimum, please get the prospect’s photo identification before you meet. With the ease of today’s technology, asking a prospect to text you a photo of his/her driver’s license is not a burdensome request.

 

Alternatively, you might wish to employ a widely-popular method of showing vacant properties – an access-controlled (self-showing) lockbox system. Companies such as Rently and ShowMojo can verify your prospects’ identity, schedule controlled self-guided showings, and follow up immediately on calls and inquiries. These systems relieve you of not only the safety risk, but the hassle of no-shows, and lost time in the showing process. Of course, not all properties lend themselves to using such a system.

 

A few tips for your safety, outside the showing process…

 

  • Accept your rent payments electronically, rather than by personal delivery. And, “no cash” is a wise policy to adopt.
  • Make sure lines of communication with your clients and customers are wide open, and potential conflicts are resolved in a swift, calm manner.
  • You may, as I often do, work from your home. That’s great – it allows for a much more flexible wardrobe! Just be sure to never provide your home address to owners, tenants, or vendors. Use a P.O. Box for your mail, or the physical address of your office.
  • Got speed dial? Use it. Make sure it includes at least 1 member of your office staff, a family member, and police or fire departments.
  • Watch what you share on social media. Just because your Facebook page is set for optimum privacy, doesn’t mean it’s private. Think before you post, and limit the amount of personal information you share.

 

There are so many more great tips out there for those of us who work in this industry. Perhaps, you have some tips you’d like to share? If so, please comment on this post, or email me! judy@judycook.biz. We may include them in a future article.

 

 

 

 

 

 

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