Tenants


ImageThis is an update to May 26, 2009 Eviction of Tenants In the Event of Foreclosure.

 “Helping Families Save Their Homes Act May 20, 2009” (S. 896) has been extended by the Dodd-Frank Act (Pub. L. 111–203, approved July 21, 2010) to December 31, 2014.

To fall under the Act, a bona fide lease (defined below) must be entered into prior to the date of the notice of foreclosure, which is defined as ‘‘the date on which complete title to a property has been transferred to a successor entity or person as a result of an order of a court or pursuant to the provisions in a mortgage, deed of trust, or security deed.’’  In other words AFTER the foreclosure?  So it appears you can enter into a bona fide lease the day before the trustee sale? That is not advisable.

A bona fide lease is one in which: (1) The mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant; (2) the lease or tenancy was the result of an arms-length transaction; and (3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit’s rent is reduced or subsidized due to a federal, state, or local subsidy.

The entire notice can be found by clicking here.  Go to page 15379.  Also I found this three page manual from the Comptroller of the Currency Administrator of National Banks  click here ——> here.

If the Federal law expires in 2014 we have NRS 40 in Nevada  what is known as the form NOTICE TO TENANTS OF THE PROPERTY,  in this statute tenants now get a minium of 60 days to vacate.

There is a helpful Renters in Foreclosure Toolkit  from The National Low Income Housing Coalition.

Questions:  darren@dwelshlaw.com

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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.

foreclosure_eviction “Helping Families Save Their Homes Act May 20, 2009” (S. 896)

Effective May 20, 2009 federal legislation establishes protections for renters living in foreclosed homes.  Effective October 1, 2009, Nevada state law also protects tenants that have been foreclosed upon.  In the event of foreclosure, existing bona fide leases for renters are honored, except in the case of month-to-month leases or owner occupants foreclosing in which case a minimum of 90 days notice will be required.  This is a major change from normal Landlord Tenant law in Nevada per NRS 118A and NRS 40.  It appears that the Tenant would need to still pay rent and otherwise remain in good standing, otherwise normal eviction for nonpayment/nuisance would ensue per state law.  Also, if the Tenant desires this protection, I suggest the Tenant produce their lease agreement, as soon as they can, to the lender that has foreclosed.

A lease is bona fide only if:

(1)   the mortgagor under the contract is not the tenant;

(2)   the lease or tenancy was the result of an arms-length transaction; or

(3)   the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property.

The actual law is here.

Forms for eviction in Clark County  are here.

Unlike the House version (H.R. 1106) it does not contain cramdown — a provision empowering bankruptcy judges to reduce principals and interest rates for homeowners in bankruptcy.

There is a helpful Renters in Foreclosure Toolkit  from The National Low Income Housing Coalition.

The Nevada October 1, 2009 NRS 40 will also further protect tenants under what is known as the form NOTICE TO TENANTS OF THE PROPERTYin this new statute tenants now get a minium of 60 days to vacate.

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.