Property Management


Scotland 2013

Scotland 2013

Recently the Nevada State Contractor’s Board and real estate agents in Nevada have debated whether or not a real estate broker can ‘order’ a repair of a part of real property during a listing period. If that order is in the name of the agent is that agent performing duties of a licensed contractor? This is NRS 645 vs. NRS 624. My position was that such a task is in line with the servicing of a listing and should be exempt from the control of the Nevada State Contractor’s Board as falls under the licensed activities of NRS 645.030.

NRS 624 has been modified…and upon its signing by the Governor of Nevada very soon, the is now clear that such activity by a real estate agent is exempt, provided the work does not require a building permit and does not exceed $10,000.

Below is the relevant text – or you can read it the entire AB334  here http://www.leg.state.nv.us/session/77th2013/reports/history.cfm?id=758

 11. A person licensed as a real estate broker, real estate broker-salesperson or real estate salesperson pursuant to chapter 645 of NRS who, acting within the scope of the license or a permit to engage in property management issued pursuant to NRS 645.6052, assists a client in scheduling work to repair or maintain residential property pursuant to a written brokerage agreement or a property management agreement. Such assistance includes, without limitation, assisting a client in the hiring of any number of licensed contractors to perform the work. Nothing in this subsection authorizes the performance of any work for which a license is required pursuant to this chapter by a person who is not licensed pursuant to this chapter or the payment of any additional compensation to a person licensed as a real estate broker, real estate broker-salesperson or real estate salesperson for assisting a client in scheduling the work. The provisions of this subsection apply only if a building permit is not required to perform the work and if the value of the work does not exceed $10,000 per residential property during the fixed term of the written brokerage agreement, if the assistance is provided pursuant to such an agreement, or during a period not to exceed 6 months if the assistance is provided pursuant to a property management

agreement. As used in this subsection:

 (a) “Brokerage agreement” has the meaning ascribed to it in NRS 645.005.

 (b) “Property management agreement” has the meaning ascribed to it in NRS 645.0192.

 (c) “Real estate broker” has the meaning ascribed to it in NRS 645.030.

 (d) “Real estate broker-salesperson” has the meaning ascribed to it in NRS 645.035.

 (e) “Real estate salesperson” has the meaning ascribed to it in NRS 645.040.

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 The Chirper and the New Clark County Code; Abatement of Public Nuisance

Effective June 1, 2010 Clark County Code was modified to address Nuisance and Abatement of problem Chirper[i] homes. This will affect you if you are working with short sales or REOs that are in serious disrepair upon your taking the listing.  Dave Pollex, Supervisor County Code Enforcement, 702 455 4509 explains that the key is communication.  The County is not getting timely and proper responses to the notices of violations, so the Code 11.06.070 attached here as a PDF was modified.  The cite for the code is here but it is not up to date yet.  The codes allows instant civil penalties up to $1,000 per day levied against the property.  A fine levied in this manner is similar to a tax and does not get removed in the event of foreclosure. 

Post Your Information.  When you take an REO listing the County suggests that you immediate place inside a window that can be seen from the street a sheet of paper [attached notice] that indicates you are the listing agent and your contact information.  It should be readable from the sidewalk if at all possible.

Notices.  Likely before fines are levied the County will contact you and demand that certain repairs are made.  This is why you want the contact information provided timely.  The County reports that they will first work with the salesperson on a time frame to get the items completed before they issue a citation.  Communication is important.  If, for example, your lender is very slow to approve repairs the County should be made aware of this.  The County can then make note of pending action on your part and even inform neighbors if further complaints are received.  Notices levied against property will have the direct contact information on the Notice for the assigned enforcement agent and describe the appeal process.

Priority Lien.  The fines that Clark County Code 11.06.07 can produce are Priority Tax Liens.  That means if they are present prior to a foreclosure, they do not get whipped away, rather they stay recorded against the property and will need to be paid.  It is important to look for these on preliminary title reports if you take an REO that was a Chirper for long time.


[i] “Chirper.” (c̸hʉrp -ûr) Noun. Slang. Described vacant home that chirps from within due to the home’s smoke detectors warning they need new batteries.  The larger the house, the more the smoke detectors.  If you get up to 3,000 square feet a melody can result, chirp ….ch chirp, chirp chirp from inside as the various detectors chirp.

tenantlawThis is a follow up to Rental Restrictions within an Association.

 

As you know many associations were adding rental restrictions and affecting the rights of Unit owners after the close of escrow.

Click on the dated that it is effective for a reading: October 1, 2009, NRS 116.  A summary of the modifications are: 

Rental Restrictions Cannot Be Added After Purchase of Unit:

The modified rule is now if at the time you purchased your unit there is NOT a restriction on rental; it cannot be restricted in such a manner.  Similarly, if a restriction to ask for approval to rent is not in place at the time of the purchase of a Unit, the rule to ask for approval cannot later be placed on the Unit.

Restrictions May be Waived by Board

If your Unit has such a restriction, the owner may by law, “may seek a waiver of the prohibition from the executive board based upon a showing of economic hardship, and the executive board may grant such a waiver and approve the renting or leasing of the unit.”  This allows the Board to approve a rental, above the maximum, by law, without necessarily violating the Declarations.

The Calculations of Number of Rental Units Shall Not Include Owner Inquiring

And finally, “if the declaration contains a provision establishing a maximum number or percentage of units in the common-interest community which may be rented or leased, in determining the maximum number or percentage of units in the common-interest community which may be rented or leased, the number of units owned by the declarant must not be counted or considered.”  What?  I think it means that if the current number of units already rented is the maximum but if you own a unit, you may still rent, as you may calculate the percentages and exclude your unit(s) in the calculation.  So when calculating the person seeking to rent may count all of their rentals as one (1) unit.

 

Can an association limit the amount of rentals in an association? Yes and No.  The Covenants, Conditions and Restrictions (CC&Rs) also know as a ‘declaration’ within an association can limit many things.  Limiting the amount of rentals is certainly an option.  Any subject matter that is not protected can be limited.  For example, it is not allowed to restrict family status, nor race, creed, color, etc. 

 

The question, however, is if the restriction was in place at the time of the recording of the CC&Rs.  A recent example that I was asked about was a ‘modification’ to the CC&Rs to limit rental use which was imposed by a Board of Directors. This is not allowed.  A modification of a restriction which limits the “use” of a property must be passed by the “unanimous consent of the owners affected.”  NRS 116.2117.

 

If your client is dealing with an association that limits the amount of renters, have your client do some research.  The client should contact the association and ask, “Which is the restriction that limits rental use? When was it created? If it was an amendment did it comply with NRS 116.2117 by gaining a unanimous consent of those properties affected? 

 

Note:  Even if the CC&Rs declare that a percentage of affected owners less than 100% is required to pass such an amendment, there is an argument that the statute trumps and 100% is still required.

del-mar-sunsetCan a Tenant record a document with the County Recorder so that they are notified if the rental enters foreclosure?  The statute states, any person who has or claims any right in, the property described in the deed of trust can record a Request for notice of default.  Does a Tenant any have a ‘right’ in the property?  They hold a lease hold interest, so it appears that is a ‘right.’

 What would this form look like?  Probably something like this Request For Notice Of Default. The information of the date the deed of trust and the book and page it was recorded in is required.  This is not easy information to find for the average citizen.  It can be located at the Clark County Recorder Search Page but you must know the title holders name, which can be found at the Clark County Assessor’s Search Page

This is not a normal process; most requests for defaults are from other secured lenders.  But we are in a new era.

REMEMBER if you ever wanted to simply know if a home is in default you can search the Clark County Recorder Search Page under the borrower’s last and first name (use Clark County Assessor’s Search Page if you don’t know) and you can find if a Notice of Default has been recorded.

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I received a call on how a sales person’s buyer’s deposit gets returned from the buyer’s landlord.  Deposits can be confusing.

When a Rental is Sold and the Tenant Remains.

If the sale is of a property that is leased, the landlord (seller) must either return the deposit to the current tenant or inform the tenant that the new landlord (buyer of investment property) is now in possession of the deposit.  The tenant must be informed of the name, address and telephone number of the new owner. [NRS118ASec244]

When Your Buyer is Requesting Deposit from Their Landlord. 

If your client is a tenant that just vacated and is asking you how she can get her deposit back, the rules are as follows. The landlord must provide an itemized 30 day statement to the tenant within 30 days after the end of a tenancy.  Here is an example [FORM].  This must be received by the tenant not later than 30 days after the tenant has surrendered the keys/terminated the tenancy.  Within this form the landlord can deduct those reasonable costs of damages affecting the rental property that are beyond normal wear.  [NRS118ASec242]  That is a phrase that is easier said than done.

 As 1964, Supreme Court Justice Potter Stewart once said, ‘I know it when I see it…’  Mere scuffs and the need to paint to help a place look brighter is not beyond normal wear, and not the tenant’s cost, but holes and stains and broken items typically are deducted as would any outstanding charges for rent.  Once the landlord serves the itemized statement, “by handing it to him personally at the place where the rent is paid, or by mailing it to him at his present address; or if that address is unknown, at the tenant’s last known address,” which can mean the very rental location. The only recourse for the tenant is a legal claim.  If the deposit is less than $5,000 the jurisdiction is within the small claims system.  Depending where the property is located; Henderson, Las Vegas (including County), or North Las Vegas, the tenant can file a small claims action to address any alleged improper holding of deposits.

Recently a question came up where a buyer terminated their lease early so that they could purchase their own home.  This is not however a valid reason to breach a lease.  Nor is the selling of a property a valid reason to terminate a lease if you are the owner of a rental property.  Leases, “run with the land.” which means that subsequent owners are restricted by the contract.  If the Seller or Tenant would like to end the lease early they should contact the other party and attempt to work out a lease termination or modification.

Secirty deposits are not accessible by creditors of tenants [Nevada Supreme Court Opinion] and the claim of a tenant to security to which he is entitled under Nevada landlord tenant law takes precedence over the claim of any creditor of the landlord. (NRS 118A.242(6)).

Some of you hold real estate rental properties and lease to tenants. I have been asked if there was a recent change concerning tenants of 60 years of age or older, or for those with a physical or mental disability. Yes, there has been a change. NRS 118A.340[1] has been modified. The following phrase must be included with 30 Day Notices.[2]

If a tenant with a periodic tenancy other than a tenancy from week to week, is 60 years of age or older or has a physical or mental disability, the tenant may request to be allowed to continue in possession for an additional 30 days beyond the time specified herein by submitting a written request for an extended period and providing proof of his age or disability.

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[1] http://www.leg.state.nv.us/nrs/NRS-118A.html#NRS118ASec340

[2] 30daynot.doc