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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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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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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Do you use criminal records in your tenant selection process?

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If so, you’ll want to read this.

 

All levels of government should adopt requirements making it clear [that housing] cannot be denied to those with a criminal justice history, unless there is a legitimate public safety reason for doing so.”

-Deborah De Santis, President and CEO of CSH (Corporation for Supportive Housing)

ball-and-chain

 

In November last year, HUD released a memo specifically addressing a practice employed by many rental property owners and managers – the use of an applicant’s criminal records to determine eligibility for rental housing. Just today, HUD released additional guidance for housing providers, further clarifying the memo. That’s when the news media picked it up.

As expected, you’ll hear much talk out there on both sides of the issue. Some claim it’s government overreach. Others celebrate efforts to provide needed support to those reentering communities from incarceration. In my view, as a housing provider, if you’re using clear and objective criteria for evaluating rental prospects, you’re not likely to run afoul of HUD’s position. In simple language, it says:

  • Housing providers should have policies that apply to everyone, and are evenly enforced.
  • An arrest history is not the same as conviction history. Simply because someone was arrested for a crime does not mean he/she committed the crime.
  • If a housing provider considers criminal background when evaluating potential tenants, the housing provider should not have a blanket “one-strike” rule that fails to take into consideration the type of crime, the length of time since the crime was committed, and the applicant’s actions/activities since the crime.
  • Applicants should have the right of “due process” when it comes to the landlord’s qualification criteria. In other words, the applicant should have the opportunity to explain extenuating circumstances, and have the landlord reconsider its decision.
  • Some crimes can be “one-strike” offenses, provided the housing provider is able to justify their policy protects the safety of others, and/or the property.

One important piece of HUD’s guidance on this issue is contained in the following excerpt from HUD’s FAQ on the matter:

…when owners make the decision to reject an applicant on the basis of a criminal record, the owner must provide the applicant with a written rejection notice.  This notice must state the reason for the rejection, advise of the applicant’s right to respond to the owner in writing or to request a meeting within 14 days to dispute the rejection, and advise that persons with disabilities have the right to request reasonable accommodations to participate in the informal hearing process.

Since most of us already provide written notices to prospects when we deny their applications to rent, this shouldn’t be much of a burden. We simply need to remember to inform the prospect of his/her right to request a meeting to dispute a rejection based on criminal history. So far, our credit reporting agency has not, to my knowledge, amended our “Adverse Action Notice” to include such a provision. Until they do, should the need arise, we’ll be adding language to comply with HUD’s rule.

How do you view criminal background information when evaluating a prospective tenant? Will this new guidance change your policies or procedures? If so, how?

 

 

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New Fair Housing Class – Available Nationally

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justiceThe finishing touches have been applied, and it’s ready to go! A brand new class entitled “What’s New in Fair Housing: Cases, Settlements & Trends for Property Managers” is the result of many months of research, analysis, and compilation of information about the steadily-evolving trends and cases around the Federal Fair Housing Act, today. As a property manager, you’re undoubtedly aware of the huge impact this body of law has on our industry. Still, you may find yourself confused about such things as

  • The differences between a “service animal,” “therapy animal,” “companion animal,” and “assistance animal.”
  • What you can and cannot ask a prospective resident about his or her disability.
  • Whether you could be held liable for a discriminatory statement made by someone else.
  • Whether you can continue to use the same tenant qualification criteria you’ve always used, without risking a fair housing claim.

This course was designed as a 3-hour program, but can be extended to as many as 6 hours, depending on the needs of your organization. Believe me, there’s plenty of information to fill the time!

Not only will this class be an eye-opener for all who attend, you’ll actually take away some very practical tools for use in your day-to-day business – stuff you can put to work for your company right away!

Want more information? Ask away, by leaving a comment below!

 

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Wow! This is a crazy market!

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In the last week, in northern Nevada, we’ve seen a dramatic increase in rental activity. Vacant properties are being snapped up in record time, all of a sudden. Have you seen it in your market?

 

In my observation, the increased activity is directly related not only to improved economic conditions, but a subtle shift in our perception of economic conditions. Regardless of where you may stand, politically, there’s no denying that the mood has suddenly become one of optimism. Guarded optimism, perhaps, but we’re seeing evidence of it every day! Continue reading “Wow! This is a crazy market!”

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How many of your owner/clients want to handle their own evictions?

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It's in the judge's hands, now.

 

What if your local court, the one with which you do business regularly as a Property Manager, ruled you can no longer represent your clients in eviction matters? The property owners must handle their own evictions, or hire an attorney.

 

Think that couldn’t happen? Continue reading “How many of your owner/clients want to handle their own evictions?”

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Growing a Property Management Business

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I had to chuckle this morning, when I read an article talking about how easy it is to expand your real estate business by adding property management services.  Easy, huh? I beg to differ.

 

Although it’s certainly true, the steady income of property management activity is enticing, setting up and running a property management operation is entirely different than running a real estate sales business. Yes, your real estate pre-licensing education may have provided the minimum training you are required to have in order to be a property manager (some states require specialized licensing for property management), but did you learn anything about the business of managing investment real estate? If more than an hour of your pre-licensing education was dedicated to property management activity, I’d be surprised.

 

The article claims, “…agents are already familiar with 99 percent of the real estate law they need to know. The other one percent can be found easily.” Seriously? Let’s look at that a bit more closely.   Continue reading “Growing a Property Management Business”

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Property Management on Purpose

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Property Management on Purpose

Much has been said about the “Accidental Landlord,” lately. It seems that a challenging sales market brings out the landlord in all of us. When the demand for housing shifts from owning to renting, the decision to become an investor-owner, rather than a seller, is one many of your clients have either already made, or are making now.

 

Among the many considerations your clients must weigh in this decision is how best to manage their properties. Are they better off managing a rental themselves, or would they be better served by hiring a professional to take care of tenant selection and day-to-day management?   Continue reading “Property Management on Purpose”

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