New eviction bill seen as compromise but has also drawn criticism

Las Vegas resident Gloria Fontanilla listed her rental property in the Providence master-planned community last week as a last-ditch effort to recoup more than $23,000 in rental payments owed by her former tenant, who unexpectedly moved out last month.

The 75-year-old said she couldn’t persuade him to apply for rental assistance when he stopped paying rent last year. But a recently passed eviction bill, Assembly Bill 486, could change that for landlords such as Fontanilla.

AB486 allows landlords to apply for rental assistance on behalf of their tenant and also gives added protections to renters such as pausing an eviction proceeding until their rental assistance application is processed.

The bill seems like a winning compromise for landlords and tenants after a tumultuous year caused by the pandemic. AB486 is not expected to be enforced for another month, once the federal moratorium ends July 31, but it has already drawn criticism from landlords and property owners who say the bill causes more financial harm by dragging out the eviction process.

That’s why Fontanilla expressed mixed feelings about the new bill.

“Some landlords who don’t have a mortgage, it’s good for them. But if you have a mortgage payment, it’s not good,” she said, adding landlords like herself have limits when it comes to juggling multiple mortgage payments.

Leavitt Evictions President Kaila Leavitt said the bill is unnecessarily burdensome for her clients in Clark County.

“Pre-pandemic it was a simple question that was asked by judges, ‘Do you have the rent money today?’” Leavitt said. “If it was a yes, they paid right there in front of the judge. Everyone went on their merry way. If they didn’t, then the eviction was granted right there. Now, you have to wait a minimum of 30 days before you go in front of a judge and be forced to have mediation with the tenant.”

Old versus new

Tenants who have failed to pay rent can receive a seven-day eviction notice to quit or pay from their landlord. The tenant is responsible for filing a response with the Justice Court, and a landlord’s next move would be to file a complaint of summary eviction. The court sets a hearing shortly after where the landlord and tenant can present their case to a judge, who either grants or denies the eviction.

Donna DiMaggio, an attorney at Holley Driggs in Las Vegas, said AB486 tweaks that process, creating more confusion.

“I know in Henderson the judge there is just staying everything until they can figure out how to apply AB486 once the (federal) moratorium ends,” she said.

AB486 requires all eviction hearings — not just for nonpayment of rent — to be stayed, or paused, for no more than 30 days and placed into mediation.

It also allows tenants with a pending application for rental assistance to have their eviction stayed until the application is processed. This means a landlord could wait several months before knowing if a tenant has been approved or denied by the county’s CARES Housing Assistance Program, said DiMaggio.

Should a landlord receive a tenant’s rental assistance, the case will be dismissed and the landlord is not allowed to evict that tenant for at least another 90 days.

DiMaggio, who represents a number of landlords, said the bill was well intentioned by bolstering protections for renters seeking help but highlights a number of practical issues such as an already-overwhelmed court system and a rental assistance program that has been slow to disburse funds.

At risk

Statewide efforts around eviction proceedings reflect a national push by the Biden administration.

The White House announced Thursday it would work with state and local officials to create alternatives to evictions such as urging courts to encourage mediation programs and streamlining the rental assistance process so tenants and landlords can receive payments faster.

An estimated 35,147 renter households in Nevada are at risk of being evicted, according to a Zillow analysis released Thursday. “Of those who are behind on rent, 23.9 percent believe they are very likely and 28.3 percent somewhat likely to be evicted,” according to the report.

Jim Berchtold, Legal Aid Center’s directing attorney of the Consumer Rights Project, said during a housing rights forum this month that the organization is “getting panicked calls every day.”

He said tenants must file a response to an eviction notice from their landlord; choosing to ignore it means a judge will grant a landlord’s eviction request. He explained the benefit of AB486 is that tenants can use their pending rental assistance application as a defense during the hearing, a move that automatically pauses the eviction proceeding for the tenant.

The CARES Housing Assistance Program, or CHAP, said it has paid $110 million in rental and utility assistance to 25,000 households since July 2020. The program has more than $100 million available for rental assistance and is expected to receive additional federal funds in the coming months.

Leavitt said some tenants have applied and received rental assistance but noted that among the landlords she works with, most of their tenants have not applied for CHAP.

“There’s only one good thing I’ve been able to find in this bill that impacts the landlords: They can now apply on behalf of their tenant,” she said.

Direct assistance

Fontanilla said if she had been able to apply for rental assistance on behalf of her tenant, it would have helped and likely prevented her from needing to sell the home.

She was able to cover some of the rent by dipping into her savings account. After clearing out her savings, she applied for a mortgage forbearance this year, then decided to sell the home after her tenant moved out.

“I put it out for listing this month on Father’s Day. That’s all I can do,” she said. “The home prices are high; I can’t believe it. It’s a blessing. I want to (collect from him) but the money you’re going to spend hiring an attorney will add to your loss so it’s better not to do anything.”

The benefit of AB486 is a landlord can receive rental assistance on behalf of a tenant, but the landlord must meet certain qualifications. A landlord must own a single-family residence, seek rental assistance for at least one unit in the residence, live in Nevada or employ a property manager based in Nevada and receive less than $4 million in annual gross revenue from rental properties owned across the state.

An eligible landlord must also wait 60 days after applying so a housing or social service agency has time to contact the tenant. If the tenant doesn’t respond to the agency or apply for rental assistance during that time frame, the landlord can receive the payment on the condition they not evict the tenant for 90 days, according to the bill. And $5 million in federal funds have been allocated toward paying landlords directly.

DiMaggio said it’s not a perfect solution and though AB486 protects renters who have followed the necessary steps, it does so at the cost of stripping landlords of their rights.

“It’s going to be quite a feat for all of us that’s involved — landlords, tenants, the courts,” she said. “I think we’re all still going to be working hard through this to figure out where we’re all going to end up.”

Contact Subrina Hudson at shudson@reviewjournal.com or 702-383-0340. Follow @SubrinaH on Twitter.