Nevada Legislative Update

Nevada Legislative Update

The Nevada legislature recently enacted legislation governing abandoned residential property and expedited foreclosure and amended its foreclosure laws effective July 1, 2013.

 

NEVADA SENATE BILL 278

 

“Abandoned residential property” means residential real property:

  • Consisting of not more than four family dwelling units or a single-family residential unit, including, without limitation, a condominium, townhouse or home within a subdivision, if the unit is sold, leased or otherwise conveyed unit by unit, regardless of whether the unit is part of a larger building or parcel that consists of more than four units; and
  • That the borrower or the successor in interest of the borrower has surrendered as evidenced by a document signed by the borrower or successor confirming the surrender or by the delivery of the keys to the property to the lender or that satisfies the following conditions:
    • The residential real property is not currently occupied as a principal residence by the borrower of the deed of trust, the person who holds title of record or any lawful occupant;
    • The obligation secured by the deed of trust is in default and the deficiency in performance or payment has not been cured;
    • The gas, electric, and water utility services to the residential real property have been terminated;
    • It appears, after reasonable inquiry, that there are no children enrolled in school residing at the address of the residential real property;
    • Payments according to the federal Social Security Act, including, without limitation, retirement and survivors’ benefits, supplemental security income benefits and disability insurance benefits, payments for unemployment compensation or payments for public assistance are not currently being delivered, electronically or otherwise, to a person who has registered the address of the residential real property as his or her residence with the agency making the payment;
    • An owner of the residential real property is not presently serving in the Armed Forces of the United States, a reserve component of it, or the National Guard; and
    • Two or more of the following conditions exist:
      • Construction was initiated on the residential real property and was discontinued before completion, leaving a building unsuitable for occupancy, and no construction has taken place for at least 6 months;
      • Multiple windows on the residential real property are boarded up or closed off or are smashed through, broken off or unhinged, or multiple window panes are broken and unrepaired;
      • Doors on the residential real property are smashed through, broken off, unhinged, or continuously unlocked;
      • The residential real property has been stripped of copper or other materials, or interior fixtures to the property have been removed;
      • Law enforcement officials have received at least one report of trespassing or vandalism or other illegal acts being committed at the residential real property within the immediately preceding 6 months;
      • The residential real property has been declared unfit for occupancy and ordered to remain vacant and unoccupied under an order issued by a municipal or county authority or a court of competent jurisdiction;
      • The local police, fire or code enforcement authority has requested that the owner or any other interested or authorized party secure the residential real property because the local authority has declared the property to be an imminent danger to the health, safety and welfare of the public; or
      • The residential real property is open and unprotected and in reasonable danger of significant damage resulting from exposure to the elements or vandalism.

 

“Abandoned residential property” does not include residential real property if:

  • There is construction, renovation, or rehabilitation on the residential real property that is proceeding diligently to completion, and any building being constructed, renovated, or rehabilitated on the property is in substantial compliance with all applicable ordinances, codes, regulations, and laws;
  • The residential real property is occupied on a seasonal basis, but is otherwise secure;
  • There are bona fide rental or sale signs on the residential real property, or the property is listed on a Multiple Listing Service, and the property is secure; or
  • The residential real property is secure but is the subject of a probate action, action to quiet title, or any other ownership dispute.

 

A board of county commissioners or the governing body of an incorporated city may establish by ordinance:

  • A registry of abandoned residential property that contains information concerning abandoned residential property located in the county or city; or
  • A registry of residential property located in the county or city that may be in danger of becoming abandoned residential property.

 

If a lender, the successor in interest of the lender, or the trustee includes with a recorded notice of default and election to sell the affidavit and certification described below and the county or city in which the abandoned residential property is located has established a registry of abandoned residential property, the lender or its successor in interest or the trustee must submit a copy of the affidavit and certification to the entity maintaining the registry for the county or city in which the abandoned residential property is located.

 

 

If a lender, the successor in interest of the lender, or the trustee receives a copy of the affidavit described below, the lender or its successor in interest or the trustee must notify the entity maintaining the registry for the county or city in which the property described in the affidavit is located.  Upon receiving such a notification, the entity maintaining the registry must remove the property from the registry.

 

 

If a property which has been removed from a registry subsequently becomes abandoned residential property or in danger of becoming abandoned residential property, the property may be added to the applicable registry in accordance with the provisions discussed in this memorandum or the requirements established for the registry by the board of county commissioners or the governing body of an incorporated city.

 

 

A lender may elect to use an expedited procedure for the exercise of the trustee’s power of sale if, after an investigation, the lender:

  • Determines that real property is abandoned residential property; and
  • Receives from the applicable governmental entity a certification that the real property is abandoned residential property.

 

Each board of county commissioners of a county and each governing body of an incorporated city will designate an agency or a contractor to inspect real property upon receipt of a request and to provide certifications that real property is abandoned residential property.

 

 

If a lender has a reasonable belief that real property may be abandoned residential property, the lender or its agent:

  • May enter the real property, but may not enter any dwelling or structure, to investigate whether the real property is abandoned residential property.  A lender and its agents who enter real property to make such an investigation are not liable for trespass; and
  • May request a certification that the real property is abandoned residential property from the agency or contractor designated by the applicable governmental entity.

 

Upon receipt of a request, the agency or contractor designated by the applicable governmental entity will inspect the real property to determine the existence of two or more conditions that indicate an abandoned residential property.  The designee and any employees of the designee may enter the real property, but may not enter any dwelling or structure, to perform an inspection, and the designee and any employees who enter real property are not liable for any civil damages as a result of any act or omission, not amounting to gross negligence, or for trespass.

 

 

If the designee or an employee of the designee determines that the real property is abandoned residential property, the designee will serve a notice by first-class mail to the borrower or the successor in interest of the borrower and by posting the notice on the front door of the residence.  The notice must provide that unless a lawful occupant of the real property contacts the designee within 30 days after service of the notice, the designee will issue a certification that the real property is abandoned residential property and that the lender may use the certification to seek an expedited procedure for the exercise of the trustee’s power of sale.

 

 

If a borrower or the successor in interest of the borrower or a lawful occupant of the real property fails to contact the designee within 30 days after service of the notice, the designee must provide to the lender a certification that the real property is abandoned residential property.  The certification must:

  • Be signed and verified by the designee or the employee or employees of the designee who inspected the real property;
  • State that, upon information and belief of the designee, after investigation by the designee or the employee or employees of the designee, the real property is abandoned residential property; and
  • State the conditions or circumstances supporting the determination that the property is abandoned residential property.  Documentary evidence in support of such conditions or circumstances must be attached to the certification.

 

For an inspection, service of notice, and issuance of a certification, the agency or contractor designated by the applicable governmental entity may charge and receive from the lender a fee of not more than $300.

 

 

A lender who elects to use an expedited procedure for the exercise of the trustee’s power of sale must include, or cause to be included, with the notice of default and election to sell an affidavit setting forth the facts supporting the determination that the real property is abandoned residential property and the certification provided to the lender.  The affidavit must:

  • Be signed and verified by the lender;
  • State that, upon information and belief of the lender after investigation by the lender or its agent, the property is abandoned residential property; and
  • State the conditions or circumstances supporting the determination that the property is abandoned residential property.  Documentary evidence in support of such conditions or circumstances must be attached to the affidavit.

 

If the recorded notice of default and election to sell includes the affidavit and certification, before the sale, the borrower or a successor in interest of the borrower may record in the office of the county recorder in the county where the real property is located an affidavit stating that the real property is not abandoned residential property, unless the borrower or the successor in interest of the borrower has surrendered the property as evidenced by a document signed by the borrower or successor confirming the surrender or by the delivery of the keys to the real property to the lender.  Upon the recording of such an affidavit:

  • The borrower or the successor in interest must mail by registered or certified mail, return receipt requested, to the lender and the trustee a copy of the affidavit; and
  • The notice of default and election to sell and the affidavit and certification are considered to be withdrawn.

 

If the recorded notice of default and election to sell includes the affidavit and certification, the trustee’s sale of the abandoned residential property must be conducted within 6 months after the lender received the certification.  If the trustee’s sale is not conducted within 6 months after the lender received the certification:

  • The notice of default and election to sell and the affidavit and certification are considered to be withdrawn; and
  • The lender is liable to the borrower or the successor in interest of the borrower for a civil penalty of not more than $500.

 

The period specified above is tolled:

  • If a borrower has filed a bankruptcy case until the bankruptcy court enters an order closing or dismissing the bankruptcy case or granting relief from a stay of the trustee’s sale; or
  • If a court issues a stay or enjoins the trustee’s sale, until the court issues an order granting relief from the stay or dissolving the injunction.

 

“Applicable governmental entity” means:

  • If the real property is within the boundaries of a city, the governing body of the city; and
  • If the real property is not within the boundaries of a city, the board of county commissioners of the county in which the property is located.

 

The power of sale must not be exercised until not less than three months have elapsed after the recording of the notice or, if the notice includes an affidavit and a certification indicating that an election has been made to use the expedited procedure for the exercise of the power of sale with respect to abandoned residential property, not less than 60 days have elapsed after the recording of the notice.

 

 

The notice of default and election to sell must, if an election has been made to use the expedited procedure for the exercise of the power of sale with respect to abandoned residential property, include the affidavit and certification.

 

 

The provisions setting forth requirements for the sale of owner-occupied housing do not apply to the exercise of the power of sale if the recorded notice of default and election to sell includes an affidavit and a certification indicating that an election has been made to use the expedited procedure for the exercise of the power of sale with respect to abandoned residential property.