Nevada Rental Properties in Foreclosure
Nevada rental properties in foreclosure are sold by the lender at auction or directly to investors, just like any other foreclosed properties. If the foreclosed property is occupied by tenants, the landlord or property manager assigned by the new owners to oversee the property has to abide by specific guidelines when dealing with this situation.
The property management company must be cognizant of the new laws enacted in 2009 that basically allows a tenant to remain in the home, town home, or condo unit for the full remaining term of the lease. There are two exceptions:
- If the new owner wants to use the home as their primary residence, the new owner only has to give a 90-day notice to leave after they become the owner.
- If you do not pay your rent or violate other terms of the lease the new owner may begin the eviction process.
This law supersedes previous legislation which allowed the foreclosure process to override a lease that had been signed prior to foreclosure proceedings. The new owner would have then been allowed to evict the tenants if that was the plan.
When a new owner forces the eviction of a tenant while the tenant’s original lease has not yet reached full term, the tenant should contact the landlord and advise them of the new law. If the landlord continues with the eviction process, the tenant should contact an Attorney.
In most cases involving foreclosed multi-unit apartments, a new owner would be unlikely to evict any tenants whose leases are near expiration, and would instead negotiate a new lease, particularly with tenants whose past history of rent payments have been on time.
Certainly, it is to the landlord’s advantage to have a building or buildings fully occupied with stable, rent-paying tenants. If the units are to be kept, the landlord has a continuous source of cash flow, and if to be sold, the units are, naturally more valuable to a buyer when occupied rather than empty.
However, tenant leases may not be renewed if the landlord has decided to completely renovate the property for whatever reason, or convert the apartments into condominium units.
In the event the property is to be converted from apartment to condo, tenants would be given the choice of either moving out or purchasing their condo/apartment once their original lease had expired.
For more information on foreclosure evictions, visit the Clark County Courts website.