Nevada Residential Real Property Law

This is a follow up to Rental Restrictions within an Association.

As you know many associations were adding rental restrictions and affecting the rights of Unit owners after the close of escrow.

Click on the dated that it is effective for a reading: October 1, 2009, NRS 116.  A summary of the modifications are: 

Rental Restrictions Cannot Be Added After Purchase of Unit:

The modified rule is now if at the time you purchased your unit there is NOT a restriction on rental; it cannot be restricted in such a manner.  Similarly, if a restriction to ask for approval to rent is not in place at the time of the purchase of a Unit, the rule to ask for approval cannot later be placed on the Unit.

Restrictions May be Waived by Board

If your Unit has such a restriction, the owner may by law, “may seek a waiver of the prohibition from the executive board based upon a showing of economic hardship, and the executive board may grant such a waiver and approve the renting or leasing of the unit.”  This allows the Board to approve a rental, above the maximum, by law, without necessarily violating the Declarations.

The Calculations of Number of Rental Units Shall Not Include Owner Inquiring

And finally, “if the declaration contains a provision establishing a maximum number or percentage of units in the common-interest community which may be rented or leased, in determining the maximum number or percentage of units in the common-interest community which may be rented or leased, the number of units owned by the declarant must not be counted or considered.”  What?  I think it means that if the current number of units already rented is the maximum but if you own a unit, you may still rent, as you may calculate the percentages and exclude your unit(s) in the calculation.  So when calculating the person seeking to rent may count all of their rentals as one (1) unit.

This is a follow up to my January 2, 2009 An Update on BPOs in Nevada  and the October 26, 2007 Broker Price Opinions (BPOs) in Nevada.

 **Effective July 1, 2009**

BPO - A BPO is defined as a, “written analysis, opinion or conclusion that a real estate license prepares for a person relating to the estimated price for a specified parcel of real property.”

Real Estate Licensees  In Nevada Are Allowed to Perform BPOs.

A real estate agent may, “prepare and provide a broker’s price opinion and charge and collect a fee” for this service.

BPO Files

BPOs (even those submitted electronically) must be stored for five (5) years.

Broker Responsibility. 

The broker is responsible for all activities of a licensee who is associated with the broker and with the preparation of a BPO.

A BPO can be prepared for a:

1.         An existing or potential seller for the purposes of listing and selling a parcel of real property;

2.         An existing or potential buyer of a parcel of real property;

3.         A third party making decisions or performing due diligence related to the potential listing, offering, sale, exchange, option, lease or acquisition price of a parcel of real property; or

4.         An existing or potential lienholder, except that a broker’s price opinion prepared for an existing or potential lienholder may not be used in lieu of an appraisal for the purpose of determining whether to approve a mortgage loan.

A BPO must include:

1.         A statement of the intended purpose of the broker’s price opinion;

2.         A brief description of the real property and the interest in the real property for which the broker’s price opinion is being prepared;

3.         The basis used to determine the broker’s price opinion, including, without limitation, any applicable market data and the computation of capitalization;

4.         Any assumptions or limiting conditions used to determine the broker’s price opinion;

5.         The date of issuance of the broker’s price opinion;

6.         A disclosure of any existing or contemplated interest of every licensee who prepares or provides the broker’s price opinion, including, without limitation, the possibility of a licensee representing the seller or purchaser;

7.         The license number, name and signature of every licensee who prepares or provides the broker’s price opinion;

8.         If a licensee who prepares or provides the broker’s price opinion is a real estate salesman or a real estate broker-salesman, the name of the real estate broker with whom the licensee is associated; and

9.         In at least 14-point bold type, the following disclaimer: Notwithstanding any preprinted language to the contrary, this opinion is not an appraisal of the market value of the property.  If an appraisal is desired, the services of a licensed or certified appraiser must be obtained.

BPO submitted electronically or on bank forms.

If a broker’s price opinion is submitted electronically or on a form supplied by the requesting party:
1.         A signature required by #7 above may be an electronic signature, as defined by NRS 719.100.

2.         The disclaimer required in #9 above may be transmitted in a separate attachment if the electronic format or form supplied by the requesting party does not allow additional comments to be written by the licensee. The electronic format or the form supplied by the requesting party must:

            a.         Reference the existence of a separate attachment; and

            b.         Include a statement that the broker’s price opinion is not complete without the attachment.

The attached BPO Rider Form has been created to incorporate all requirements from the new law (as of July 1, 2009).  Questions on filling it out? Here is an example filled out BPO Rider Form.  This would be uploaded as a separate attachment if sent electronically and simply forwarded with the BPO if sent in hard copy to render the BPO complete in Nevada. 

NOTE:  The NRED has information bulliten #14 which discussed this, but it now removed from the site.

**Effective June 9, 2009**

The majority of SB253 is effetive 10.1.09, but per AB 350, section 8 of SB253 is, “effective upon passage and approval”

The debate is over – the seller must pay for it.  Now, that likely does not stop the listing agent from asking the Buyer to pay for it up front (like an appraisal) and be reimbursed at time of closing.

If the Seller refuses to provide and the escrow closes, the Buyer still (even in this new law) loses any right to claim damages.  If the Seller and Buyer agree (right or wrong) to simply not have the package delivered, this form will serve to keep your transaction folder complete, click on this title to retrieve it: Re-Sale’ Package Non Receipt Buyers’ Hold Harmless of Broker.

II.         Packages Must Now Contain Amount of Transfer Fees.

A resale package must now contain a, “A statement of any transfer fees, transaction fees or any other fees associated with the resale of a unit.”  NRS 116.4109 (1)(e).  This is helpful.  Many times the transfer fees were learned of after close of escrow.  This not the fee for the package, rather a fee to ‘join’ the association.

Effective 10.1.2009, any two persons can become Domestic Partners in Nevada.  A domestic partnership is one in which persons have registered a valid domestic partnership. (this form does not exist yet).

HOW IT AFFECTS YOUR REAL ESTATE CAREER?  Don’t wait for complications at close of escrow as whether you have the authority to list and sell.  Have each Partner sign.  When taking a listing, just like a married client, inquire if your client has a domestic partnership.  And ask about not only here in Nevada but any other state.  If they had one, but it is dissolved, they should provide title with the dissolution.  It’s simple really, just treat it like a marriage, escrow will assist you with the rest.

SOME QUICK NOTES ON DOMESTIC PARTNERSHIP TERMS:

Date of Domestic Partnership – The date of effective date is just like date of marriage, but it is referred to as “the date of registration.”

Out of State Domestic Partnerships are recognized in Nevada.

It is just like being married, it affects – 1. Community property; 2. Mutual responsibility for debts to third parties; 3. The right to seek financial support from the other following the dissolution; 4. Other rights and duties as between the partners concerning ownership of property.

To end a Domestic Partnership – 1. You file for divorce or ‘dissolution in family court’ under NRS 125; 2. Or…simplified termination by filing a one pager with the Nevada Secretary of State (this form does not exist yet), provided: a.) Partnership is not older than 5 years. (the five year itch has now been reduced to law); b.) No children created/adopted during; c.) There is no community or joint property or the parties have executed an agreement setting forth the division; d.) The parties waive any rights to support or the parties have executed an agreement setting forth support; e.) The parties waive the right to conduct a normal divorce in family court.