Dealing With REO as “Asset Managers” in Nevada, as of October 1, 2011.

SB 314

http://www.leg.state.nv.us/Session/76th2011/Bills/SB/SB314_EN.pdf

For those salespersons that have REO clients, this new statute is fun. Look for a Nevada Real Estate Division update very soon.  Here is a sneak preview.

Short Version, to get ahead of the curb get your property management certificate by attending this coursehttp://americanaacademy.com/Default.aspx?pageId=1141702  A list of all schools that provide property management certificate is located here http://red.state.nv.us/forms/502.pdf.  That should render you exempt from most of these new rules.  But as I say above, stay tuned, the real direction from the NRED is on the way.

Long Version, Let’s discuss…

1.) what is an asset manager?

2.) why you should get your Property Management Permit,

3.) what you can and cannot do for your clients? and

4.) the guidance on how to handle abandoned personal property.

What is an Asset Manager and does it apply to me?

An “Asset management company” means a person, for compensation and pursuant to a contractual agreement,
engages in asset management on behalf of a bank.

An “Asset manager” means a person engaged in the business of asset management who is an independent contractor of an asset
management company.

“Asset management” means oversee or direct actions (preserve, restore or improve the value and to lessen the risk of damage to the property) taken to maintain real property on behalf of a client before or in preparation for sale of real property owned by the client pursuant to a foreclosure sale. (This definition would also include any person that buys at a trustee sale, but the definition of client singles out only banks.  Therefore listing homes for trustee sale flippers would not appear to be asset management.)

The statute does not apply to a person or broker who has a current permit to engage in property management pursuant to chapter
645 of NRS.  However, to be exempt the provisions concerning asset management services (see definition above) must be
included in the property management agreement entered into pursuant to NRS 645.6056.  Application will still be required, a fee, etc., reporting and mandatory errors and omissions insurance requirements.

Therefore, if you are directing actions to preserve, restore or improve the value and to lessen the risk of damage to the property which is owned by a client pursuant to a foreclosure sale, you apparently are “asset managing.”

What am I allowed to do?

As an asset manager you are allowed to perform the following on foreclosed properties. (Although the rule says in foreclosure
and it defines “in foreclosure” correctly. Obviously, they meant “after foreclosure” as the lender has no rights to
entre the property until the completed foreclosure sale.  So we will ignore that issue.)

  1. Securing real property in foreclosure once it has been determined to be abandoned and all notice provisions required by law have been complied with;  Providing maintenance for real property, including
    landscape and pool maintenance;
  2. Cleaning the interior or exterior of real property;
  3. Providing repair or improvements for real property;
  4. Removing trash and debris from real property and the surrounding property.
  5. Dispose of personal property abandoned on the premises of a residence in foreclosure or left on the premises after the
    eviction of a homeowner or a tenant of a homeowner only in the following manner:

30 Days – You shall provide a safe storage of the property for 30 days.  You are liable for your negligence
in storing the property.

Disposal – 14 days Notice.  Prior to disposal you must notify the homeowner/tenant in writing of your intention
to dispose of the property and allow 14 days to elapse. It must be mailed to the homeowner/tenant at the present address of the homeowner/tenant and, if that address is unknown, then at the last known address.  After the expiration of the 30-day period, you may dispose of the property.

  • Vehicles must be disposed of in the manner provided in chapter 487 of NRS for abandoned vehicles.

 

What am I not allowed to do?

As an asset manager you are not allowed to perform on foreclosed properties

  1. Evict a real property owner or a tenant of a real property owner until after the time during which the real property owner
    may redeem the real property in foreclosure.
  2. Perform any repair, maintenance or renovation on the real property in foreclosure:* Which is required to be performed by a person holding a license unless such repair, maintenance or renovation is done by a person licensed in this State to perform such repair, maintenance or renovation; or

    * Which requires a permit or inspection by any governmental entity in this State, unless the permit is first obtained and the inspection is performed after completion.

    * Receive, collect, hold or manage any money which belongs to another person, including, without limitation.

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