SB 381 Preliminary Guidance on New Nevada Law
Nevada’s newest rental housing law, SB 381, took effect July 1, 2023. This preliminary guidance is based on SB 381’s text as enrolled and may be amended based on judicial or other interpretations. For legal advice on a matter or specific guidance on this topic, please consult legal counsel.
What is SB 381?
SB 381 revises NRS 118A.290, which is a law that requires that landlords keep a dwelling unit (an apartment or single family home) in a habitable condition. SB 381 is effective July 1, 2023.
SB 381 prohibits a landlord from charging a tenant fees for repairs, maintenance tasks, or other work that the landlord is required to perform under NRS 118A.290. This includes:
- charges for copays or deductibles of an insurance policy that covers the unit
- fees or other charges under a service contract that covers the unit
Landlords are required to keep a residential unit habitable; they cannot pass that burden to tenants through fees and charges.
SB 381 allows a landlord to charge a tenant any fee or other charge for repairs, maintenance tasks, or other work, for a condition the tenant caused (this includes their occupant or guest), either intentionally or negligently. Tenants are responsible for the costs associated with damages they caused, and they can be charged for those costs. This is in line with most lease terms and Nevada law generally anyways, but it has recently been made into law.
How does SB 381 impact Nevada landlords?
SB 381 prevents landlords from charging fees to tenants, either as a “pass through” or a cost reimbursement, if those fees are legally required to be paid by the landlord. Keep in mind that SB 381 is only applicable to those fees which are related to habitability, so fees which have nothing to do with habitability (which is defined in NRS 118A.290) should not be affected by SB 381. SB 381 is only applicable to fees that are related to the habitability of a dwelling unit. NRS 118A.290 establishes the landlord’s obligation to maintain habitability in the dwelling unit itself, and not in other locations of the property (though there are some limited exceptions to this).
How are certain tenant fees affected by SB 381?
Landlords should review their existing lease forms and identify any fee (or provision allowing a fee to be charged) that relates to the habitability of a residential unit, including fees for insurance copays or deductibles in the event of a loss, and service contract fees for appliances and systems that are necessary for habitability. Here are some examples of commonly charged fees and how they are impacted:
Home Warranty Fee / Appliance or Equipment Service Contract Fees
If a landlord is charging a fee to tenants for a home warranty covering the unit, or for a service contract that covers things related to habitability in the unit (like water systems, plumbing, and electric systems), such fees would likely be improper under SB 381. The exception would be fees or charges for a condition that the tenant (or their occupants or guests) actually caused. If landlords are currently charging these types of fees, they should consult with their legal counsel regarding possible lease revisions and/or policy changes.
Utility Fees
Existing law requires landlords to maintain the systems that provide utilities to the unit, but not the actual utilities themselves. As a result, charging tenants for utilities they used in the unit does not appear to be affected by SB 381. When it comes to trash utility fees like “valet trash” or monthly garbage fees, landlords do have a duty to provide “an adequate number of receptacles for garbage and rubbish in a clean condition” as a measure of habitability; however, existing law specifies that this obligation only applies at the “commencement of the tenancy.” As long as the unit is provided with adequate trash receptacles at the start of the tenancy, charging tenants for trash utility fees does not appear to be affected by SB 381.
HOA Fees
Landlord habitability requirements do not expressly include any measure of HOA compliance, so charging tenants certain HOA fees and assessments does not appear to be impacted by SB 381. Additionally, HOA assessments are used and applied by HOAs in a variety of ways – none of which solely apply to the habitability of a dwelling unit, which is required in order for SB 381 to apply.
Pest Control Fees
Landlord habitability requirements include keeping the unit “reasonably free from all accumulations of debris, filth, rubbish, garbage, rodents, insects and vermin.” This obligation actually extends beyond the unit itself to include the “building, grounds, appurtenances, and all other areas under the landlord’s control…” For this reason, fees for pest control services charged to tenants initially appeared to be prohibited by SB 381 and on the basis that a landlord had a “pre-existing statutory duty” to maintain the dwelling unit free of pests. However, it should be noted that this is a limited obligation only applicable at the time of “commencement of the tenancy” pursuant to existing law. If the dwelling unit and premises are provided “reasonably free of pests” when the tenant moves in, then future charges for pest control should not be prohibited by SB 381.
CAM Fees
Some landlords, specifically those managing multifamily communities, charge Common Area Maintenance (CAM) fees and use them for various purposes. When evaluating whether CAM fees are prohibited by SB 381, landlords should be aware of what fees and costs their CAM fees are actually covering. If a CAM fee is utilized to maintain aspects of the dwelling unit in a habitable condition, the fee would likely be prohibited by SB 381. This includes application of CAM fees towards insurance copays or deductibles in response to a loss, and home warranty or service contracts for things that attribute to a unit’s habitability. To the extent that a CAM fee is not utilized to maintain the habitability of a unit, the fee would likely fall outside of SB 381 and be allowed.
Whether a CAM fee is permissible pursuant to SB 381 will largely depend on the language of the lease authorizing the fee – and, regardless of the language, how the fee is actually applied by the landlord. The language describing CAM fees and their stated purposes varies from lease to lease. If landlords are currently charging CAM fees, they should consult with their legal counsel regarding possible lease revisions and/or policy changes.
