Two New Laws Nevada Residential Landlords Must Know

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Snell & WilmerTemporary Residential Eviction Process Changes

Since the beginning of the COVID-19 pandemic, the federal government and Nevada’s Governor have used a series of agency orders and emergency directives to halt residential evictions. Nevada’s eviction moratorium ended on May 31, 2021, at 11:59 p.m., with the Centers for Disease Control and Prevention’s (“CDC”) eviction moratorium set to expire on July 1, 2021. In response to the expiration of eviction moratoriums, and with estimates that between 135,000 to 142,000 Nevada households face potential evictions for nonpayment of rent, Nevada’s legislators passed Assembly Bill 486 in an effort to assist tenants facing evictions for nonpayment of rent and to help landlords quickly access COVID-19 rental relief funds.

Mandatory stay of eviction proceedings

Under AB 486, which became effective on June 4, 2021, “designated eviction proceedings” are to be stayed for 30 days to facilitate a program of alternative dispute resolution. “Designated eviction proceedings” cover residential tenants who have defaulted on their rent obligations under certain conditions. It is anticipated that the alternative dispute resolution process, or eviction mediation, will largely mirror Nevada’s existing foreclosure mediation process.

A new affirmative defense

Residential tenants in “designated eviction proceedings” may also have a new affirmative defense available to them if they can claim that: (1) they have a pending application for rental assistance or (2) their landlord has either failed to participate in the application process for rental assistance or declined to accept rental assistance secured on behalf of the tenant.

If a tenant asserts this affirmative defense, the court may be required to stay eviction proceedings until: (1) the matter is referred to mediation; (2) a determination is made on the tenant’s application for rental assistance; or (3) the tenant can prove that the landlord either failed to participate in the rental assistance process or declined to accept rental assistance. If a tenant’s application for rental assistance is granted, the court can dismiss the eviction proceeding when the landlord receives the rental assistance. If a tenant proves a landlord failed to participate in any rental assistance program, the court can deny the eviction and may award damages to the tenant.

Landlord motion practice in designated eviction proceedings

Landlords generally have two options to file a motion under this new law. The first option permits a landlord to file a motion to rebut the new affirmative defense explained above. If a landlord files this motion, the court may either refer the eviction proceeding to mediation, schedule a hearing on the motion, or maintain the stay. The second motion allows a landlord to seek an exemption from the new stay requirement under very specific circumstances. To successfully move for exemption under the stay requirement, landlords generally must provide written notice to the tenant of the exemption at the same time they serve notice of a designated eviction proceeding. This suggests that landlords should anticipate a potential objection on this basis before filing for an eviction. The motion also should contain evidence that the landlord faces a “realistic threat” of foreclosure of their property if they cannot evict the tenant. Under these conditions, the court may exempt landlords from the mandatory stay requirement.

Wrongful eviction after receiving rental assistance

If a landlord accepts rental assistance on behalf of a tenant, the new law provides that the landlord may not evict that tenant, or even pursue eviction proceedings, for any reason that existed during the period that the rental assistance covers. If a landlord violates this provision, both the tenant and the government entity administering the rental assistance program can file a claim for wrongful eviction against the landlord, which carries civil penalties and potential attorneys’ fees and costs. The government may also seek damages equal to the amount of rental assistance the landlord accepted on behalf of its tenant.

Notice requirements for designated eviction proceedings

Landlords are also subject to additional notice provisions under AB 386. In addition to all existing notice requirements for residential evictions, landlords generally must now include information related to the availability of rental assistance and the procedures outlined above. A failure to provide the added notices may result in dismissal of a designated eviction proceeding and/or civil liability.

Residential landlords should exercise caution when considering whether to pursue eviction proceedings for nonpayment of rent under this new law. If you are a residential landlord, you should consider speaking with legal counsel prior to filing any eviction proceeding to ensure you do not incur unnecessary liability.

Changes to Late Fees and Notice Periods for Rent Increases

Assembly Bill 308 makes several substantive changes to Nevada’s Landlord and Tenant laws that are effective July 1, 2021. Residential landlords in Nevada may want to seriously consider reviewing and/or amending their rental agreements and business practices now to adjust to upcoming changes.

Change #1: Extended period for charging late fees for tenancies longer than week to week

AB 308 added language to NRS 118A.210 that limits landlords’ ability to collect a late fee after the date rent is due. Under Nevada’s prior law, landlords could assess late fees for payment of rent at any time after the rent payment was due and remained unpaid as long as a rental agreement expressly provided the late fee provision. Now, landlords cannot charge or impose a late fee until at least three calendar days after the date rent is due as set forth in a rental agreement for any tenancy that is longer than week to week.

Change #2: Rent increases are subject to extended notice periods

AB 308 also amends the mandatory written notice period to increase the rent payable by a tenant. Nevada’s current written notice periods are 45 days or, if a periodic tenancy is less than one month, 15 days prior to the first rental payment subject to any rent increase. In a few weeks, landlords will be subject to extended written notice periods for increases in rent: periodic tenancies of one month or longer will be subject to a 60-day notice period, and periodic tenancies less than one month will be subject to a 30-day notice period.

Landlords should consider seeking legal advice regarding their business practices and rental agreements to conform to these changes.

Footnotes:

  1. See e.g. FHA-back Eviction and Foreclosure Moratorium, available at: https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee; CDC and HHS Eviction Moratoriums, available at: https://www.federalregister.gov/documents/2020/09/04/2020-19654/temporary-halt-in-residential-evictions-to-prevent-the-further-spread-of-covid-19.
  2. See Nevada Declaration of Emergency Directive 43, available at: https://nvhealthresponse.nv.gov/wp-content/uploads/2021/03/Declaration-of-Emergency-Directive-043.pdf.
  3. See CDC Eviction Moratorium Extension, available at: https://www.cdc.gov/coronavirus/2019-ncov/more/pdf/CDC-Eviction-Moratorium-03292021.pdf.
  4. See Legislative Testimony, SB 1, Nevada’s 32nd Special Session, available at: https://www.leg.state.nv.us/App/NELIS/REL/32nd2020Special/Bill/7139/Exhibits.
  5. AB 486 does not apply to commercial evictions, residential evictions for unlawful detainer actions for unlawful assignments or subletting, or unlawful detainer actions stemming from waste, unlawful business activities, nuisances, or drug use.
  6. See Nevada’s CARES Housing Assistance Program, available at: https://housing.nv.gov/Resources/COVID-19/Renter_Assistance/.
  7. Found in Nevada Revised Statutes (“NRS”), Chapter 118A, available at: https://www.leg.state.nv.us/nrs/nrs-118a.html.
  8. See NRS 118A.210.
  9. See NRS 118A.300.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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