Legal Updates: November 2023

Legal Updates in November 2023: Eviction Watch Program, New NRED Property Manager Requirements, $3M for Northern Nevada Rental Assistance, Proposed Court Rule Changes

 

New Nevada Eviction Watch Program

The Nevada Housing Justice Alliance (NHJA) has launched a new court monitoring program in an effort to increase awareness of Nevada’s summary eviction process. The NHJA is a coalition of grassroots organizers and community advocates with a stated goal of bringing “more tenant voices to the legislature.” The NHJA lists “Summary Evictions” as one of its top priorities on its website. In furtherance of its goal and priorities, the coalition invites lawmakers to attend summary eviction hearings and observe proceedings. Nevada Assembly members Max Carter, Shondra Summers-Armstrong, and Erica Mosca have all attended eviction hearings as part of this program.  

 

According to an article in the Las Vegas Review Journal, the coalition’s coordinator, Ben Iness, described Nevada’s summary eviction process as  “backwards, contradictory and convoluted.” The coalition cites the procedural order of document filings – and specifically, the requirement that the tenant must file their Answer with the court before the landlord files their Complaint – as a burden on tenants that needs to be remedied. The coalition’s position echoes that of other tenant’s rights groups and lawmakers. A bill proposing structural changes to the summary eviction process (AB 340) was introduced in the Nevada legislature last session; among other things, this bill proposed reversing the existing order of document filing so as to require landlords to first file and serve a Complaint upon the tenant, and providing the tenant additional time thereafter to file and serve an Answer. This bill passed both houses of the legislature, but was eventually vetoed by the Governor. 

 

SB 355: New Requirement for Licensed Nevada Property Managers

SB 355 required the Nevada Real Estate Division (NRED) to revise its “Duties Owed” form (Form 525) to include licensees engaged in property management. SB 355 further clarified existing law which required licensees engaged in property management to utilize this form when executing Property Management Agreements. SB 355 became effective on October 1, 2023.

 

In early October, NRED provided licensees with an updated Form 525 and revised guidance for using this form in accordance with SB 355. As the terms “property manager” and “property management” were expressly included in both, many local landlords raised concerns about the scope of SB 355 and any requirement to use Form 525 with residential lease agreements.

 

In an effort to gain clarity for Nevada’s housing providers, our office communicated with NRED on these concerns. Below is a summary of NRED’s comments and position:

 

What is Form 525?

Form 525 is a disclosure of licensees to a real estate transaction, their representation of specific parties in that transaction, and the duties owed by such licensees to the respective parties. The use of Form 525 is not a new concept as existing law has required it for some time. To this end, all licensees should already be aware of its existence and be familiar with its use. SB 355 required NRED to revise Form 525, which is why licensees recently received notice of the same and a copy of the revised form for future use.

 

Is Form 525 required for all real estate transactions?

No. Form 525 is only required to be used by those holding a license with NRED (“licensees”) in a real estate transaction (or those that should have a license through NRED based upon the scope of services they are providing). Parties not utilizing licensees in a real estate transaction have no obligation to provide or complete Form 525.

 

Is Form 525 required when executing property management agreements?

NRED advises that existing law has always required the provision of a completed Form 525 by licensees to a property management agreement. The execution of a property management agreement has always fallen under the definition of a real estate transaction in existing law so as to require the provision of a Form 525. SB 355 simply revised existing law to expressly clarify this existing obligation. To this end, NRED advises that SB 355 does not change obligations, nor does it change NRED’s enforcement policies as to Form 525 use in this situation.

 

In accordance with existing law, as clarified by SB 355, licensees representing parties to a property management agreement should continue to provide a Form 525 when executing such agreements.

 

Is Form 525 required for residential lease agreements?

NRED advises that Form 525 may be required at time of execution of a residential lease agreement unless (1) there is an exemption from licensure, or (2) the licensee is not actively involved in the transaction.

 

1. Exemption from Licensure

The execution of a residential lease agreement is a real estate transaction under existing law – and accordingly, licensees to such a transaction are generally required to provide a completed Form 525 so as to make appropriate disclosures. However, if there is a valid exemption from licensure, then the use of Form 525 may be unnecessary. The most common form of licensure exemption is that of a residential rental property which is owner-managed (i.e., onsite office, employees of owner and dedicated to that specific property). NRED may not license owner-managed properties, so as to negate the need for Form 525 use when executing residential lease agreements.

 

2. Not Actively Involved in the Transaction

Licensees actively involved in the transaction (i.e., lease of unit and execution of the lease agreement) are required to provide a completed Form 525. Accordingly, licensees who are not actively involved may not be required to provide Form 525. For example, a broker of record for a management company that only provides financial-related services and does not actively engage in the lease-up of individual units is not actively involved in the real estate transaction, and therefore may not be required to provide a Form 525.

 

Disclaimer: It is strongly advised that you confirm any perceived exemptions before relying on same. There are a variety of management models currently in use in Nevada, and exemptions will vary depending upon the individual factors of the specific model. NRED advises that the provision of Form 525 may still be required of non-licensees actively involved in the transaction if such persons were in-fact required to be licensed under applicable law based on the management model and the scope of services they are providing. Stated another way, an unlicensed person cannot simply rely on their lack of a license to avoid provision of a Form 525 if they should have a license (and failed to obtain one).

 

If provision of a Form 525 is required, can you simply include the language and disclosures into the underlying Agreement?

Existing Nevada law requires use of the form in the transaction separately from the underlying agreement. Accordingly, you cannot build the language and disclosures of Form 525 into a lease agreement or property management agreement for ease and convenience. The actual form must be utilized. 

 

Download the New Form 525

Read SB 355

 

City of Sparks to Receive $3 Million in Rental Assistance

The city has already received $1.5 million in rental assistance funds, with an additional $1.5 million anticipated in the next fiscal year. Sparks has introduced two new rental assistance programs: the Eviction Prevention Rental Assistance Program and the Senior Short-Term Rental Assistance Program.

 

According to the Sparks Tribune, Eviction Prevention Rental Assistance Program funds can cover past rent and late fees, as well as future rent, up to a maximum amount equal to three months’ rent. As for the Senior Short-Term Rental Assistance Program, eligible persons over the age of 62 can receive up to $500 monthly for six months if they demonstrate hardship that limits their ability to pay rent, such as a rent increase or financial hardship. The Reno Housing Authority will be administering both programs, and will send funds directly to participating landlords.

 

The Sparks Tribune also indicates the tenant eligibility requirements applying to both programs, which are:

  • Earn at or below 80% of the current published United States Housing and Urban Development (HUD) Income Limits for Washoe County.
  • Be a tenant in the City of Sparks with a current, active lease.
  • Demonstrate financial hardship or emergency.

 

The application process timeline is unclear, and there is still a question of how long landlords will wait before they receive funds. Read the full article here.

 

As an important note, AB 486 expired in June 2023, and landlords are no longer required by law to participate in rental assistance programs or accept rental assistance funds. For more information on payments and the types of payments landlords are required to accept, landlords should consult their legal counsel or contact our office.

 

Nevada Supreme Court to Consider Proposed Amendments to the Justice Court Rules of Civil Procedure 

The Nevada Supreme Court is extending time for additional proposed amendments to the Justice Court Rules of Civil Procedure (JCRCP). The JCRCP are the Court rules applicable to Justice Courts across the State of Nevada – including Las Vegas Justice Court. The JCRCP sets forth procedural rules and processes which the Court and litigants must abide by in actions brought before the Court. The JCRCP includes sections governing Summary Eviction and Small Claims actions.  

 

All proposed amendments are available below.  Proposed changes to summary eviction rules begin on page 179.  In our capacity as legal counsel for the Nevada State Apartment Association, we are reviewing these changes and will provide commentary as needed.

 

We are asking for feedback from housing providers on these proposed amendments.  Please review the document by clicking here, and email your feedback or questions to contact@karsaz-law.com.

 

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