SB78A - Makes various changes relating to property. (BDR 10-623)

(Reprinted with amendments adopted on May 23, 2023) SECOND REPRINT S.B. 78 - *SB78_R2* SENATE BILL NO. 78–SENATOR DONATE PREFILED JANUARY 26, 2023 ____________ JOINT SPONSORS: ASSEMBLYMEN GONZÁLEZ, PETERS; AND WATTS ____________ Referred to Committee on Commerce and Labor SUMMARY—Makes various changes relating to property. (BDR 10-623) FISCAL NOTE: Effect on Local Government: No. Effect on the State: No. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to property; establishing and revising various definitions relating to property; establishing provisions relating to fees charged by landlords to prospective tenants; prohibiting landlords from transferring, selling, assigning or reporting to certain agencies information concerning amounts owed by tenants to landlords; establishing provisions relating to circumstances under which a landlord changes his or her agent, broker or property management company; requiring a rental agreement to include separate appendices that contain certain information; making it unlawful for a landlord or certain other persons to charge a tenant certain fees; making various changes relating to fees, fines, deposits and costs paid by tenants; requiring rental agreements to include a grace period for the late payment of rent; requiring a tenant to be served with advance notice of increases in certain fees, fines and costs; revising provisions relating to agents of attorneys who serve certain notices relating to evictions; revising provisions relating to representation in small claim actions; and providing other matters properly relating thereto. – 2 – - *SB78_R2* Legislative Counsel’s Digest: Existing law requires a landlord and a tenant to perform certain obligations 1 with respect to a lease of real property. (NRS 118A.240-118A.300) As part of a 2 lease of real property, a landlord may require a tenant to pay a security deposit, 3 defined as a payment, deposit, fee or charge used by the landlord to: (1) remedy a 4 default in the payment of rent by the tenant; (2) repair damage to the premises other 5 than normal wear; and (3) clean the dwelling unit. (NRS 118A.240, 118A.242) 6 Section 5 of this bill defines the term “security deposit” to mean a deposit made in 7 cash or by any other acceptable manner to a landlord for any of the following 8 purposes: (1) remedying any default of the tenant in the payment of periodic rent, 9 including, without limitation, the cost of any fee for the late payment of rent; (2) 10 repairing damage to the premises caused by the tenant other than normal wear; and 11 (3) cleaning the unit. Section 28 of this bill repeals the existing definition of 12 “security deposit.” 13 Existing law requires a landlord to return a security deposit, or any remaining 14 portion thereof, within 30 days after the termination of the tenancy and makes the 15 landlord liable for certain amounts for failing to return the security deposit within 16 this period. (NRS 118A.242) Section 15 of this bill: (1) requires a landlord to 17 deliver an itemized, written accounting of the disposition of the security deposit or 18 surety bond, or a combination thereof in certain circumstances; (2) prescribes how 19 delivery of the itemized, written accounting must be effectuated by the landlord; 20 and (3) makes the landlord liable for certain amounts for failing to deliver the 21 itemized, written accounting. Section 15 also provides that in any action relating to 22 an amount claimed of a security deposit for repairing damage to the premises 23 caused by the tenant, the landlord has the burden of proving: (1) that the damage to 24 the premises occurred during the tenancy; and (2) the actual costs of repair. 25 Existing law defines “normal wear” as deterioration which occurs without 26 negligence, carelessness or abuse of the premises, equipment or chattels by the 27 tenant, a member of the household of the tenant or another person on the premises 28 with the consent of the tenant. (NRS 118A.110) Section 11 of this bill revises the 29 definition of “normal wear” to mean expected deterioration which occurs during the 30 course of a tenancy from the normal use of the premises by such persons. 31 Existing law requires written rental agreements to contain certain provisions, 32 including, without limitation, provisions concerning: (1) the amount of rent and the 33 manner and time of its payment; and (2) fees which are required and the purposes 34 for which they are required. (NRS 118A.200) Existing law authorizes a landlord to 35 charge a reasonable fee for the late payment of rent. (NRS 118A.210) Section 12 of 36 this bill requires such rental agreements to include a grace period for the late 37 payment of rent. Section 13 of this bill prohibits a landlord from charging the fee 38 for the late payment of rent until the expiration of the grace period set forth in the 39 rental agreement. Section 4 of this bill defines the term “grace period” for such 40 purposes. Section 12 also: (1) requires a written rental agreement to include a 41 separate appendix that contains an explanation of each fee that may be charged 42 during the term of the rental agreement and the purpose for which the fee may be 43 charged; and (2) makes it unlawful for a landlord or other person authorized to 44 enter into a rental agreement on his or her behalf to charge a tenant a fee in an 45 amount or for any purpose that is not set forth in the appendix. Finally, section 12 46 requires a written rental agreement to also include a separate appendix that contains 47 an explanation of the rights of the tenant pursuant to federal and state law and local 48 ordinances. 49 Existing law places certain prohibitions on rental agreements. (NRS 118A.220) 50 Section 14 of this bill prohibits rental agreements from requiring tenants to pay any 51 fee, fine or cost except those which are: (1) authorized by statute; or (2) actual and 52 reasonable. Sections 12, 19-21 and 24 of this bill make conforming changes 53 relating to the limitations on fees, fines and costs. 54 – 3 – - *SB78_R2* Section 7 of this bill authorizes a landlord to charge a fee for the eviction of a 55 tenant. Section 6 of this bill requires a landlord who collects from a prospective 56 tenant any fee to apply to rent a dwelling unit to refund the fee if the landlord: (1) 57 rents the dwelling unit to a different prospective tenant; and (2) does not conduct 58 the activity for which the fee was collected. Section 6 further prohibits a landlord 59 from collecting an application fee, a fee to obtain a credit report or a fee to obtain a 60 background check for a minor who is a member of the household of the prospective 61 tenant. 62 Section 8 of this bill prohibits a landlord from transferring, selling, assigning or 63 reporting to certain agencies any amount owed by the tenant, unless the landlord 64 first delivers to the tenant an itemized, written accounting of all outstanding 65 amounts owed by the tenant. Section 8.5 of this bill requires any action for the 66 enforcement of any provision of a rental agreement to be brought: (1) not later than 67 2 years after the termination of the tenancy; and (2) as a small claims action, if 68 certain jurisdictional limits apply to the amount owed by the tenant. 69 Section 9 of this bill provides that if a landlord changes his or her agent, broker 70 or property management company, the landlord or the new agent, broker or 71 company is required to send certain information to the tenant within 10 business 72 days after the change. 73 Existing law prohibits a landlord from increasing the rent of a tenant unless the 74 tenant is served with advance notice of the increase. (NRS 118A.300) Section 18 of 75 this bill similarly prohibits a landlord from increasing certain fees, fines and costs 76 charged to the tenant unless the tenant is served with advance notice of the increase. 77 Existing law provides that if a tenant’s failure to perform basic obligations can 78 be remedied by cleaning and the tenant fails to comply with a request to remedy 79 such failure in a timely manner, the landlord may enter the dwelling unit, cause the 80 work to be done and bill the tenant. (NRS 118A.440) Section 22 of this bill deletes 81 this provision of existing law. 82 Existing law requires a tenant to be served with certain notices relating to 83 evictions. Existing law also provides that certain notices may be served by an agent 84 of an attorney who is licensed in this State if: (1) the attorney has been retained by 85 the landlord in certain actions; and (2) the agent is acting at the direction and under 86 the direct supervision of the attorney. (NRS 40.280) In addition to the existing 87 requirements concerning such agents, section 25 of this bill prohibits the agent 88 from being employed as a property manager in this State. 89 Existing law authorizes a nongovernmental legal or commercial entity to be 90 represented by its director, officer or employee in an action in small claims court. 91 (NRS 73.012) Similarly, section 26 of this bill authorizes a landlord to be 92 represented by his or her agent in a small claims action. 93 Section 26.5 of this bill provides that the amendatory provisions of this bill do 94 not apply to a tenant of a dwelling unit that is a manufactured home, or on the 95 premises of a manufactured home lot or a manufactured home park. 96 Finally, section 27 of this bill provides that a rental agreement entered into 97 before the effective date of this bill is binding upon the parties and may be enforced 98 on or after that date, regardless of whether the provisions of the rental agreement 99 conflict with the amendatory provisions of this bill. 100 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 118.101 is hereby amended to read as follows: 1 118.101 1. A person may not refuse to: 2 – 4 – - *SB78_R2* (a) Authorize a person with a disability to make reasonable 1 modifications to a dwelling which he or she occupies or will occupy 2 if: 3 (1) The person with the disability pays for the modifications; 4 and 5 (2) The modifications are necessary to ensure that the person 6 with the disability may use and enjoy the dwelling; or 7 (b) Make reasonable accommodations in rules, policies, 8 practices or services if those accommodations are necessary to 9 ensure that the person with the disability may use and enjoy the 10 dwelling. 11 2. A landlord may, as a condition for the authorization of such 12 a modification, reasonably require the person who requests the 13 authorization, upon the termination of his or her occupancy, to 14 restore the dwelling to the condition that existed before the 15 modification, reasonable wear and tear excepted. 16 3. Except as otherwise provided in subsection 4, a landlord 17 may not increase the amount of a security deposit the landlord 18 customarily requires a person to deposit because that person has 19 requested authorization to modify a dwelling pursuant to 20 subsection 1. 21 4. If a person requests authorization to modify a dwelling 22 pursuant to subsection 1, the landlord may require that person to 23 deposit an additional security deposit in addition to the amount the 24 landlord usually requires if the additional security deposit: 25 (a) Is necessary to ensure the restoration of the dwelling 26 pursuant to subsection 2; 27 (b) Does not exceed the actual cost of the restoration; and 28 (c) Is deposited by the landlord in an interest-bearing account. 29 Any interest earned on the additional amount must be paid to the 30 person who requested the authorization. 31 5. As used in this section, “security deposit” has the meaning 32 ascribed to it in [NRS 118A.240.] section 5 of this act. 33 Sec. 2. Chapter 118A of NRS is hereby amended by adding 34 thereto the provisions set forth as sections 3 to 9, inclusive, of this 35 act. 36 Sec. 3. (Deleted by amendment.) 37 Sec. 4. “Grace period” means a period of time, not less than 38 3 days, during which rent can be paid late by a tenant. 39 Sec. 5. “Security deposit” means a deposit paid in cash, by 40 check or by any other acceptable manner to a landlord for any of 41 the following purposes: 42 1. Remedying any default of the tenant in the payment of 43 periodic rent, including, without limitation, the cost of any fee for 44 the late payment of rent. 45 – 5 – - *SB78_R2* 2. Repairing damage to the premises caused by the tenant 1 other than normal wear. 2 3. Cleaning the dwelling unit. 3 Sec. 6. 1. A landlord who collects from a prospective tenant 4 any fee to apply to rent a dwelling unit, including, without 5 limitation, an application fee, a fee to obtain a credit report or a 6 fee to obtain a background check, shall refund the fee to the 7 prospective tenant if the landlord: 8 (a) Rents the dwelling unit to a different prospective tenant; 9 and 10 (b) Does not conduct the activity for which the fee was 11 collected, including, without limitation, processing the application 12 or obtaining a credit report or background check of the 13 prospective tenant. 14 2. A landlord shall not collect an application fee, a fee to 15 obtain a credit report or a fee to obtain a background check for a 16 minor who is a member of the household of the prospective tenant. 17 3. As used in this section: 18 (a) “Household” means an association of persons who live in 19 the same home or dwelling and who are related by blood, 20 adoption, marriage or domestic partnership. 21 (b) “Minor” means a person who is under 18 years of age. 22 Sec. 7. A landlord may charge a tenant a fee for the eviction 23 of the tenant. The amount of the fee must not exceed the direct 24 and actual costs of the landlord associated with the action for 25 eviction. 26 Sec. 8. 1. A landlord may not transfer, sell, assign or report 27 to a collection agency or credit reporting agency any amount owed 28 by the tenant to the landlord, unless the landlord delivers to the 29 tenant an itemized, written accounting of all outstanding amounts 30 owed by the tenant at least 30 days in advance of transferring, 31 selling, assigning or reporting the amount owed to a collection 32 agency or credit reporting agency. 33 2. An itemized, written accounting required by subsection 1 34 must con [Text truncated for display. Full text available on LegiScan.]