Nevada Law on Foreclosure Rights for Renters
In January 2009, Nevada ranked No. 1 in the United States in the number of home foreclosures. Las Vegas was second among the nation's metro areas with the most foreclosures, according to the "Las Vegas Sun" newspaper.
Homeowners are not the only ones affected by foreclosure. An article in the "Nevada Appeal" called displaced tenants the "forgotten victims" of the housing and mortgage crisis. Fortunately for renters, 2009 also saw federal legislation that broadened their rights when facing eviction because of foreclosure.
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Protecting Tenants at Foreclosure Act
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Under the Helping Families Save Their Home Act, President Obama signed a new law called the Protecting Tenants at Foreclosure Act. The federal legislation gives Nevada tenants more time to vacate a foreclosed property than they were entitled to under Nevada's landlord-tenant law.
The act provides that a lender who forecloses must honor a tenant's lease for the remainder of its term, then serve a 90-day notice to vacate thereafter, if necessary. Month-to-month renters get at least 90 days to move. The law is effective until the end of 2012.
Owner-Occupant Buyers
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If the foreclosed property is sold to a buyer who intends to live there, the lease may be canceled by the new owner and the remainder of the lease period terminated. The buyer still owes the tenant 90 days' notice.
Tenants affected by this exception in the law may sue in small claims court within the jurisdiction of the residence. The suit would accuse their prior landlord with failing to deliver the full term under their lease agreement and ask for monies owed, such as a security deposit.
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Nevada Revised Statutes
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In October 2009, a bill revised certain Nevada laws affecting tenants in foreclosure. It provides that the sale of a residential foreclosure requires a separate notice to any tenant--not just the borrower--to inform him that the property is subject to a notice of sale. The foreclosing lender must give the tenant 60 days' notice if the tenant will be asked to move out. The law requires the tenant to pay rent to the lender during this time.
If the tenant leaves the property within 60 days, the lender may not begin the eviction process or file a record of eviction judgment against the tenant. The lender may negotiate a new lease or a purchase agreement or offer the tenant payment in exchange for the tenant's vacating the property ("cash for keys") earlier than 60 days.
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