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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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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Summer Newsletter for Tenants

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Lake Tahoe on the California/Nevada border
Lake Tahoe on the California/Nevada border

Tenant Newsletters are a great way to keep your renters informed, and remind them of the routine maintenance tasks for which they’re responsible.

Yet, year after year, many of us either crank out well-worn repeats of earlier newsletters, or worse, ‘stock’ newsletters written by an outside organization. And, some of us simply postpone the task until it’s a moot point. In talking with property managers all over the country, I hear more and more frequently their frustration over tenants not reading the newsletter, when it finally does reach their in-box.

 

How can we better communicate these important messages?  

Continue reading “Summer Newsletter for Tenants”

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Judy’s Bill Watch List – Nevada 2013 Legislature

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NevadaThis is shaping up to be a very light year for bills impacting the property management industry in Nevada. Both landlords and tenants have little to watch, in terms of new legislation on the horizon. Property Managers may be interested in a few of the items on my watch list, however.

 

Unless something changes significantly in the next few weeks, this is the last of my posts on the Nevada 2013 Legislature. I’ll keep you informed, however, should circumstances warrant a “heads up” for Nevada Property Managers. For now, in no particular order, here’s what I’m watching. You’ll note that each bill number listed links to the bill information itself:

Continue reading “Judy’s Bill Watch List – Nevada 2013 Legislature”

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The Four Agreements of Property Management

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“Just Because _____, Doesn’t Mean _____.”

If you’ve sat in on any of my sessions any time in the last several years, you’ve probably heard me make that statement. It usually goes something like this,

 

Just because the owner didn’t return your call, doesn’t mean he is avoiding you. Call him again.”

 

Never Make Assumptions – Agreement #1 for the Successful Property Manager

 

We property managers are a pretty smart bunch. If we’re any good in the business, we’ve learned about (read: internalized) the typical events between landlords, tenants, and property managers that may come up on any given day. We have rules, and we stick to those rules, or we risk watching our businesses crumble. The property manager who survives for more than 5 years in the business knows what to expect, and how he’ll react to it, when it shows up. Continue reading “The Four Agreements of Property Management”

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Property Inspections and Tenant Damage

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A Las Vegas property manager asks...

This question arrived via email, a few days ago:

“I’m a property manager in Las Vegas. Our company manages about 300 rental homes in the Las Vegas Valley. We conduct routine interior inspections of our tenant-occupied properties on a semi-annual basis. During one such inspection last week, I noted a couple of interior doors with fist-sized holes in them, a huge oil stain in the driveway, and the backyard overgrown with weeds.  I realize these damages are the tenant’s responsibility, but I was told I have to wait until the tenant moves out to deduct the repair costs from his security deposit. Isn’t there something I can do now to get these repairs taken care of?”

Despite the popular misconception that we must wait to enforce the tenant’s obligation to repair damages, we not only can but should address these issues promptly when discovered. I tend to think of it this way; if the tenant has managed to do as much damage as you’ve described in just six months, what might the property look like in another year? Are you holding enough money in the tenant’s security deposit to cover that risk? Probably not. Nevada landlord/tenant law recognizes this.

NRS 118A.440 affords property managers (and owner-landlords) a little known opportunity to address these situations as soon as we become aware of them: Continue reading “Property Inspections and Tenant Damage”

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Roommates

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Greetings, fellow property managers! Today’s blog is a guest post by one of our own, Robert Frenchu of Coldwell Banker Best Sellers in Carson City, Nevada. It’s a humorous take on the myriad issues surrounding roommates in rental properties. Enjoy!

Roommates

Roommates

The very word sends chills down the spine of property managers. The only other things we’d rather not hear are, “…water leaking since last Tuesday,” and “…when the garbage truck plowed through the living room….” Why do we develop nervous tics whenever roommates apply for a rental? Besides dealing with the competing priorities and motivations of two or more different people, roommates many times have trouble understanding some basic concepts.

A lease is a contract— a legal agreement between two- or more- parties. Any time you add another party to the mix, things can get more complex, and often do. Many leases have language that describes the obligation being between the owner and multiple tenants, and that language is “together and severally.” (Think of the word “severed” instead of “several.”) That means the agreement is • between the Owner and Tenants A & B, and • between the Owner and Tenant A, and the Owner and Tenant B.

Now that you understand the concept behind multiple signatories on contracts, let’s cruise through some examples of situations you need to think about before you sign on the dotted line. Continue reading “Roommates”

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Surety Bond in Lieu of Security Deposit

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Surety Bond in Lieu of Security Deposit

Joining states like California and Florida, who have responded to real estate market conditions, the Nevada Legislature amended NRS 118A.242 in 2009, allowing landlords and tenants to negotiate the acceptance of a surety bond in lieu of all or part of a security deposit on a residential dwelling. Now, instead of having to come up with a large sum of money in advance, tenants (if the landlord agrees) are able to purchase a surety bond to cover all or part of the security deposit.

Here’s how the Nevada law reads:

(emphasis added)

NRS 118A.242  Security: Limitation on amount or value; surety bond in lieu of security; duties and liability of landlord; damages; disputing itemized accounting of security; prohibited provisions.

1.  The landlord may not demand or receive security or a surety bond, or a combination thereof, including the last month’s rent, whose total amount or value exceeds 3 months’ periodic rent.

2.  In lieu of paying all or part of the security required by the landlord, a tenant may, if the landlord consents, purchase a surety bond to secure the tenant’s obligation to the landlord under the rental agreement to:

(a) Remedy any default of the tenant in the payment of rent.

(b) Repair damages to the premises other than normal wear and tear.

(c) Clean the dwelling unit.

3.  The landlord:

(a) Is not required to accept a surety bond purchased by the tenant in lieu of paying all or part of the security; and

(b) May not require a tenant to purchase a security bond in lieu of paying all or part of the security. Continue reading “Surety Bond in Lieu of Security Deposit”

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5 Signs You Might be Dating a Property Manager

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5 Signs You Might be Dating a Property Manager

Property Management is my thing. I’ve been at it for nearly my entire adult life. Dating, on the other hand, is something I’ve done on and off, over the years. Surprisingly, I’ve never quite gotten the hang of it. Like a fish out of water, the dating scene just hasn’t been a good fit for me.

There are many lessons to be learned in the dating world, no matter the outcome.  One of those lessons came to me pretty early.  I learned to be careful what I say about my employment. When I would come right out and tell prospective sweeties that I’m a property manager or landlord, it conjured up some pretty powerful stereotypes. Those stereotypes served to draw some rather strange prospects to my door.

So, if you are scrolling through an online list of potential dating prospects, and you see employment references like “real estate curator” or “property preservation specialist,” or “asset manager,” beware. You might just be dating a property manager. Continue reading “5 Signs You Might be Dating a Property Manager”

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Consistency and Documentation – The Property Manager’s Mantra

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Your telephone interview with a prospect will make or break the rental transaction.

A question that arises frequently among property managers is, “How can I be sure I’m treating all rental prospects equally?”

The initial telephone interview with a prospective resident sets the stage for the landlord/tenant relationship. Your responses and behavior at this critical stage are the first indication the prospect has of your professionalism. And, for you, it’s your first opportunity to make a connection with the prospect. These moments will either make or break the rental transaction. Many fair housing complaints are filed in response to prospects’ perceptions of how they were treated at the very earliest stages of the relationship. Continue reading “Consistency and Documentation – The Property Manager’s Mantra”

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