HOUSING MARKET:

Bill to protect renters in foreclosure cases

Monday, Oct. 20, 2008 | 3:02 p.m.

Real Estate in Crisis

CARSON CITY – Renters are getting one or two days notice in foreclosures and in some cases are losing thousands of dollars in security deposits they posted.

Assemblyman Mark Manendo, D-Las Vegas, has asked for a bill to be drafted to be introduced in the 2009 Legislature to authorize a county to require property owners to give notice to the tenants in cases of foreclosure.

These renters may pay $800 to $900 security deposit and also pay the first and last month. The owner of the complex or the home knows he or she is not going to pay any more on their investment, Manendo says.

“So they squeeze as much as they can out of the renter’’ and then walk away, Manendo says. “This happens a lot and it’s a scam.”

While walking door to door, Manendo said he encountered a family that received one-day notice to leave the premises.

Legislators and local governments so far have asked that 633 bills be drafted for introduction next year.

Another recent request comes from Assemblyman Morse Arberry, D-Las Vegas, who wants to remove the cap of $550,000 on homestead exemptions.

The law protects the forced sale of a home whose value is up to $550,000 to recover a debt if the property has been designated as a homestead.

The 2007 Legislature raised the homestead exemption from $350,000 to $550,000.

And Arberry said he is working on a bill to eliminate the cap as a way to attract rich people to locate in Nevada. Otherwise if these affluent people had a $1 million home that was designated as a homestead, it would be shielded from judgments to collect any debt.

The present law provides that if the home is worth more than $550,000, a judge must appoint three independent appraisers to value the home. If it exceeds the homestead exemption permitted, the judge must decide whether any part of the property can be sold to satisfy the debt without “material injury” to the home.

If the judge decides the property can not be divided, than he can order home sold and the money divided between the creditor and the homeowner.