When lawmakers passed legislation in 2019 that capped late fees on unpaid rent and slightly extended the timeframe for evictions, both seen as modest tenant protections, realtor and apartment groups cautioned it would lead to disastrous consequences on Nevada’s already fragile rental stock.
State Sen. Julia Ratti, D-Washoe, said those fears never materialized.
Similar warnings, including the prospects of landlords selling properties, and apartments implementing stricter deposit requirements, were heard Wednesday discussing Senate Bill 218, which promises additional tenant protections.
The bill would mandate at least a three-day grace period for rent, require landlords to clearly define any fees on the first page of the lease and prevent landlords from charging prospective renters for submitting applications.
Ratti, who is sponsoring the bill, said the legislation provides “reasonable and modest protections for tenants” comparable to other policies seen all over the country.
“We did not see a crumbling of the rental infrastructure because of the modest protections put in last session, and I don’t believe we will this session,” she said.
The proposal builds on and clarifies some of the language in Senate Bill 151 passed in 2019, which limited late fees for unpaid rent to 5 percent and allowed people to retrieve essential items such as medication, clothing and baby formula following an eviction. Nevada Realtors lobbied for Gov. Steve Sisolak to veto the measure.
Not long after the bill went into effect, Ratti said a property owner in Las Vegas sent out a notice to 5,600 tenants unilaterally changing rental conditions around late fees, which was reported by the Las Vegas Review-Journal.
It wasn’t the only reaction from landlords and property owners.
“We capped late fees, and a subset of landlords responded to that to try to figure out a way to fleece their tenants for money in other ways,” Ratti said.
In the last year, she’s heard from residents across the state, including seniors and people with disabilities on fixed incomes, about receiving late fees they never received before.
“If you’re above a certain age and you are receiving a social security check, you know that social security check arrives like clockwork on the third day of the month,” she said. “These landlords had worked with those tenants. They had not put in late fees for a senior citizen or a person with a disability who was paying with their social security check. All of a sudden after the passage of Senate Bill 151, late fees were being applied to tenants who had regularly paid their rent on time.”
The bill requires no less than a three day grace period.
In addition to late fees, Ratti pointed to practices used by some landlords to come up with new fees either not clearly identified in the lease or hidden in pages of legal jargon.
“We saw a slew of fees we have never seen before,” Ratti said. “Light bulb fees. Dishwasher fees. Cleaning fees that hadn’t existed before. You name it, they came up with a fee for it. And these fees were not disclosed in advance.”
SB 218 would also require landlords to “clearly describe on the front page of the lease” what fees are included in renting the unit.
The bill prohibits a landlord from charging a prospective tenant a fee for the submission of a rental application.
Ratti said the bill asks landlords to “put the cost of doing business into their rent” and not charge people who will never come close to living in that unit.
“You have one unit, and you have 50 people interested in that unit. A landlord at this point can charge all 50 of those folks an application fee,” Ratti said. “Forty nine of those folks are never going to get that apartment. Forty nine of the folks are going to have to go to one, two, three, upwards of 10 places to try to find a unit in northern Nevada right now. If they have to pay ten 50 dollar application fees just to get on a list for an opportunity to maybe get a unit, they can’t afford to do that.”
Other provisions of the bill include shortening the time frame landlords have to return security deposits from 30 days to 21 days, and allowing tenants to request a property inspection prior to moving out in order to rectify issues that would prevent a deposit from being returned.
State Sen. James Settlemeyer called the bill one-sided and said it prevented landlords from holding bad tenants accountable.
Ratti countered that because of Nevada’s summary eviction process, which is unique to the state and allows tenants to be evicted without going to court, the power dynamic is one-sided in favor of landlords.
“The starting point in Nevada leans heavily toward landlords,” she said. “That’s why over the last two sessions I’ve tried to get a few more protections for tenants.”
The Legal Aid Center of Southern Nevada, which presented the legislation alongside Ratti, the ACLU of Nevada, the Culinary Union, and Faith in Action urged lawmakers to enact protections for tenants who have faced increased uncertainty in the Covid-19 pandemic.
The bill’s opponents in the rental industry disagreed.
“Realistically speaking, many of SB 218’s proposed revisions will cause havoc and chaos when they are actually applied to real world landlord-tenant situations,” said Terry Moore, an attorney who practices landlord-tenant law.
Susy Vasquez, the executive director of the Nevada Apartment Association, said it’s “not standard practice for the apartment industry to charge first or last for security deposit” but might be something adopted if lawmakers enact the proposal.
Some opponents warned landlords would sell their units, leaving Nevada with a greater affordable housing shortage.
“I think market forces have a lot to do with it.” Ratti said. “Their property values are up significantly and I do think some folks are fatigued based on the pandemic and some of the things that have happened.”
“I don’t think it’s because of modest protections we put in place to equalize the balance between tenants and landlords,” Ratti said.