Lombardo signs probate bill after Review-Journal investigation

Gov. Joe Lombardo has signed a bill that changes Nevada probate law, after the Las Vegas Review-Journal found that outsiders cashed in on dead people’s homes for years but often didn’t make a dime for heirs.

The governor last Thursday approved Senate Bill 404, which adds steps needed to take over a dead person’s estate and limits who can obtain court authority to sell homes through a faster process in probate court.

The law takes effect Oct. 1.

A Review-Journal investigation published last year found a group of private administrators, real estate agents, lawyers and house flippers had reaped paydays selling dead people’s homes across Southern Nevada for years, through probate cases that routinely started without family participation.

Under Nevada law, virtually anyone could manage a probate case — even if they had no connection to the deceased — and sell the dead person’s home with limited court oversight, the newspaper found.

The Senate Judiciary Committee introduced the bill in March to address the issue, and the Senate and Assembly both unanimously approved it.

‘Prevent that from happening in the future’

Sen. Melanie Scheible, D-Las Vegas, chair of the Judiciary Committee, previously said she really wasn’t aware of the issues in probate court until she read the Review-Journal’s coverage.

Scheible said Tuesday that she was very pleased to see the bill become law. She said she learned about it on Monday after Lombardo’s approval was posted to the bill’s tracking history online.

Throughout the process, she heard from people who didn’t have the types of troubling experiences that others went through, as reported by the Review-Journal, but they could relate to the notion that they would only want family to oversee a relative’s estate, Scheible said.

She also heard from an attorney who, as the senator recalled, had to regain control of an estate for their client after someone else had taken charge.

According to Scheible, legislators worked on the bill so people don’t end up in that situation.

“I think this will prevent that from happening in the future,” Scheible said.

New rules

Probate cases involve transferring ownership of a dead person’s property through court and settling their debts. Family members have top priority in Nevada to manage the case, but last on the list in state law is anyone “legally qualified” for the task.

It’s a low bar, as any adult in Nevada can run a probate case if they are not a convicted felon, the Review-Journal found. Would-be administrators also could be blocked over a conflict of interest, “drunkenness” or “lack of integrity,” state law says.

The final approved version of SB404 requires anyone who is just legally qualified to now obtain a “finding of good cause” that “must be based on evidence,” including a statement of qualifications and an affidavit of due diligence to find any living heir.

It also limits who can obtain court authority for “independent administration.”

This provision of probate law lets an administrator sell a dead person’s home without a judge’s approval or competitive bidding through court that could boost the price, lawyers have said.

SB404 excludes multiple categories of administrators from being able to secure this authority, including those who are just legally qualified to oversee a case.

As Scheible described it, independent administration is now basically restricted to family members.

‘Vague requirement’

The Review-Journal found that two of Southern Nevada’s most prolific private administrators of the past decade, Thomas G. Moore and his probate successor Cynthia “Cyndi” Sauerland, were involved with at least 500 probate cases combined in Clark County District Court.

They sought independent administration virtually every time, and the court routinely granted it.

They also frequently started cases without family participation and often sold homes to a small circle of repeat buyers who flipped the properties for a higher price, the newspaper found.

Moore, Sauerland and their associate Adam Fenn of Compass Realty &Management have said they were finding buyers for abandoned homes that can be taken over by squatters, fall into disrepair and become a neighborhood nuisance.

In a letter of opposition to SB404, Fenn argued the measure sought to impose “an ambiguous regulation” based on a “false narrative” from the media, among others.

He objected to the “vague requirement” for a statement of qualifications, saying this lacked “clear, defined standards.”

“This ambiguity invites inconsistent application and could arbitrarily target and disqualify professionals who have a long record of effective, lawful service in this space,” Fenn wrote.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.