Bills pertain to foreclosure issues

EDITOR'S NOTE: Barbara Holland is taking a break in the Q. & A. format of this column to discuss bills AB 140 and AB 149 that pertain to foreclosures.

Anyone living within an association knows many of the frustrations that have developed as a result of the endless foreclosures here in Nevada. These laws address some very important issues.

Most of the changes are not found in NRS 116 but are found in other sections of the Nevada revised statutes. One of the problems that have confronted boards and management companies is the difficulty in finding out who was the authorized person to provide information relating to the foreclosure sale of the property. Section 2 of AB 140 requires specific notice that must include the authorized person who can be contacted by the association or by the management company.

In addition, separate notice must be posted in a conspicuous place on the property as well as giving notice to the tenant.

Section 1 of AB 149 established more restrictions on the trustee's power to sell, with respect to the owner-occupant. It is more commonly known as the bill that requires mediation under certain circumstances prior to completing a foreclosure action.

The notice to the tenant must also inform the tenant of his or her options and the options of the landlord or of the new owner as to the possible termination of his or her lease or the possible eviction under Chapter 40. AB 140 actually spells out just exactly what the notice to the tenant will state. The state law would require a 60-day notice to vacate by the tenant prior to an eviction.

(This part of the state law is superseded by the federal regulation of 90-day notice prior to eviction of a bona fide tenant -- signed by President Barrack Obama S.896, P.L. 111-22 May 20, 2009, can be found on http://www.nlihc.org/doc/701-704-Public-Law-111-22.pdf).

To clarify, the 2009 Nevada State Legislature's bill gives the tenant a period of 60 days after the notice of the change of ownership to vacate the premises and also prevents the sheriff from conducting a sale of the property if a person who is entitled to be notified was not properly notified and allows the lender to offer cash for the keys to the tenants to vacate sooner from the property.

Because federal law supersedes state law, the federal law requires the person or entity that acquires the title at foreclosure to provide bona-fide tenants with a 90-day notice prior to eviction or allow the bona fide tenant to occupy the property until the expiration of the lease term, except the lease can be terminated on 90-day notice if the unit is sold to a purchaser who will occupy the property. The other major difference is that the federal renter protection provisions expire at the end of 2012. The state law does not have an expiration date.

NRS 40.430 states that any vacant residential property purchased or acquired by a person at a foreclosure sale must be maintained by that person. The purchaser shall care for the exterior of the property, without limitation to include, excessive growth of foliage, mosquito larvae growing in standard water or any other condition that creates a public nuisance.

What makes this law different from AB 249 and AB 361 is that the applicable governmental agency can site the property owner. It will become a civil penalty. The property owner will be first given 14 days (after the date of the receipt) to act to correct the violation within 30 days. The property owner would have five days after a notice is sent to him or her to contest the allegation. This section of the new law would allow the applicable governmental agency to impose a civil penalty of not more than $1,000 per day.

(AB 361 would create a super lien against the property owner if the association were to correct the violations of its governing documents and the maintaining of the property owner's unit.)

Section 5 of AB 140 states that the new owner has the rights, obligations and liabilities of the previous owner or landlord under NRS 118A (tenant/landlord laws) and the tenant or subtenant has the same rights, obligations and liabilities under NRS 118A. The tenant is to received a notice from the new owner, which includes a statement that says if the tenant does not pay the new owner the rental fee, the tenant can be evicted. This section allows the new owner (if the property has been sold as a residential foreclosure) to negotiate a new purchase, lease or rental agreement with the tenant or subtenant or to offer a payment in exchange for the tenant or subtenant to vacate the property on an earlier date than the end of the specified period.

Section 9 of the law amends NRS 118A, stating that a landlord shall disclose in writing to a prospective tenant if the property is the subject of any foreclosure proceedings. If the landlord does not disclose this information, the new law states that such action constitutes a deceptive trade practice for the purpose of NRS 598.0903 to 598.0999, inclusive.

Barbara Holland, certified property manager, is president and owner of H&L Realty and Management Co. To ask her a question, e-mail support@hlrealty.com.