03/11/2013
BIG CHANGES IN COMMERCIAL LANDLORD/TENANT LAW ©
Are you a Landlord or Tenant of a commercial property? If you are, the Nevada legislature has just changed how you may do business. In 2011 the Nevada legislature created a new section of the Nevada Revised Statutes – NRS 118C – which pertains specifically to commercial properties (any real property not considered a dwelling, as defined in NRS 118A.140).
There are several key provisions that will impact commercial landlord/tenant transactions:
Delinquent in Rent? The Landlord May Change the Locks!
Perhaps the most significant provision of NRS 118C is contained in 118C.220. It allows the landlord (or its agent) to change the locks on a commercial tenant’s premises, if that tenant is delinquent in the payment of rent. No court order is needed. The single requirement, should a landlord change the locks, is that a notice be posted on the property for a minimum of 5 days, informing the tenant where he may obtain a new key. And, the landlord may demand all past-due rent before releasing the key. Yes… all of this can be done without a court order.
Should the landlord violate NRS 118C.220 (unlawful removal of tenant), the tenant does have recourse under the bill. He may recover actual damages, one month’s rent, or $500, whichever is greater. The tenant may also recover possession of the premises under a writ of restitution, as detailed in the statute. If the tenant acts in bad faith when obtaining a writ of restitution, there are landlord remedies built into the statute. Also, if the provisions of the tenant’s lease are in conflict with NRS 118C.220 (for example, if the landlord is required to give a specific notice to the tenant of the tenant’s default), the lease supersedes these provisions.
Abandoned Property
NRS 118C.020 clarifies when a Landlord of commercial premises can deem property to be “abandoned.” If the “goods, equipment or other property, in an amount substantial enough to indicate a probable intent to abandon the commercial premises, is being or has been removed from the commercial premises,” the landlord may consider the property as having been “abandoned” by the tenant.
A clear caveat in this provision of the bill is in the case where removal of personal property is a normal function of the tenant’s business. If that is the case, the landlord cannot make a presumption of abandonment. Also, if there is a written agreement between the landlord and either the tenant or someone else who has an ownership interest in the tenant’s remaining personal property, the provisions of that written agreement pertaining to personal property will take precedence over the language in NRS 118C.020.
Disposal of Abandoned Property
Once the landlord has determined there is abandoned personal property on a commercial premises, he need not hold it for thirty (30) days, as is required under NRS 118A.460 for personal property left in residential dwelling units. The landlord need only send the tenant a notice by “certified mail, return receipt requested” giving the tenant a minimum of 14 days to claim the property. (Personal property lien holders are also entitled to claim the property in which they have interest during this 14-day period.) The statute does not mandate the tenant’s signature acknowledging receipt of the notice before the landlord can dispose of the property.
In disposing of the property, NRS 118C.230 permits the landlord to recover “his or her reasonable costs out of the abandoned personal property or the value thereof.” Interestingly, this language doesn’t specifically limit “costs” recoverable by the landlord when disposing of the tenant’s personal property. In other words, if there is enough value from the sale of the personal property to cover not only the landlord’s expenses of inventory, moving, and/or storage of the property, but also to cover unpaid rent and other sums owed by the tenant under the lease, I see nothing in the bill prohibiting the landlord from claiming those amounts. Since personal property left by commercial tenants is typically more valuable than that left by residential tenants, I predict our courts are going to have some interesting encounters with this provision of the bill.
Unlawful Removal of Tenant
NRS 118C.200 also discusses unlawful removal of tenants in commercial properties. Landlords are prohibited from:
• Removing a door, window, attic hatchway cover, door lock, or doorknob.
• Removing furniture/fixtures supplied by the landlord.
• Shutting off utilities for which the tenant pays directly to the utility company. (As I read this, it would seem that if the landlord pays utilities and then charges back to the tenant his proportionate share, the landlord could then elect to shut off utility services.)
Conclusion
The new statute should shortcut many of the legal impediments which commercial landlords have previously encountered in the past when dealing with a defaulting tenant. On the other hand, Tenants have been granted additional safeguards when dealing with a heavy handed Landlord who acts contrary to the statute.
T. James Truman & Associates
3654 North Rancho Drive, Suite 101
Las Vegas, Nevada 89130
Phone (702)256-0156
Fax: (702)396-3035
www.trumanlegal.com