Renter retains deposit in foreclosed property


Q: Hi. I read your weekly column and have a question you may be able to answer. I signed a one-year lease and now the house I live in is in foreclosure.

What are my rights as a renter? How can I get my deposit refunded, and how should I interact with the Realtors who are giving me conflicting information? Thank you for any information you can provide. -- Megan L., Henderson

A: That is a question that I have received many times over the last few months, especially because foreclosures in the Las Vegas Valley - and across the country - have been increasing.

For part of the answer, I went to Linda Rheinberger. She is the past president of the Greater Las Vegas Association of Realtors (GLVAR), owner and broker of One Source Realty and Investments, and is a permitted property manager here in Nevada. Here is what she said:

"Do you know for sure that the home will end up being foreclosed? In some cases, the owner/landlord is able to work with the lender to avoid this unfortunate situation. However, in the event that the home is foreclosed upon, the last step taken by the bank will be a legal notice provided not only to the owner, but to all occupants of the home, so that the property becomes vacant.

"Should this occur, I would contact the Realtor who is managing the property. This person must hold a specialized real estate license, which includes a property manager permit. They are governed by the Nevada Real Estate Division (part of the state Department of Business and Industry) and must hold all client and customer funds in specified trust accounts. So the good news is that your deposit is not at risk of being lost.

"Once the property is foreclosed upon, the owner/landlord no longer has rights to the property, and therefore a tenant's deposit is no longer considered a conditional deposit (refundable except in the event of a breach of contract). The professional property manager is now free to refund the deposit to the tenant, without violating their fiduciary responsibility to their (former) client, the landlord."

One more bit of advice comes from GLVAR legal counsel Deanne M. Rymarowicz. She said renters should also know that "Nevada law provides 30 days from the termination of tenancy for a landlord to return a security deposit to a tenant, with a written itemization of any deductions from the deposit. It is essential for the tenant to let the landlord or property manager know where to send the itemization and deposit. If the deposit is not returned within 30 days of termination, then the tenant has certain rights under Nevada law, and should contact an attorney or Nevada Legal Services."

I hope this helps you and anyone else who may be in the same situation. Remember to do your homework up front, making sure those managing the property are honest and reputable. If so, you will have a much easier time dealing with them throughout the lease and especially should any such complications arise.

Devin Reiss is the president of the Greater Las Vegas Association of Realtors (GLVAR) and has worked in the real estate market for more than a decade. GLVAR has more than 17,500 members. To ask Reiss a question, e-mail him at ask@glvar.org. For more information, visit lasvegasrealtor.com.

 

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