SB395A - Revises provisions relating to real property. (BDR 10-288)

REQUIRES TWO-THIRDS MAJORITY VOTE (§ 1) EXEMPT (Reprinted with amendments adopted on June 5, 2023) THIRD REPRINT S.B. 395 - *SB395_R3* SENATE BILL NO. 395–SENATOR NEAL MARCH 27, 2023 ____________ Referred to Committee on Judiciary SUMMARY—Revises provisions relating to real property. (BDR 10-288) FISCAL NOTE: Effect on Local Government: May have Fiscal Impact. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to real property; limiting, with certain exceptions, the total aggregate number of units of residential real property in this State that may be purchased in any 1 calendar year by certain corporate investors; requiring the registration of certain corporate investors in residential property in this State with the Securities Division of the Office of the Secretary of State; requiring that certain deeds relating to residential real property include certain information about corporate investors; making an appropriation; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Section 1 of this bill provides, with certain exceptions, that: (1) the total 1 aggregate number of units of residential real property in this State that may be 2 purchased in any 1 calendar year by corporations, limited-liability companies and 3 any affiliates of such entities must not exceed 1,000 units; and (2) a corporation, 4 limited-liability company or affiliate of such an entity is prohibited from purchasing 5 any unit of residential real property in this State if, as a result of the purchase, the 6 total aggregate number of units of residential real property purchased in this State 7 during the current calendar year by corporations, limited-liability companies or any 8 affiliates of such entities would exceed 1,000 units. 9 Section 1 also requires the creation and maintenance of a registry of 10 corporations, limited-liability companies and any affiliates of such entities that 11 purchase or own residential real property in this State by the Securities Division of 12 the Office of the Secretary of State. Section 1 requires, with certain exceptions, a 13 corporation, limited-liability company or any affiliate of such an entity to register 14 with the Securities Division before purchasing any residential real property in this 15 State. Section 1: (1) authorizes the Secretary of State to charge a fee to each such 16 corporation, limited-liability company or any affiliate of such an entity; and (2) 17 – 2 – - *SB395_R3* requires the Secretary of State to adopt regulations necessary to carry out the 18 provisions of section 1. For the purposes of section 1, the term “corporation” does 19 not include a family trust company or a housing authority. 20 Section 2 of this bill provides, with certain exceptions, that if a corporation, 21 limited-liability company or any affiliate of such an entity purchases residential real 22 property, the deed must: (1) be accompanied by a copy of the certificate of 23 registration issued by the Secretary of State; and (2) clearly set forth that the 24 residential real property is not the primary residence of the owner. Section 2 also 25 prohibits the county recorder from recording the deed unless the deed: (1) contains 26 information about the ownership of the corporation, limited-liability company or 27 any affiliate of such an entity, as set forth in the registry created pursuant to section 28 1; and (2) clearly sets forth that the residential real property is not the primary 29 residence of the owner. 30 Section 3 of this bill makes an appropriation to the Office of the Secretary of 31 State for personnel, travel, operating, equipment, information services and 32 contractor costs to carry out the provisions of section 1. 33 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 111 of NRS is hereby amended by adding 1 thereto a new section to read as follows: 2 1. Except as otherwise provided in subsection 2: 3 (a) The total aggregate number of units of residential real 4 property in this State that may be purchased in any 1 calendar 5 year by corporations, limited-liability companies and affiliates of 6 such entities must not exceed 1,000 units. 7 (b) A corporation, limited-liability company or affiliate of such 8 an entity shall not purchase any unit of residential real property in 9 this State if, as a result of the purchase, the total aggregate 10 number of units of residential real property purchased in this State 11 during the current calendar year by corporations, limited-liability 12 companies or affiliates of such entities would exceed 1,000 units. 13 2. The provisions of subsection 1 do not apply to: 14 (a) The intracorporate sale or transfer of units of residential 15 property; or 16 (b) The sale of newly constructed units of residential property. 17 3. The Securities Division of the Office of the Secretary of 18 State shall create and maintain a registry of corporations, limited- 19 liability companies and affiliates of such entities that purchase or 20 own residential real property in this State. The Securities Division 21 shall make such registry available on the Internet website of the 22 Office of the Secretary of State. 23 4. Except as otherwise provided in this subsection, a 24 corporation, limited-liability company or affiliate of such an entity 25 must register with the Securities Division of the Office of the 26 Secretary of State before purchasing any unit of residential real 27 – 3 – - *SB395_R3* property in this State. The registration requirement does not apply 1 to a corporation, limited-liability company or affiliate of such an 2 entity that owns less than 10 units of residential real property in 3 this State. 4 5. The Secretary of State shall issue a certificate of 5 registration to each corporation, limited liability company or 6 affiliate of such an entity that registers pursuant to this section. 7 6. The Secretary of State may charge a fee to each 8 corporation, limited-liability company or affiliate of such an entity 9 that registers with the Securities Division pursuant to subsection 4. 10 7. The Secretary of State shall adopt any regulations 11 necessary to carry out the provisions of this section. 12 8. As used in this section, the term: 13 (a) “Corporation” does not include: 14 (1) A family trust company, as defined in NRS 669.042. 15 (2) A housing authority, as defined in NRS 315.021. 16 (b) “Limited-liability company” has the meaning ascribed to it 17 in NRS 86.061. 18 Sec. 2. NRS 111.312 is hereby amended to read as follows: 19 111.312 1. The county recorder shall not record with respect 20 to real property, a notice of completion, a declaration of homestead, 21 a declaration of removal of discriminatory restriction, a lien or 22 notice of lien, an affidavit of death, a mortgage or deed of trust, any 23 conveyance of real property or instrument in writing setting forth an 24 agreement to convey real property or a notice pursuant to NRS 25 111.3655 unless the document being recorded contains: 26 (a) The mailing address of the grantee or, if there is no grantee, 27 the mailing address of the person who is requesting the recording of 28 the document; and 29 (b) Except as otherwise provided in subsection 2, the assessor’s 30 parcel number of the property at the top left corner of the first page 31 of the document, if the county assessor has assigned a parcel 32 number to the property. The parcel number must comply with the 33 current system for numbering parcels used by the county assessor’s 34 office. The county recorder is not required to verify that the 35 assessor’s parcel number is correct. 36 2. Any document relating exclusively to the transfer of water 37 rights may be recorded without containing the assessor’s parcel 38 number of the property. 39 3. The county recorder shall not record with respect to real 40 property any deed, including, without limitation: 41 (a) A grant, bargain and sale deed; 42 (b) Quitclaim deed; 43 (c) Warranty deed; or 44 (d) Trustee’s deed upon sale, 45 – 4 – - *SB395_R3*  unless the document being recorded contains the name and 1 address of the person to whom a statement of the taxes assessed on 2 the real property is to be mailed. 3 4. The assessor’s parcel number shall not be deemed to be a 4 complete legal description of the real property conveyed. 5 5. Except as otherwise provided in subsection 6, if a document 6 that is being recorded includes a legal description of real property 7 that is provided in metes and bounds, the document must include the 8 name and mailing address of the person who prepared the legal 9 description. The county recorder is not required to verify the 10 accuracy of the name and mailing address of such a person. 11 6. If a document including the same legal description described 12 in subsection 5 previously has been recorded, the document must 13 include all information necessary to identify and locate the previous 14 recording, but the name and mailing address of the person who 15 prepared the legal description is not required for the document to be 16 recorded. The county recorder is not required to verify the accuracy 17 of the information concerning the previous recording. 18 7. Except as otherwise provided in subsection 8, if a 19 corporation, limited-liability company or affiliate of such an entity 20 purchases residential real property: 21 (a) The county recorder shall not record the deed unless: 22 (1) The deed contains the information about the ownership 23 of the corporation, limited-liability company or affiliate of such an 24 entity set forth in the registry created pursuant to section 1 of this 25 act; and 26 (2) The corporation, limited-liability company or affiliate of 27 such an entity submits to the county recorder a copy of the 28 certificate of registration issued by the Secretary of State pursuant 29 to section 1 of this act and the name of the corporation, limited- 30 liability company or affiliate of such an entity on the deed matches 31 the name on the certificate of registration accompanying the deed; 32 and 33 (b) The deed must clearly set forth that the residential real 34 property is not the primary residence of the owner. 35 8. The provisions of subsection 7 do not apply to a 36 corporation, limited-liability company or affiliate of such an entity 37 that owns less than 10 units of residential real property in this 38 State. 39 9. As used in this section, the terms “corporation” and 40 “limited-liability company” have the meanings ascribed to them in 41 section 1 of this act. 42 Sec. 3. 1. There is hereby appropriated from the State 43 General Fund to the Office of the Secretary of State for personnel, 44 travel, operating, equipment, information services and contractor 45 – 5 – - *SB395_R3* costs to carry out the provisions of section 1 of this act the following 1 sums: 2 For the Fiscal Year 2023-2024 .................................. $476,004 3 For the Fiscal Year 2024-2025 .................................... $81,705 4 2. Any balance of the sums appropriated by subsection 1 5 remaining at the end of the respective fiscal years must not be 6 committed for expenditure after June 30 of the respective fiscal 7 years by the entity to which the appropriation is made or any entity 8 to which money from the appropriation is granted or otherwise 9 transferred in any manner, and any portion of the appropriated 10 money remaining must not be spent for any purpose after 11 September 20, 2024, and September 19, 2025, respectively, by 12 either the entity to which the money was appropriated or the entity 13 to which the money was subsequently granted or transferred, and 14 must be reverted to the State General Fund on or before 15 September 20, 2024, and September 19, 2025, respectively. 16 Sec. 4. 1. This section becomes effective upon passage and 17 approval. 18 2. Section 3 of this act becomes effective on July 1, 2023. 19 3. Sections 1 and 2 of this act become effective on October 1, 20 2023. 21 H