LEGAL BRIEF FORECLOSURE ON RENTAL PROPERTY JANUARY 2016

Transcription

1 LEGAL BRIEF FORECLOSURE ON RENTAL PROPERTY JANUARY 2016 PREPARED BY NELLIS LAW CENTER, 4428 England Ave (Bldg 18), Nellis AFB, Nevada , Appt. Line If yu rent prperty yu suspect may g int freclsure, there are resurces yu may use t verify the freclsure. One f thse resurces includes the Clark Cunty Assessr website lcated at Once n the website, click PROPERTY RECORD SEARCH which allws yu t search by parcel number, wner name, r address. Yu can get infrmatin n the prperty, including the exact address and parcel number. Yu will need this infrmatin when yu g t the Clark Cunty recrder website at This website will give yu detailed infrmatin regarding the prperty, including any actins pending against it. Fr mre infrmatin, cntact the Recrder s Office at (702) In additin, a renter can place a freclsure clause in their lease requiring a landlrd wh is delinquent in mrtgage payments t ntify the tenant f the delinquency and allw the tenant t cancel the cntract (see example belw). CURRENT NEVADA LAW: Under previus Nevada state law, if yu are renting a dwelling unit which is freclsed upn, yu culd be served with a ntice requiring yu t leave within 3 days. If yu did nt leave, the new wner culd file an evictin actin against yu. This law, hwever, has been replaced by federal law see Helping Families Save Their Hme Act f 2009, belw. Starting 01 Octber 2009, Nevada law allws yu t mve at any time after the wner has received a ntice f default and electin t sell. HELPING FAMILIES SAVE THEIR HOMES ACT OF 2009, P.L President Obama signed this bill int law n May 20, The bill includes a natinwide 90 day pre-evictin ntice requirement fr tenants in freclsed prperties. Belw are cmmn questins and answers n the law. This infrmatin can als be fund at 1

2 Can the persn, bank r ther institutin wh buys the building at freclsure make me leave right away? N. The new wner needs t end yur tenancy by giving yu a ntice t leave f at least 90- days. If yu have an unexpired lease, yu may be able t stay until the end f the lease. What can I d if the new wner says I have t leave in less than 90 days? Yu can send a letter telling the new wner abut the law. See the sample letters at the end f this handut. Keep a cpy f the letter yu send. It may help t g t the pst ffice and pay fr a return receipt t make the new wner sign t prve they gt yur letter. If yu get a green receipt signed by the new wner in the mail, save it. Yu must als ffer t pay the new wner yur rent and live up t the ther terms f yur lease. What can I d if the new wner serves me with a ntice t leave within 3 days? Yu shuld cntact a lawyer immediately. Refer t the Legal Brief n Lawyer Referral Services fr further infrmatin n hw t cntact a lawyer. If yu unable t cntact a lawyer, call the new wner immediately. Tell the new wner abut the law and say that yu are entitled t at least a 90 day ntice. State that if the new wner tries t evict yu that yu will defend based n the new law. What happens if I dn t pay the new wner rent r vilate ther terms f my lease? If yu are late with yur rent, the new wner can send yu a ntice giving yu 5 days t pay, mve r file an affidavit with justice curt explaining that that yu have a legal excuse nt t pay. See Hw T Respnd T An Evictin Ntice/ Nn-Payment f Rent link If yu vilate ther terms f yur lease the new wner can send yu a ntice stating that yu either cure the breach f the lease r mve within 5 days. If yu dn t cure and have nt mved within 5 days, then the new wner can send yu a ntice giving yu 5 days t mve r file an affidavit with justice curt explaining that that yu have a legal excuse nt t mve. What if I have a lease that has mre than 90 days left? In mst cases, the new wner cannt evict yu until the end f the lease. There are tw exceptins. If the new wner wants t use yur hme as their primary residence, the new wner nly has t give yu a 90-day ntice t leave after they becme the wner. If yu d nt pay yur rent r vilate ther terms f my lease the new wner may evict yu as described abve. 2

3 What must the 90 day ntice say? The new federal law applies t bth single family hmes and large apartment cmplexes. It als applies t weekly as well as mnthly rentals. It des nt specify what the ntice shuld say. Effective 10/1/09, NRS creates additinal ntice requirements fr residential (4 units r less) freclsures f dwellings rented by the mnth r lnger. The 90 day perid shuld be cntained in a ntice f change f wnership which must include a statement: (a) Giving the cntact infrmatin fr the persn t whm rent shuld be paid; (b) Ntifying yu that the rental agreement with the previus wner r landlrd cntinues in effect thrugh the ntice perid, and (c) Ntifying yu that failure t pay rent r cmply with any ther term f the agreement r applicable law cnstitutes a breach f the rental agreement and may result in evictin prceedings. Fr larger cmplexes and dwellings f all sizes rented fr perids shrter than 30 days n specific frm f ntice is required. Fr bth residential freclsures and large cmplexes the ntice must allw yu the time required t mve under the new federal law. If the new federal law is nt extended by Cngress, state law ntice perids will gvern. What if I d nt want t stay 90 days r fr the remainder f my lease? Effective 10/1/09, NRS fllwing residential (4 units r less) freclsures f dwellings rented by the mnth r lnger, tenants may vacate at any time during the ntice perid withut penalty. N recrd f evictin may be entered if yu vacate within the ntice perid. In any case, yu may be able t negtiate t see what the new wner might ffer if yu agree t mve early. Many banks which freclse may ffer yu a cash fr keys ptin. What if I wish t cntinue renting the dwelling? Yu may be able t negtiate t see what the new wner might ffer yu a new lease r agree that yu can remain lnger than 90 days. When shuld I first be infrmed that my dwelling is in freclsure? Fr mst tenants the 90 day ntice shuld cme as n surprise. Starting 10/1/09, NRS requires fr residential (4 units r less) freclsures that at the same time the lender serves the wner (yur landlrd) with a ntice f default and electin t sell, that yu get written ntice which allws yu t break the lease and mve at any time. This ntice shuld cme at least 90 days prir t the freclsure sale, but n less than 15 days prir. That ntice must als describe yur rights and respnsibilities under Nevada evictin prcedures. The ntice must be bth psted n the prperty and mailed t yu. The separate ntice must be similar t the Ntice t Tenants f the Prperty fund at the end f this brief, which describes a tenant's rights in the event f a mrtgage freclsure. 3

4 What can I d if the new wner serves me with a summns and cmplaint asking a curt t evict me withut giving me ntice? Yu shuld cntact a lawyer immediately. Refer t the Legal Brief n Lawyer Referral Services fr further infrmatin n hw t cntact a lawyer. If yu unable t cntact a lawyer, g t the Clerk f the curt n the summns and cmplaint immediately. File an answer with the curt that says the new wner failed t give the ntice required by the Prtecting Tenants at Freclsure Act, Pub. L. N , 702 (2009). Yu may btain a frm answer with instructins frm the Clark Cunty curt. G t curt n the date the curt sets fr a trial and take with yu: 1. the cpy f yur letter t the new wner, 2. the green return receipt, if yu received ne, 3. the cpy f the new law that is attached t this ntice and 4. a cpy f yur lease, if yu have ne. What can I d if a sheriff r cnstable arrives at my dr t evict me? Tell the sheriff r cnstable that if yu received n evictin ntices r yu were nt served with a summns and cmplaint. Ask fr time t g t curt t get the rder evicting yu set aside. Yu shuld cntact a lawyer immediately. Refer t the Legal Brief n Lawyer Referral Services fr further infrmatin n hw t cntact a lawyer. If yu unable t cntact a lawyer, g t the Clerk f the curt n the evictin rder immediately. Say that yu want t file an emergency mtin t vacate the evictin rder. What happens t my security depsit? The previus wner is required by NRS 118A.244 t either (a) return yur security depsit r (b) transfer it t the new wner. What if I am a sectin 8 tenant? Yu have all f the rights listed abve regarding yur lease and the requirement that the wner give yu a 90-day ntice t leave. Yu als have additinal prtectins. The Sectin 8 Husing Assistance Payment cntract cntinues. The freclsure is nt a lawful reasn t terminate yur lease. Call yur Sectin 8 wrker and tell the wrker what is happening. Yu can als send a letter telling the new wner abut the law. See the sample letters at the end f this brief. 4

5 What can happen if I d nt leave by the end f the ntice perid? If yu d nt leave vluntarily r enter int an agreement which allws yu t stay, the new wner may evict yu at the end f the ntice perid (90 days r the expiratin f the lease). T evict yu the new wner must serve yu with a summns and cmplaint. The Service Member Civil Relief Act (SCRA) is als a resurce; hwever, SCRA prvides nly limited prtectin t service members frm freclsure. The SCRA, Sectin 531, states that a landlrd r anyne else with paramunt title (i.e. banks) cannt evict service members frm their private residences withut a valid curt rder. A curt rder will nly be issued if the service member is served ntice and had an pprtunity t respnd. After being served a ntice f evictin, a service member may file an applicatin with the curt t delay the executin f the evictin fr a perid f apprximately 90 days. This prtectin is limited t residential leases where the mnthly rent des nt exceed $3, fr 2014 (adjusted annually based n the Cnsumer Price Index). THE INFORMATION CONTAINED IN THIS PAMPHLET IS OF A GENERAL NATURE AND IS PROVIDED FOR YOUR ASSISTANCE AND CONVENIENCE. IT IS NOT INTENDED AS LEGAL ADVICE AND IS NOT A SUBSTITUTE FOR LEGAL COUNSEL. IF YOU HAVE ANY QUESTIONS AS TO HOW THE LAW IN THIS AREA AFFECTS YOU OR YOUR LEGAL RIGHTS, CONTACT A CIVILIAN ATTORNEY OR THE NELLIS AIR FORCE BASE LEGAL OFFICE FOR AN APPOINTMENT WITH A LICENSED ATTORNEY. 5

6 SAMPLE LETTERS SAMPLE LETTER FOR NON SECTION 8 TENANT TO SEND TO NEW OWNER Date: T: (Name and address) Dear Landlrd, I am writing this letter in respnse t the ntice f terminatin dated. The Prtecting Tenants at Freclsure Act, Pub. L. N , (2009), which became law n May 20, 2009, applies t state evictin prceedings. This act requires that a new wner wh tk title t residential rental prperty thrugh freclsure must hnr existing leases until the end f the lease term. There are three exceptins t this rule: 1) if there is an existing term lease and the new wner wants t ccupy the freclsed prperty as a persnal residence befre the end f the lease term, 2) if there is an existing term lease with less than 90 days t the end f the lease term, r 3) if the existing lease n the freclsed prperty is a mnth-t-mnth tenancy r a tenancy at will. In each f these cases, the wner must prvide the tenant at least 90 days ntice t terminate the tenancy. Because the ntice sent n des nt cmply with this law, I ask that yu rescind (withdraw) the ntice. Sincerely, Tenant name Sample Letter fr Sectin 8 Tenant t send t the Landlrd (Name and address f tenant) (Name and address f wner) Date: Dear Landlrd, I am writing this letter in respnse t the ntice f terminatin dated. The Prtecting Tenants at Freclsure Act, Pub. L. N , (2009), that became law n May 20, 2009, applies t state evictin prceedings. This law requires a persn r entity 6

7 wh acquires wnership f residential rental prperty thrugh freclsure t take subject t (be legally bund by) the Sectin 8 vucher lease and Husing Assistance Payments (HAP) cntract. A new wner can nly terminate the lease and HAP cntract by giving the tenant at least 90 days ntice f terminatin prir t the end f the lease. If the Sectin 8 lease and HAP cntract have less than 90 days remaining in their term, r if the new wner wh takes title at freclsure wants t ccupy the premises as his r her persnal residence, the new wner may terminate the lease nly after giving the tenant at least 90 days ntice f such terminatin. Because the ntice sent n falls shrt f the 90-day ntice required by law, I ask that yu rescind (withdraw) the ntice. Sincerely, Tenant name SAMPLE FORECLOSURE CLAUSE: THE LANDLORD AGREES t ntify the tenant if the landlrd is delinquent in mrtgage payments r this prperty is in ANY stage f freclsure. The landlrd s ntice t the tenant must be in writing and either sent by certified mail r psted n the frnt dr f the rental prperty. The landlrd must prvide this ntice within five (5) calendar days f the landlrd becming delinquent r receiving ntice the prperty is subject t freclsure. Tenant has the abslute right t terminate this lease if the landlrd is delinquent r the rental prperty is in any stage f freclsure. Tenant must give the landlrd ntice in writing; the terminatin will be effective 30 days frm the tenant s written ntificatin t the landlrd. The 30-day perid allwed under this clause trumps any cnflicting terminatin perids fund elsewhere in this lease agreement. Terminatin under this clause is withut penalty. THE LANDLORD FURTHER AGREES, that upn terminatin f this lease under this clause, landlrd will surrender, n the last day f tenant s ccupancy, all prepaid rent and all security and pet depsits paid by the tenant. It is agreed that surrender f these mnies will be in full (i.e., the exact amunt paid by the tenant withut any deductin). Finally, the landlrd agrees that, if the tenant chses early terminatin under this clause, landlrd will be liable t the tenant fr the tenant s reasnable csts f lcatin similar husing elsewhere and the reasnable csts incurred by the tenant t mve t the new place. 7