Thought Leaders: Nevada rolls back COVID-19 moratorium on evictions, foreclosures in phases

CARSON CITY, Nev. — The COVID-19 pandemic has caused a global economic crisis, leaving many Nevada tenants, landlords, property owners and lenders alike reeling and unsure of their rental or mortgage obligations related to evictions and foreclosures during this uncertain time.

In an effort to protect residential and commercial tenants struggling to pay their rent or mortgage, on March 29, 2020, Governor Steve Sisolak released Declaration of Emergency: Directive 008 which imposed a moratorium on most evictions and foreclosures in Nevada (the “Moratorium”), explaining that, “[T]his directive is intended to keep people in their homes at a time when we are encouraging all Nevadans to stay at home. This is not the time to put people out on the streets. This is also not the time to evict small-business owners who have been hit hard by the economic fallout of this pandemic.”

While Directive 008 put the brakes on most evictions and foreclosures in Nevada, it is important to note that it did not eliminate rental and payment obligations outright, but rather it merely postponed them.

In addition to this effort to curtail evictions and foreclosures during the pandemic, Governor Sisolak has been quick to acknowledge that, just like tenants and mortgage holders, many landlords and lenders have also been negatively impacted by the resulting economic fallout of the pandemic, recognizing that those individuals should also be afforded protection during this unsettled time.

In keeping with that goal, on June 25, 2020, Governor Sisolak released Declaration of Emergency: Directive 025, thereby unveiling his plan to lift the moratorium on evictions and foreclosures in phases (“Directive 025”), declaring that, “[K]eeping tenants in their homes and ensuring landlords receive payment for delinquent rental amounts are equally important goals.”

Directive 025 provides detailed guidance for tenants and landlords trying to navigate the foreclosure/eviction process during the pandemic.

Any person interested in the process should read Directive 025 closely as well as the Directive 025: Reference Chart, which contains a complete breakdown of important dates related to the moratorium rollback. The key provisions of Directive 025 are as follows:

Foreclosures-Residential

• Beginning September 1, 2020, lenders may initiate/reinitiate residential foreclosures.
• Borrowers are responsible for payments not paid to the lender during the Moratorium.
• Lenders may not assess late fees on payments owed from March 30, 2020 through August 31, 2020.

Evictions-Residential

• Beginning July 1, 2020, landlords may initiate/reinitiate post-foreclosure unlawful detainer actions.
• Beginning August 1, 2020, landlords may initiate/reinitiate summary eviction proceeding for:
  • continued possession after the expiration of the term of the lease;
  • possession of leased premises who are tenants at will;
  • assignment or subletting of the premises in violation of the lease agreement;
  • committing waste to the leased premises;
  • conducting unlawful business at the leased premises;
  • maintaining a nuisance on the leased premises;
  • using controlled substances on the leased premises; and
  • violating a lease covenant other than for the payment of rent.

• Beginning September 1, 2020, landlords may commence summary eviction proceedings on the basis of either no cause or for the nonpayment of rent.
• Tenants are responsible for paying back rent not otherwise paid during the Moratorium.
• Landlords may not assess late fees on payments owed from March 30, 2020 through August 31, 2020.
• Landlords and tenants are encouraged to enter into repayment agreements and the Nevada Attorney General has published a sample addendum, which landlords and tenants may use to establish a repayment plan. In the event a tenant and landlord enter into a repayment agreement, the landlord must halt eviction proceedings affecting the property.
• Eviction notices, whether served in connection with summary eviction actions or unlawful detainer actions, which were served on the tenant prior to March 30, 2020 but which remain unanswered by the tenant, or in instances where the landlord did not file an unlawful detainer complaint, are deemed void and must be refiled.
• Eviction notices, whether served in connection with summary eviction actions or unlawful detainer actions, which were served on the tenant between March 30, 2020 and June 30, 2020 are also deemed void and must be refiled.

Foreclosures-Commercial

• Beginning July 1, 2020, lenders may initiate/ reinitiate commercial foreclosures.
• Borrowers are responsible for payments not paid to the lender during the Moratorium.
• Lenders may not assess late fees on payments owed from March 30, 2020 through June 30, 2020.

Evictions-Commercial

• Beginning July 1, 2020, landlords may:
  • initiate/reinitiate commercial eviction proceedings.
  • exercise their remedies to change the locks on commercial premises as allowed by NRS 118C.200.
  • initiate/reinitiate post-foreclosure unlawful detainer actions.
  • tenants are responsible for paying back rent not otherwise paid during the Moratorium.

• Landlords are prohibited from assessing late fees on payments owed from March 30, 2020 through June 30, 2020.
• Landlords and tenants are encouraged to enter into repayment agreements and the Nevada Attorney General has published a sample addendum which landlords and tenants may use to establish a repayment plan. In the event a tenant and landlord enter into a repayment agreement, the landlord must halt eviction proceedings affecting the leased premises.
• Eviction notices, whether served in connection with summary eviction actions or unlawful detainer actions, which were served on the tenant prior to March 30, 2020 but of which remain unanswered by the tenant, or in instances where the landlord did not file an unlawful detainer complaint, are deemed void and must be refiled.
• Eviction notices, whether served in connection with summary eviction actions or unlawful detainer actions, which were served on the tenant between March 30, 2020 and June 30, 2020 are also deemed void and must be refiled.

It is important be aware of these specific provisions that supplement an already confusing statutory structure that describes the rights and responsibilities Nevada tenants, landlords, property owners and lenders.

If you or your business have concerns related to rental and/or mortgage obligations, do not hesitate to seek the guidance of competent, local legal counsel.

Chelsea D. Bibb, Esq., is an associate attorney focusing on business law and civil litigation with Allison MacKenzie, Ltd., which sponsors this content.