What Happened? Part 2 – Nevada Legislative Update 2019

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In Part 1 of this series, we discussed the activities of the 2019 Nevada Legislative Session, specifically SB 151, as it relates to property management in Nevada. Today’s post will discuss additional bills passed during the session which will impact our industry.

NEVADA REAL ESTATE LICENSEES

SB 230 affects real estate licensees in a number of ways. First, and perhaps most important,real estate licensees MUST include their real estate license number on any and all advertising materials, including flyers, business cards, websites, social media, and other advertising venues. This portion of the bill became effective on July 1, 2019, so be sure to update all your advertising now! The bill also tasks the Nevada Real Estate Commission with implementing regulation allowing conditions and limitations for licensees to advertise using a nickname.

Also effective July 1, brokers are no longer required to “prominently display” licensees of agents associated with the brokerage; they must now be kept in a secure manner, and made available for inspection by the public or the Nevada Real Estate Division.

The bill brings many changes to the education requirements for real estate licenseesin Nevada. For all new licensees (those submitting applications for licensing on or after January 1, 2020), pre-licensing education will now be a total of 120 hours (instead of 90 hours). At least 15 hours of the pre-licensing instruction must focus on preparing contracts, and another 15 hours must be specific to agency laws and requirements.  

Continuing education requirements are also set to increase, pending mandated new regulation by the Commission. The new regulation “must require a minimum of 36 hours of continuing education.”  In conjunction with new continuing education requirements, the Commission is also required to include regulation authorizing someone aged 65+ years to apply for an exemption from the continuing education requirement.

EVICTION ACTIONS

In addition to the changes discussed in my post on SB 151, the Nevada Legislature also passed SB 74. This bill allows for appeal of an eviction orderby either party within ten (10) days of the date of the order. Additionally, the bill provides that, should a Landlord unlawfully recover possession of the property, a Tenant is entitled to expedited relief (and can recover possession), even if there is an eviction action pending. This bill takes effect October 1, 2019.

AB 266 – This bill became effective on July 1, and provides for automatic sealing of court records on eviction casesthat do not go all the way through to a lockout order. It is largely a cleanup bill, clarifying existing law. In short, if the court does not enter an award for possession of the property to the landlord, the case dies, and the records are sealed. 

ANTI-DISCRIMINATION

As many of you are aware, some of the older governing documents of homeowners associations contain language that is in direct opposition to the provisions of the Federal Fair Housing Act. SB 117 took an important step toward correcting the impacts of such language by allowing property owners to record a separate document with the county that strikes the discriminatory language in their association’s governing documents. The bill takes effect on October 1, 2019. 

MULTIFAMILY PROPERTIES

SB 212 went into effect on July 1st, and allows towing companies to post notices on improperly parked vehicles, provided the towing company has a contract for that purpose with the owner or manager. The bill also allows immediate towing without further notices if the vehicle was previously tagged three or more times in the same multifamily complex during the preceding six months.

For managers of multifamily housing that meets the definition of “Affordable Housing” and is accessible to persons with disabilities, SB 104 is an important read. The bill requires such managers and owners to make quarterly reports to the Housing Division to assist in its mission to maintain accurate records of affordable housing in the state. The bill took effect July 1, 2019. 

SB 367 provides that renters of low-income housing funded in total or in part by the “Account for Low-Income Housing” will be allowed to keep one or more pets, subject to minor restrictions. This bill goes into effect on January 1, 2020. 

CONTRACTORS

As property managers, we’re often responsible for selecting contractors to perform work on the properties we manage.  SB 397 became effective July 1, 2019. The bill authorizes licensed contractors to perform work in specialties outside the scope of his/her contractor’s license provided: (1) the work is not plumbing, electrical or HVAC, and (2) the value of the work does not exceed $1,000. 

AB 175 – Establishes a formal registration process at the state level for “Environmental Health Specialists.”Although many existing specialties are exempted from the registration requirement, the bill takes aim at uneducated and unlicensed vendors who practice in this area of work. 

LASTLY…

If your business involves selling real estate as well as property management, AB 335 will interest you. It tightens up requirements on a homeowners association for furnishing “resale packets” and the fees charged relating to a change in ownership of a home/condominium in a common-interest community. Most importantly, resale packets must be valid for a period of not less than 90 days.

It’s important to note that the 2019 Nevada Legislative Session also took up a number of bills attempting to address the increasing problem of homelessnessin our state. One of those bills, AB 174, establishes the Nevada Interagency Advisory Council on Homelessness to Housing. This is an important step toward bringing together a number of state agencies, as well as experts in the public realm to address the homelessness issue in Nevada. We’ll be watching the Council’s activities closely.

This was a busy session for the Nevada Legislature! Some of the greater impacts of the bills discussed in this space will be determined by the local courts, over the next couple of years. Please share your thoughts and feedback, by commenting on this post. Thanks for reading!

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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. 

SB151 also 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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A day in the life of a Property Manager

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A day in the life of a Property Manager...

This one came in from a Facebook friend, and fellow property manager. It’s a situation that occurs more frequently than you might imagine, so I’ll share it with you for your feedback.

 

“I had to do a lock-out eviction on a tenant who owes about $2,000 in back rent. She is the only tenant on the lease, although she has allowed other people to live there. We have possession of the property now, but there’s an issue with personal property. Everyone who has ever lived there is claiming ownership of some of the property. None of them were ever on our lease. The tenant who was named on the lease states that none of the property is hers, and she doesn’t care what I do with it.

 

What do I do? Continue reading “A day in the life of a Property Manager”

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Charging Tenants for Eviction Costs

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Charging Tenants for Eviction Costs

This question came in from a property manager last week, and is one that arises rather frequently among residential property managers in Nevada.

 

The story goes something like this…

 

It’s the 5th of the month, and the tenant hasn’t paid rent. The property manager assesses late charges, and warns the tenant that he faces eviction if the rent’s not paid by the close of business. On the morning of the 6th, seeing that the rent is still unpaid, the property manager serves an eviction notice for non-payment of rent. The tenant now has five “judicial days” to pay the rent or be evicted from the dwelling. On the 7th day of the month, the tenant comes into the office with the full amount of rent and accrued late charges.

 

Can the property manager refuse to stop the eviction, pending the tenant’s payment of eviction costs (filing fees and/or charges for serving the notice)?

  Continue reading “Charging Tenants for Eviction Costs”

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Security Deposits and Fair Housing Laws

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A few days ago, I participated in a discussion around security deposits. The issue at hand was whether a landlord (property manager) could increase a security deposit for a single tenant, and not run afoul of fair housing laws. I maintain that YES, in Nevada, you can charge different deposit amounts for different tenants.

Continue reading “Security Deposits and Fair Housing Laws”

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Questions from Property Managers – Renting to Sex Offenders

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This question comes up frequently, and the response might surprise you.

 

Peter writes,

“Can a landlord refuse to rent to a convicted sex offender, and can a homeowners association have rules and regulations prohibiting owner/landlords from renting to sex offenders?”

Continue reading “Questions from Property Managers – Renting to Sex Offenders”

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I Was Going to Write About Bed Bugs

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After all, everyone else has. And, there are a bunch of good articles out there on the subject. I have read many of them, and I suggest you do the same. After all, what do I know? I’m not a pest control expert. All I can tell you is this; I’ve gotten 3 emails in the last week about existing bedbug problems – all of them in the Reno-Sparks area. I have to conclude, bed bugs are a problem in Reno-Sparks rental properties, just as they are in many other locations throughout the United States. Bed bugs seem to be more prevalent in multifamily properties, than they are in single family. Makes sense, doesn’t it? You know, adjoining walls, and such…

 

But, I’m not writing about bed bugs, because, I really want to write about something else. And, besides, I’m no expert. I don’t have a pest control license.

 

But, speaking only for Nevada, NRS 118A says, in order to be considered “habitable,” a residential rental unit must be “reasonably free of insects” at the time the tenant moves in. Continue reading “I Was Going to Write About Bed Bugs”

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Questions from Property Managers – How can you tell if the tenant is really gone?

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Today’s question comes from one of our faithful readers, a fellow Nevada property manager, and a valued guest contributor, Bob Frenchu. Bob writes:

 

“When do you decide the tenants are out of the property?

 

Let’s say you’ve served a 5-Day Pay or Quit eviction notice. Noon of the fifth day rolls around, the tenants aren’t answering their phone. You drive out to the property to check to see if they’ve moved out of the premises. You knock, get no answer, open the door and find:  Continue reading “Questions from Property Managers – How can you tell if the tenant is really gone?”

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Nevada Legislative Update – Landlord/Tenant Law

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AB226 Becomes Law in Nevada

Nevada’s AB 226 made its way through both the Assembly and Senate, is now enrolled and approved by Governor Sandoval. This change in landlord/tenant law becomes effective October 1, 2011.

 

Originally, the bill was written to afford foreclosure protections to tenants in short-sale properties, and to lengthen the time (from 24 to 48 hours) before a lockout could occur in an eviction. These two provisions were stripped from the bill via a significant amendment on the Assembly side.

 

The final bill contains the following new provisionsContinue reading “Nevada Legislative Update – Landlord/Tenant Law”

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