Assembly Bill 486 was passed in Nevada (very quietly at that) on June 5th 2021 and it basically extends the tenants ability to stay in a property without paying until June 5th 2023. We (real estate professionals of Nevada) tried to petition this assembly bill and it was repealed twice before they voted to pass it 42-29-1 in the assembly and 21-17 in the senate in favor of the tenants on the third version of the bill. This bill has a lot of confusing language, but after weeks of learning the new rules from an attorney, we feel comfortable breaking the new Bill down piece by piece.
First we need to cover who it affects… This bill does not apply to commercial tenants, only residential tenants. The other exception is that it does not apply to nuisance or a sale of a home. What does this mean? Well, basically Section 1 states that all other tenancies are protected from an eviction order even if they are in default of their lease agreement. Section 2 of the assembly bill states that the tenant has an affirmative defense (they are protected from eviction) if they have a pending application for rental assistance. The other way the tenant gets protected is by the landlord refusing to accept any assistance given by the State even if it for lesser amount due.
The landlord does have an option, and unfortunately that is to file a motion to rebut the administrative defense. This of course means that the landlord and tenant must go to mediation and at any time before the hearing the tenant may apply for assistance to essentially gain immunity. If the landlord refuses any assistance and goes to trial however, the tenant is awarded the denial of eviction process plus damages. The State of Nevada is forcing full participation of this program or the tenants will win by default.
What are some of the sellers options if they are facing this situation? First option is they can actually file on behalf of the tenant to receive the benefits. (There is currently $5,000,000 available to disburse to all landlords in Nevada) The other option is they could sell their home and be exempt from having to deal with any eviction proceedings. The new bill has very aggressive language against landlords if they fail to comply with the eviction restrictions. Section 3 imposes the following:
“Sec.3.Notwithstanding any other provision of law:1.Ifa tenanthas defaulted in the payment of rentand the landlord pursues, continuesto pursueor otherwise evictsthe tenant for any reason that existed or arose during the period of default for which the landlord receivedrental assistance on behalf of the tenant, the tenant or the governmental entity administering the program for the rental assistance may file a claim ofwrongful eviction against the landlord.2.The claim ofwrongful eviction must be filed with the courtwith jurisdiction over the underlyingdesignated proceeding for eviction.3.If thecourt finds that the landlord accepted rental assistance on behalf of the tenant andpursued, continued to pursue or otherwise evicted the tenant forany reason that existed or arose during the period of default for which the landlord receivedrental assistanceon behalf of the tenant:(a)Thecourt may:(1)Impose a civil penalty:(I)If the claim was filed by the governmental entity administering the program for rental assistance, in an amount equal to the amount of rental assistance obtained by the landlord; or(II)If the claim was filed by the tenant, in an amount equal to 25 percent of the amount described in sub-subparagraph (I); and
–6–-81st Session (2021)(2)Order the landlord to pay costs and attorney’s fees of the tenant or governmental entity, as applicable.(b)The landlord may not file any claim against the tenant for any delinquent amount of rent paid with the rental assistance.
Sec.3.5. Notwithstanding any other provision of law, and in addition to the remedy described in section 3 of this act, if a governmental entity administering a program for rental assistance brings a cause of action relating to a landlord who accepted rental assistance on behalf of a tenant and pursued, continued to pursue or otherwise evicted a tenant for any reason that existed or arose during the period of default for which the landlord received rental assistance on behalf of the tenant:1.Any damages awarded to the governmental entity must not exceed an amount equal to the amount of rental assistance obtained by the landlord; and2.The governmental entity is entitled to costs and attorney’s fees.”