Things you Should Know
Nevada statutory law and administrative regulations impose various responsibilities and restrictions on owners of rental property, and also on the individuals and firms that provide management and rental services for them. The laws and regulations apply whenever the property is situated within the boundaries of this state, regardless of where the individual owner lives or, in the case of an entity-owner, where the entity is domiciled. This article addresses the legal issues and operational considerations most commonly encountered by residential landlords in Nevada. It is intended as a practical guide, and not as a comprehensive treatise on the laws referenced. It is necessarily general in scope. For more detailed information on how they may apply to your own specific situation you should contact your licensed property manager or legal advisor.
What You Should Know as a Landlord in Nevada
Who can manage my Nevada Properties?
In Nevada, residential property managers must hold a valid Real Estate Broker, Salesperson, or Broker-Salesperson license, be associated with a licensed brokerage firm, and hold a Property Management Permit. EXCEPTIONS: an unlicensed individual can manage ONE residential unit for another person, and the OWNER of a multi-unit dwelling of up to four units (i.e., a “fourplex”) can manage that property provided that he or she occupies one of the units.
Do I have to allow pets in my rental property?
No. Owners of pets are not a constitutionally protected class of person, so you are free to discriminate against them. However, if your unit is vacant and you are concerned with minimizing the period of vacancy, consider this: According to recent surveys, there are roughly 78 million pet dogs and 87 million pet cats in this country. If you elect to exclude pet owners, you are eliminating a large segment of the pool of potential qualified tenants. You may wish to “consider” pets, but with suitable restrictions to protect your property and limit potential liability. PRIMACK has its own pet policy, which we think accomplishes those ends without seriously restricting your prospective tenant pool.
FAIR HOUSING LAW EXCEPTION: regardless of your pet preference, you must accept an otherwise qualified applicant who owns a bona fide “service animal,” such as a guide dog for the blind. In that case, you are permitted to collect an additional deposit in a reasonable amount as security against possible damage by the animal.
Do I have to rent to anyone who applies?
No. While both federal fair housing laws and state laws prohibit us from discriminating on the basis of race, color, national origin, disability, religion, ancestry, familial status or sex, you DO have the right investigate the background of any applicant to determine that they are responsible, that they have the ability to pay and are likely to pay the rent when due, that they will probably not damage the property, and that they can demonstrate all of these characteristics via a favorable credit report, employment verification and rental history.
Professional management firms are well equipped to conduct these investigations and make appropriate determinations on applicant qualifications. You may, but you are NOT required to, participate in government subsidy programs such as Section 8. Talk to your Licensed Property Manager or Legal Advisor to learn more about subsidy programs.
At Primack Team Property Management we believe in equality. That is why we have created a standardized point system that allow us to ensure equal opportunity to everyone.
Can I sell the house while it is occupied by a tenant?
Yes. Having leased the property does not prevent you from passing title.
HOWEVER, selling the house does NOT automatically terminate the lease, so you have to do one of two things: either (a) transfer title subject to the existing lease, which means that the new owner would have to honor the lease through its scheduled termination, or (b) if the buyer does not want the tenants, negotiate with the tenants for a “buy-out” of the remainder of the lease. Failure to make any arrangement could subject you to the payment of damages to the tenant for breach of contract that should be displaced by your buyer.
You also will have to consider the problem of showing the house to prospective buyers. It may be necessary to give the tenants some sort of incentive, such as a reduced rent, in order to secure their cooperation in showing the house, since while they are in possession you do not have a right to place a lockbox on the door.
What happens if a tenant can't or won't pay rent?
The Nevada Revised Statutes provide a special, “expedited” procedure for eviction when the reason for the eviction is non-payment of rent. This “summary eviction” procedure begins with the filling of a “5-Day Notice to Pay Rent or Quit” that is served the first day the rent is delinquent, which leads to a court hearing within 15 days. At the hearing, the court will require the tenant to either (a) pay the rent due under the lease agreement, or (b) if the tenant makes a counterclaim against the landlord, he/she must deposit the rent due with the court pending adjudication of the matter. If the tenant fails to do one or the other, the court generally will enter an eviction order. Generally, summary eviction takes a total of about 24 – 27 days from the serving of the 5-Day Notice until a “Constable lock-out” and re-taking of possession by the owner. In most cases, the tenants manage to come up with the rent once the 5-Day Notice is filed. If PRIMACK manages your properties and signed the tenants, we advance the costs of filling for eviction and recover them from the tenants.
IMPORTANT BENEFIT: If a tenant is evicted for non-payment of rent, the owner is entitled to keep the tenant’s security deposit as compensation for lost rent.
MORE IMPORTANT: proper tenant screening can all but eliminate the need for eviction proceedings!!
What repairs and maintenance can I charge the tenant for?
As a landlord, you are expected to endure “normal wear” as a cost of being in the ‘rental business.” Nevada law (NRS 118A.110) defines “normal wear” as “…that deterioration that occurs without negligence, carelessness or abuse of the premises, equipment or chattels by the tenant, a member of his household or other person on the premises with his consent.”
Although the statutory definition may seem a little vague, actual court cases in Nevada have fairly consistently interpreted the language to mean that while the tenant is obligated to not damage the property, she need not necessarily return it in exactly the same condition as when she took possession. “Normal wear” has been ruled to include such items as nail holes in the walls for picture frames, carpet soil in the traffic aisles, and scuffed paint. A good guide might be to consider how your own home might show wear after a year, other than deliberate or negligent damage.
On the other hand, the tenant is responsible for damage done to your property that is not repaired by the termination of the tenancy, and you can levy their security deposit for such damage if it’s not repaired by the time the property is surrendered. For example, while nail holes from hanging their own art works or family photos would be “normal wear” and not compensable, were the tenants to put up a trophy case with 24 molly bolts such that the drywall would have to be repaired after its removal, that would be damage and recoverable from the security deposit if not restored by the tenants at move-out. Your management firm should conduct a move-out inspection with digital photographs to document any such damage.
Who holds the security deposit and how is it disposed?
Under Nevada law, all tenant security deposits collected on your behalf by a management firm are held in a state-regulated escrow account. A security deposit belongs to the tenant for the duration of the occupancy but is subject to forfeiture in favor of the owner in the event that the premises are not returned in substantially the same condition delivered, excepting “normal wear.”
Nevada requires that the landlord must “provide the tenant with a written accounting of the disposition of the security and return any remaining portion of the security to the tenant no later than 30 days after termination of the tenancy…”
The move-out inspection with photographs, assessment of damage, and determination of the security refund due are among the services that should ordinarily be provided by your property management firm.