MINUTES OF MEETING
ASSEMBLY COMMITTEE ON JUDICIARY
Sixty-seventh Session
April 8, 1993
The Assembly Committee on Judiciary was called to order by Chairman Robert M. Sader at 8:04 a.m., April 8, 1993, in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mr. Robert M. Sader, Chairman
Mr. Gene T. Porter, Vice Chairman (late/excused)
Mr. Bernie Anderson
Mr. John C. Bonaventura
Mr. John C. Carpenter
Mr. Tom Collins, Jr.
Mr. James A. Gibbons
Mr. William D. Gregory
Mr. Ken L. Haller
Mr. William A. Petrak
Mr. John B. Regan
Mr. Scott Scherer
Mr. Michael A. Schneider
Ms. Stephanie Smith
Mr. Louis A. Toomin
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Ms. Christina R. Giunchigliani, District No. 9
STAFF MEMBERS PRESENT:
Ms. Denice Miller, Research Analyst
OTHERS PRESENT:
Mr. B. Bodeau, Intern, Senator Glomb's Office
Mr. Doug Walther, Attorney General's Office
Mr. James M. Start, Acting Administrator, Nevada Department of Commerce, Unclaimed Property Division
Mr. John Sarb, Administrator, Nevada Division of Child and Family Services
Mr. Robert Bayer, Operations Supervisor, Nevada Department of Parole and Probation
Ms. Nancy Tiffany, Operations Supervisor, Nevada Department of Parole and Probation
Ms. Pat McGaffen, Nevada Department of Prisons
Mr. David C. Morton, Executive Director, Reno Housing Authority
Ms. Gayle A. Brooks, Attorney, Reno Housing Authority
Mr. Raymond Rodriguez, Nevada Legal Services
Mr. Jon Sasser, Nevada Legal Services
Mr. Ernest Nielsen, Washoe Legal Services
Ms. Despina Hatton, Attorney, Reno Senior Citizen Law Center
Mr. Robert Nielson, Builders Association of Northern Nevada
Mr. Dusty Rhoades, Nevada Association of Realtors
Ms. Paty Redmond, Nevada Association of Realtors
Mr. John Genzler, Gold Dust Properties
Mr. Kevin McCarthy, Nevada Apartment Association
Mr. David Frazza, Nevada Apartment Association
Ms. Pam Bowsher, Bigelow Companies
Ms. Vikki Morley, Bigelow Management
Mr. Niel Dexter, Ty-De Development
Mr. George Peek, Self
Mr. Robert Tarbox, Independent apartment owner
After roll call, Chairman Sader opened the hearing on committee business.
Chairman Sader addressed matters which pertained to the work session scheduled for Friday, April 9, 1993. He noted A.B. 446 had been introduced earlier and was similar to A.B. 327. He reiterated A.B. 327 dealt with chemical analysis fees for DUI offenders and had been passed as amended. A.B. 446 dealt with chemical analysis fees for drug offenses. He asked for committee consideration to integrate the language contained in A.B. 446 into A.B. 327.
SENATE BILL NO. 226 Expands provision concerning circumstances under which state may take unclaimed property held by intermediary in another state.
Mr. James Start, Acting Administrator, Nevada Department of Commerce, Unclaimed Property Division, testified in favor of passage of S.B. 226. The purpose of the Unclaimed Property Division was to reunite individuals with their unclaimed properties. To further clarify the purpose of the division, Mr. Start reiterated, in cases where properties had been left at businesses for substantial amounts of time without evidence of owner interest, it would be assumed there was legal presumption for abandonment. He stated the businesses which retained the funds were required to notify the Unclaimed Property Division after which action would be initiated to locate the missing owners. Until the owners had been located, the funds were held by the state with the benefit accruing to the general citizenry.
Mr. Start stated S.B. 226 was a custodial law. The property owners, or heirs, never lost their right to claim the funds. Unclaimed properties were reported to the states of the missing owners' last known addresses. An exception would be when no last addresses were located. When no addresses were found, the properties were reported to the states of the businesses which held the properties. If no last known addresses were contained in the records of the businesses retaining the properties, the properties were reported to the states of incorporation.
Mr. Start anticipated federal legislation would be proposed which would change the present law. The new law would mandate no-address properties be reported to the states of primary corporate offices of the businesses holding the funds. The proposed changes would allow the Unclaimed Property Division to accept the funds.
Mr. Start addressed the context in which the statute arose. The provisions would apply to cases which involved dividends and interest payments handled by large brokerage firms and the Depository Trust Corporation. He explained at the end of each trading day, thousands of transactions occurred where the last known addresses and names of the owners had been lost. In the past, the funds had been claimed by the state of New York. Recently, the Supreme Court had decided the funds would be split between New York and Delaware. The states did not feel this was equitable because, if the last known addresses of the owners were known, the issuers of the securities behind the dividends and interest payments would also be known. He contended the funds should be reported to the states of the issuers of the securities behind the dividend and interest payments. In anticipation of changed federal legislation, this would be accomplished. The new provisions would allow the states to claim the funds.
Mr. Sader surmised there were several million dollars involved in the transactions. Mr. Start noted New York had alleged collecting $9 million. The amount of money which might have been collected by Nevada was unknown.
To further clarify the situation, Mr. Doug Walther of the Attorney General's Office, presented an illustration where the state of Nevada might issue bonds to finance projects. If there were interest payments on those bonds which happened to get lost in the process, and no identifiable owner had been located, under the recent Supreme Court ruling, the unclaimed money would go to Delaware as this would have been where the company holding the money had been incorporated. It was anticipated there would be legislation which would distribute the funds to the states which held the most fair connection with the money which would be the states where the obligations were held. The funds would indirectly benefit the states through improvements. Mr. Walther contended S.B. 226 would assist in claiming the funds should Congress act on the matter.
There being no further testimony, Chairman Sader closed the hearing on S.B. 226. He opened the hearing on S.B. 75.
SENATE BILL NO. 75 Requires division of child and family services of department of human resources to take certain actions if powers and duties relating to investigation of prospective adoptive home are assigned to division.
Mr. Brad Bodeau, intern to Senator Diana Glomb, read a prepared statement to S.B. 75, Exhibit C. Chairman Sader noted S.B. 75 had been initiated by the Interim Committee on Adoption matters.
Mr. John Sarb, Administrator, Division of Child and Family Services, testified in support of S.B. 75. According to Mr. Sarb, the provisions were current policy. The testimonies heard before the Interim Committee suggested the ability of prospective adoptive parents to hear and respond to adverse information which pertained to them during the course of the home study had been an important enough point, it should become a matter of law and not agency policy.
There being no further testimony to come before the committee, Chairman Sader closed the hearing on S.B. 75. He opened the hearing on S.B. 234.
SENATE BILL NO. 234 Requires department of parole and probation to approve or assist in development of plan for placement of prisoner released on parole.
Mr. Robert Bayer, Operations Supervisor, Nevada Department of Parole and Probation, testified in favor of passage of S.B. 234.
He stated the amendment to NRS 213.140 served to clarify the release process once inmates had been granted parole by the parole board. The current law allowed the parole board to consider and authorize inmates' parole releases. The proposed amendments to S.B. 234 would clarify inmates would not be released without an approved plan which would provide for the support and resource to give them decent chances once released on parole. Mr. Bayer alleged the bill would also insure greater safety for the community. The plan would build responsibility and accountability to the department and assure the inmates would be placed in appropriate programs.
Mr. Gibbons asked if the parole plan was a prerequisite to parole itself. Mr. Bayer replied affirmatively. He noted the inmates would not be released until the plans had been developed. The parole board would specify release upon the approved programs.
Nancy Tiffany, Operations Supervisor, Nevada Department of Parole and Probation, stated she was in charge of the pre-release program. She noted the department had held inmates in cases where their programs had not been approved. There had been some question as to whether the Parole and Probation Department had the authority to deny inmates' release due to the law passed during the previous session which mandated inmates could not refuse parole. If granted parole, the inmates were required to leave the prison system. S.B. 234 would clarify prisoners would not be released until plans had been approved.
In reply to Mr. Toomin's inquiry, Ms. Tiffany stated inmates plans went to the parole board for review and determinations were made as to whether or not parole would be granted. The plans were investigated to assure they were acceptable. As Mr. Toomin understood, when plans were turned down by the parole board, the inmates would be assisted in developing an alternate plan.
In reply to Mr. Carpenter's concern, Ms. Tiffany noted it was the responsibility of the Department of Parole and Probation to investigate and approve the inmates' plans. Mr. Bayer interjected and stated the Department of Parole and Probation reviewed the programs and ascertained if the plans were viable. The plans would be approved based on the investigation of the submitted programs.
In response to Mr. Anderson's inquiry, Ms. Tiffany stated during calendar year 1991 and the first three quarters of 1992, 24 inmates exhibited serious problems. During calendar year 1992, approximately 1,900 inmates had been paroled.
Mr. Haller addressed S.B. 234, Section 1, line 6 which alleged the parole board could parole inmates whether they provided a plan or not. He pointed out inmates might conceivably realize they could be paroled without a plan. According to Mr. Haller, this provision nullified the legislative attempt to free up prison space by placing inmates on parole.
As the person in charge of the parole revocation process, Mr. Bayer stated he would ask for parole revocations on those inmates who refused to outline plans as this was the only process which would take statutory time. It was the intent of the legislation to use this for extending the time of incarceration if the inmates refused to submit programs. He contended if parole was revoked in one circumstance, the other prisoners would take note and develop plans.
Mr. Bonaventura asked how many days would S.B. 234 add to the incarceration time. Mr. Bayer replied the provisions should not add extra time to the prison terms. Mr. Bonaventura asked how much time were inmates held over in cases where parole was revoked. In response, Ms. Tiffany noted problem inmates, such as sex offenders and child offenders, averaged several months because they could not be placed into homeless shelters as they were required to be placed on house arrest. Other offenders were instructed to enlist the services of the salvation army or the missions.
According to Ms. Tiffany, S.B. 234 would protect the department from litigation. She surmised inmates without plans remained incarcerated an average of two months longer while appropriate programs were developed.
Ms. Pat McGaffen, Nevada Department of Prisons, informed the committee she was directly involved in the inmate program process. The Department of Prisons presently had 234 inmates who were eligible for release, but had not been released. S.B. 234 would authorize the Department of Parole and Probation to assist inmates who had not developed plans. She noted many inmates had been incarcerated for felonies in Nevada and did not have any resources within the state. Due to the critical overpopulation in the state prison system, the provisions would mandate the Department of Parole and Probation to assist inmates in compiling viable programs with the purpose of expedient release.
Mr. Toomin stated it appeared to be a redundant exercise to request inmates to develop plans and then be turned down for parole. He asked why the department did not ask for the inmates' plans initially rather than wait until the inmates were eligible for parole and were turned down because the plans were insufficient. Ms. McGaffen stated she would be in favor of requiring inmates to submit a plan in the beginning. Mr. Toomin pointed out the concept had not been addressed in S.B. 234. Ms. McGaffen stated the concept of getting involved with the inmates earlier in their program had been discussed with the Department of Parole and Probation.
Chairman Sader stated he would form a subcommittee to effect a solution to the issues as it appeared some committee members were not satisfied with the testimonies brought before them. He appointed Mr. Anderson, Mr. Toomin and Mr. Haller to the subcommittee.
There being no further testimony to come before the committee, Chairman Sader closed the hearing on S.B. 234. He opened the hearing on A.B. 325.
ASSEMBLY BILL NO. 325 Makes various changes to procedure for summary eviction of tenant.
Ms. Christina R. Giunchigliani, Assemblyman, District Number 9, was the prime sponsor for A.B. 325. Her desire was to assure the bill did not restrict the landlords' ability to evict known drug users or persons involved in gang or criminal activities. Her concern lay with the recognition of the underlying social problems which could occur with unwarranted evictions such as homelessness and poverty.
Ms. Giunchigliani presented "Letters of Support for Various Provisions of Proposed A.B. 325", Exhibit D which contained various correspondences from Las Vegas Mayor Jan Jones, the Homeless Coalition, the Salvation Army, the Catholic Community Services and others who had noted concern and support. [Copies of correspondences contained in the "Letters of Support for Various Provisions of Proposed A.B. 325", Exhibit D, are archived in the Legislative Library.]
Ms. Giunchigliani contended it was difficult for evicted tenants to contact social service agencies for assistance in meeting rent payments within the five-day notice period. She stated the five-day notice period was, in reality, eight days as one day was required for notification and weekends were not counted as part of the notice period. She felt changing the statute to allow for a ten-day notification period was fair and equitable. She alleged some landlords provided a five-day grace period to pay the arrearage and would then administer the five-day notices. She agreed it was imperative to consider the language when amending A.B. 325.
To codify her point, Ms. Giunchigliani stated, after families had been evicted, it was difficult to raise required security deposits. The former deposits were usually non-refundable and lost upon eviction. Evicted families often did not have money for rent or relocation. For this reason, she requested changing the 24-hour notice provision to a 48-hour notice. She stated the problem of homelessness could be compounded if tenants were not permitted proper due process which, she contended, was the intent of the bill. Ms. Giunchigliani alleged the current statute was inappropriately and inconsistently applied by some justices of the peace. It was her intent A.B. 325 clearly define the procedure.
Ms. Giunchigliani stated A.B. 325 affected approximately three to five percent of all cases. Anywhere between 93 to 95 percent of the cases would come under the summary eviction law. She contended it was the three to five percent who were the most vulnerable. The concerned parties wanted assurance they would be given proper notification to pay the rental arrearage and be afforded the opportunity to present their testimonies before judges in a timely manner.
Mr. Ray Rodriguez, Directing Attorney, Nevada Legal Services, stated he provided civil legal services to low income individuals. Last year, Nevada Legal Services provided civil legal services to individuals in 2,500 landlord-related cases. He summarized A.B. 325 would return the law to the original intent and purpose of the summary eviction process. He alleged the bill would put landlords and tenants on an even playing field. He proposed A.B. 325 would help relieve homelessness by giving tenants a minimal extra time within which to come up with rental arrearage.
Mr. Rodriguez believed there was unequal application of the law in the state. He contended homelessness was caused because evicted tenants could not come up with enough money to move into other residences. Most rental units required security deposits and first months rent, and in some cases the last months rent was required.
Mr. Rodriguez addressed A.B. 325, Section 1, subsections (a) and (b), lines 1 through 10, including line 24. Prior to 1967, landlords could evict tenants through the formal unlawful detainer process which was lengthy. Landlords appealed to the legislature and requested shorter eviction processes. The legislature mandated the summary eviction process. Essentially, summary eviction processes were designed to allow landlords an adequate, speedy remedy to evict tenants in cases with no disputes. Mr. Rodriguez added what should have happened, tenants should have been permitted to file affidavits claiming their disputes upon the filing of the tenants' affidavits. The courts would dismiss the summary eviction proceedings and would require the landlords to file unlawful detainer. A.B. 325, Section 1, lines 1 through 10, and line 24, would bring the intent of the statute back.
Mr. Rodriguez provided the "Nevada History of Eviction Processes", Exhibit E, exhibit 2, which summarized the history of the summary eviction process. He referenced the formal unlawful detainer process wherein landlords were required to file a Notifications of Summons and Complaint. Tenants had 20 days in which to reply and proceed on to trial during which time decisions would be made on the merits. Most importantly, appeals could be made in the event the judges made the wrong decisions.
Mr. Rodriguez explained, in the summary eviction process, tenants received five-judicial-day notices which translated into eight calendar days. During that period, tenants were required to file affidavits. The courts scheduled hearings. If the courts determined the affidavits of the tenants were truthful and sufficient, the judges dismissed the cases. If the cases were not dismissed, within 24 hours, the tenants were evicted. In theory, this worked but it was not what was happening. Mr. Rodriguez proposed amending A.B. 325, Section 1, line 1 through 10, and line 24, to retain the original language. He asked if there was a legitimate dispute contained in line 6. He asked if A.B. 325, line 24, addressed whether or not tenants had raised a legal or equitable defense.
Mr. Rodriguez briefly outlined the history of A.B. 325. The landlords had come before the legislature and had been granted three-day notices for eviction. In 1969 the legislature granted five-day notices. If tenants filed affidavits, the evictions would automatically be dismissed. He referenced Exhibit E, exhibit 3, which was Senator Bryan's testimony. The testimony which covered what he believed should be contained in the tenants' affidavits. Senator Bryan's interpretation of the provision read, "the affidavit filed by the tenant does not raise a proper defense", Exhibit E, exhibit 3.
Essentially, Mr. Rodriguez continued, the tenants were evicted when the affidavits did not raise proper defenses. He alleged this was the intent of the law and was not what was happening. What was happening, he contended, was the requirement of proof of legal defenses. Mr. Rodriguez alleged some courts in rural areas were requiring hearings with trials and only five days notice for tenants to prepare. The intent of the statute was to simply get the cases dismissed.
Mr. Rodriguez referenced Exhibit E, exhibit 4, which outlined the eviction process. He contended almost every case in Nevada had been brought before the courts as summary evictions. 5,000 evictions had been filed in Reno and of these 16 cases had been unlawful detainer. He added 1,000 evictions had been filed in Carson City with 34 unlawful detainer.
As the system currently worked, Mr. Rodriguez believed the decisions had leaned in favor of the landlords. Statistics revealed 90 percent of the cases brought before the courts were non-payments. In 14 percent of the cases the tenants filed affidavits. He surmised landlords did not want to be placed in situations where tenants abused the system by filing affidavits simply to attain more time. In reality, he alleged this was not happening as only 14 percent of the time tenants had filed affidavits. Landlords in Las Vegas won the cases 96 percent of the time. In Reno, landlords won the cases 98.5 percent of the time and in Carson City, 98.7 percent of the time.
Mr. Rodriguez argued the legislature had established the defenses tenants could raise. NRS Chapter 118 A provided for the tenants' ability to repair dwellings and deduct the costs from rent payments. It allowed tenants the ability to claim defenses based on landlords' warranty of habitability. Tenants could argue they did not get proper notices of eviction or landlords inappropriately raised rents. According to Mr. Rodriguez, these defenses were not happening.
Mr. Rodriguez referenced 42 contested cases, Exhibit E, exhibit 5, "Observation of Forty-two Contested Evictions in Las Vegas Township." Out of the 42 contested cases, 34 tenants had been evicted and six cases had been dismissed. In these cases, tenants had been allotted an average of 150 seconds to protect their tenancy.
Under Exhibit E, exhibit 6, in Las Vegas, if tenants' affidavits did not state they tendered their rent, the evictee would not receive hearings. The law currently mandated tenants who filed affidavits would receive hearings. The courts in Las Vegas did not adhere to the law, according to Mr. Rodriguez. Litigation had been filed in a Las Vegas district court to effect a temporary restraining order which would bar judges from acting in this manner. He noted, in the rural communities, judges conducted full hearings without tenants having the opportunity to present full cases.
Exhibit E, exhibit 7, was a written testimony of a client of Mr. Rodriguez'. In this scenario a tenant had been paying the landlord's electric bill. The landlord moved to evict and she had been evicted under the summary eviction process. Exhibit E, exhibit 8, was the judge's order in the summary eviction process. The tenant lost because she had not proven a legal defense. Mr. Rodriguez contended tenants were not required to prove legal defenses. Tenants were required to raise legitimate disputes before judges could dismiss the cases. According to Mr. Rodriguez, these types of cases happen in approximately 70 percent of the cases where tenants filed affidavits in contest.
Mr. Rodriguez suggested amending A.B. 325, line 18, which would change the notice period from five days to ten days. He contended landlords might argue the provision would add five days to the process. In reality, it was five judicial days which was eight calendar days. He proposed to increase the statute from eight days to ten calendar days which would increase the time by two days. He was willing to amend the proposal to provide for a statutory grace period and a five-day notice after that.
Mr. Sader asked where the statute addressed judicial days. Mr. Rodriguez noted, any notice period less than seven days was, by law, required to be judicial days. The five-day-notice period, which was less than seven days, meant it was five judicial days, not five calendar days. Mr. Rodriguez alleged this was court rule. Mr. Sader noted this was part of the Nevada rules of civil procedures.
Mr. Scherer noted the Supreme Court case which applied the rule of civil procedure in the context of a workers compensation case. He assumed the justices of the peace had applied this in the Nevada Supreme Court decision, although it had been in a different context. The rule did apply in interpreting the statutes.
Mr. Rodriguez referenced Exhibit E, exhibit 9, "Other States Time Frames (Uncontested Cases)" which provided the comparisons of other states. He pointed out the summary eviction process where the tenants had five judicial days which translated into eight days. On the eighth day, if tenants had not filed an affidavit by noon, the landlords could be in the court office by 1:00 p.m. and obtain orders of eviction which could be executable within 24 hours. He alleged the process took eight days and was the shortest process of any state.
Mr. Rodriguez suggested amending A.B. 325, page 2, line 14, from two days to 48 hours to vacate. He pointed out other states listed on Exhibit E, exhibit 9, provided for longer periods of time in which to vacate: California allowed five days, Arizona permitted five days plus the weekend and Oregon authorized three judicial days. He noted tenants on limited incomes required time to locate missing checks. It took time for tenants who lost jobs to regain viable employment.
Mr. Rodriguez requested amending NRS 40.300 referenced to on pages 4 and 5 and referred to the temporary writ of restitution contained on line 11 and in lines 21 through 26. Under the unlawful detainer process, landlords had the ability for expedient action. Landlords could file a Summons and Complaint, as well as temporary writs of restitution which would allow them to retrieve their property while litigation was pending. He asked A.B. 325 be amended to provide the courts some direction on the temporary writs. He asked for standard equivalents to preliminary injunctions. The provisions in the statute would allow landlords an effective process to evict unwanted tenants without court appearances.
Mr. Rodriguez added the provisions contained in A.B. 325, page 5, line 23, Section 4, subsection 4, would eliminate the use of writs in mobile home evictions. According to Mr. Rodriguez, in Las Vegas, when landlords evicted tenants from mobile home parks, they used the unlawful detainer process because they could not use the summary eviction process. Landlords would utilize the temporary writs of restitution and would be granted them. He noted the letter from the Mobile Home Association of Tenants contained in Exhibit E which strongly opposed this process.
Mr. Ernest Nielsen, Washoe Legal Services, testified in favor of passage of the bill. A.B. 325, Page 3, Section 2 amended NRS 20.254. The effect would prohibit subsidized housing evictions from going through the summary eviction processes. Mr. Nielsen noted NRS 20.254 was the gateway through the summary eviction process for tenants in rental arrears. He alleged the bill would have a restrictive effect as the proposed amendments would not affect cases where tenants were in arrears.
Mr. Nielsen noted A.B. 325 would affect subsidized landlords as cash streams of $400 or $500 per month were guaranteed by federal mandate. Congress protected subsidies as the only way landlords could evict subsidized tenants would be for cause. Landlords had to prove tenants were in violation of the contracts between the landlords and the tenants. The federal property right also guaranteed tenants the constitutional right of due process. He maintained subsidized housing was governed by different federal and state regulations.
Mr. Nielson pointed out, in the summary eviction processes, judges determined the truthfulness and sufficiency of the affidavits submitted. He alleged tenants had 150 seconds to provide cases and there were no appeals. He claimed the lack of review allowed judges to substitute the plenary processes for what use to be summary processes except there were no due process guarantees and appeals.
Mr. Nielsen maintained the plenary process described in NRS 40.290 to NRS 40.420 was preferable to the summary process when addressing subsidized tenants, not in terms of the procedures, but of the magnitude of the impacts on the cases. This also addressed landlords who would lose cash streams in the amount of $400 to $500 a month. He noted Washoe Legal Services would be willing to eliminate the exclusion if provisions were inserted which would help clarify standards for determining legal defenses. He suggested providing language in the statute which would reconfirm the summary processes was a screening mechanism to eliminate frivolous cases.
Ms. Despina Hatton, Attorney, Reno Senior Citizen Law Center, testified in favor of A.B. 325. She addressed problems senior citizens in subsidized housing faced with the eviction process. These were not cases where tenants were in arrears of rent payments, but situations where individuals were allegedly in breach of their leases and denied their rights to due process hearings. She claimed her clients were being evicted for nuisance types of situations. Senior citizens on fixed incomes were losing subsidized housing and being forced into market rate rentals.
In addition to the economic problems senior citizens were faced with, Ms. Hatton addressed the psychological and emotional trauma senior citizens experienced when evicted and relocated. Senior citizens also lost their support system such as friends and neighbors. Senior citizens were difficult to reorient and they often became confused and unhappy. She urged passage of A.B. 325 to ensure low income seniors would be entitled to due process.
Ms. Giunchigliani stated the proposed amendments to A.B. 325 would change the five-day judicial days to ten calendar days. The provisions would also change the 24 hour period to a 48 hour period. The bill would also codify the original intent of the legislature which was summary evictions would be screening processes. She continued, where legal issues were raised, judges would place the cases under the unlawful detainer processes.
Mr. Haller referenced NRS 118 A which addressed apartments, and NRS 118 B which pertained to mobile home parks. In response, Mr. Rodriguez stated the proposed changes were contained in the eviction statutes. These were the procedural statutes which provided the guidelines as to how tenants would be evicted. He continued NRS 118 A and NRS 118 B were substantive law statutes which provided rights to both tenants and landlords. The statutes did not discuss the eviction processes but addressed the rights of each party.
As a landlord, Mr. Schneider stated his experience with evictions of tenants was largely the result of nonpayment of rents. He did not see where the provisions contained in the bill would assist the landlords. In cases where landlords were subsidizing tenants, he asked would A.B. 325 provide for resubsidizing the landlords. He believed landlords would be adversely affected by the proposed changes in the law.
Mr. Schneider referred to the "Letters of Support for Increase of Eviction Time Frames to 10 Days," addressed by Mr. Rodriguez, and contained in Exhibit E. [Copies of the correspondences contained in the "Letters of Support for Increase of Eviction Time Frames to 10 Days", Exhibit E, are archived in the Legislative Library.] He alluded to Mr. William Cottrell's letter dated March 25, 1993 Exhibit D which stated "the proposed amendments seem to mean that any time a tenant files an affidavit which only alleges a legal or equitable defense (whether or not such is actually applicable), the property owner (either private or public) would be denied an eviction without first prosecuting a trial which could include a jury and would, as a practical matter, require both sides to retain and be represented by counsel." Mr. Schneider added the correspondence implied the bill would probably extend the eviction notice to 30 days for nonpaying tenants. He read further, "We believe another side effect of the proposed changes would be a reluctance on the part of private owners to make dwelling units available for the federally-assisted housing programs. Given the fact that about two thirds of the totally assisted dwelling units are in the private sector, this could have a very serious effect on our ability to provide safe, decent and affordable housing to low-income residents." He continued to reference Mr. Cottrell's letter, "For the reasons set out above, we believe A.B. 325 should be substantially revised, if it is to be enacted at all". Mr. Schneider pointed out this was a letter of support from the largest subsidized housing landlord in the state who was opposed to the provisions in A.B. 325, although in context, he supported it.
In reply, Ms. Giunchigliani stated she was attempting to ensure the Judicial Committee heard all concerns. She agreed some of the letters had raised objections which she acknowledged were legitimate. This was the reason she was willing to work with them. Her objective was to insert language into A.B. 325 which would specify the due processes in subsidized housing cases.
Mr. Rodriguez concurred with the statements presented by Mr. Cottrell in his correspondence. Ms. Giunchigliani maintained the Las Vegas Housing Authority did not bring about summary evictions in subsidized housing cases but used unlawful detainer. To get unwanted tenants out of the units quickly, the Las Vegas Housing Authority brought about writs of restitution.
In reply to Mr. Carpenter's concern, Mr. Rodriguez maintained tenants in rural areas did not have sufficient time to prepare cases, particularly in subsidized tenancy cases where proof needed to be established. The summary eviction processes would be simple as the courts would determine whether or not tenants had raised adequate defenses. Full hearings would not be required to ascertain whether or not tenants had proof in their legal defense. At present, in the rural areas, full hearings were being conducted when tenants did not have the appropriate time to prepare for their cases.
Mr. Petrak, a mobile home owner, had never recalled a situation where a landlord had moved a mobile home out of a park due to the tenant's failure to pay the rent. The Homestead Exemption Act protected seniors. He alleged liens could be levied against properties although he never observed a conviction. As Mr. Rodriguez understood, in cases of mobile home evictions, there were interim writs of restitution issued. In Las Vegas, Homestead Acts did not protect against judgments. Landlords were able to execute upon the mobile homes to secure rental arrearage. In these cases, the mobile homes were not moved but went through the selling process.
Mr. Petrak noted, in the northern part of the state, Homestead Acts were not effective against judgment liens, therefore, more liens had been filed in attempts to transfer ownership from the parks. In reply to Mr. Petrak's inquiry, as Mr. Rodriguez understood, there were 142 mobile home owner evictions in Las Vegas. He continued, in the northern part of the state, mobile home owners were not evicted because landlords were required to go through lien processes where they would secure mobile home allotment liens against the owners. Mobile home park owners would execute upon the liens if the owners of the mobile homes did not pay rental arrearage.
Mr. David Frazza, Executive Director, Nevada Apartment Association, testified in opposition to the passage of A.B. 324. The association represented 600 members and 70,000 rental units in southern Nevada. Mr. Frazza maintained the bill would not solve the homeless problem in the state by extending the eviction notice from five days to ten days as other issues were the cause of homelessness. He contended, extending the statutes by five days would prevent landlords from collecting or taking back possession of properties.
Mr. Frazza stated the only way residents could file affidavits would be if they could prove they attempted to pay the rent. He claimed the excuses tenants had which were considered in A.B. 325, had been identified and spelled out in other statutes. He contended, in cases of disputes where tenants had tried to pay their rent, they should receive hearings. If agreements had been made where tenants would make repairs to the units in lieu of partial payment of rent, and were later ordered to pay the full rental amounts, hearings should be conducted. When tenants did not have the rent money and requested hearings, this should be addressed under other statutes.
Mr. Frazza addressed the proposed changes in A.B. 325 to increase the eviction time from 24 hours to 48 hours. He contended the bill would actually change the actual 24 hours to four days as the language was interpreted. He maintained there was less direction in the proposed legislation. He believed the proposed changes would not solve the problems addressed but would create more. Mr. Frazza provided a bound copy of the Rental Law in Nevada, A Laymans Description, Exhibit F.
Mr. David Morton, Executive Director, Reno Housing Authority, testified in opposition to A.B. 325. He alleged the housing authorities in the state were opposed to the bill, particularly to the provisions which pertained to subsidized housing. He presented a copy of the Reno Housing Authority 1991 Annual Report, Exhibit G. He clarified when tenants' subsidized rentals were terminated, housing assistance would be terminated by the housing authorities under separate actions. Evicted tenants could take their housing assistance and apply it to other units. He alleged the protection against abuse were already contained in the statutes.
Ms. Gayle Brooks, Attorney, Reno Housing Authority, testified in opposition to A.B. 325. She alleged the premise of the bill would be for only three percent of the cases as the majority of the eviction cases would be under the summary of eviction proceedings. According to Ms. Brooks, this was not what the bill stated. A.B. 325 mandated the summary of eviction proceedings would be an extraordinary remedy which would be used when there were no legitimate disputes. The provisions placed the decisions with the landlords as to whether or not tenants had legitimate disputes. She asked how the landlords would decide whether cases would come under the plenary proceedings or the summary of eviction proceedings. She maintained landlords could not make those decisions. This was the reason the current legislation mandated courts would determine whether or not there were legal defenses. The preamble to A.B. 325 imposed the burdens on the landlords and was impossible.
Mr. Sader inquired as to whether or not Ms. Brooks agreed they referenced court days and under the proposed changes it referred to calendar days. Mr. Brooks stated the proposed changes would not affect the Reno Housing Authority although it would affect the private sector landlords. She concurred the bill alluded to five judicial days.
As Ms. Brooks understood A.B. 325 to read, tenants had 48 hours to voluntarily vacate. If, at the end of 48 hours the tenants had not vacated, the orders of eviction had to be obtained which was a longer process. She alleged, under most circumstances, this would not be a problem although it would be in cases where tenants who appeared before the courts had been involved in gang activities, drugs, or problems with other tenants. The law provided 48 hours, after which the landlords could obtain another order to evict. The statute should not take away the ability to evict tenants under emergency situations within 24 hours.
Ms. Brooks requested deletion of the language in A.B. 325 which allowed the courts to determine whether or not legal defenses had been raised. The proposed statute read whether or not tenants had stated legal or equitable defenses. There did not have to be any merit to the legal defenses. She contended there did not have to be any determinations made by the courts as the defenses had to be applicable to the situations. All tenants had to do would be to state their defenses. She maintained tenants would abuse the provisions as they could state legal defenses, file affidavits which stated legal defenses, and the entire summary of eviction process would be dismissed. The landlords would be required to bring plenary proceedings. This, according to Ms. Brooks, was the most serious change to the summary eviction proceedings. The provisions took away any determinations made by the courts and left the determination in the hands of the tenants to decide whether or not they wanted to file affidavits which would state legal defenses and automatically buy themselves more time.
Ms. Brooks addressed the proposed amendment to A.B. 325 where subsidized tenants would be exempted from the summary eviction proceedings. She alleged this provision would not be good for subsidized tenants. There would be problems in this provision, particularly for the private sector landlords. Private landlords who provided the dwelling units and were reimbursed for the portions not paid for by the subsidized tenants would be mandated to evict under the plenary proceedings. They could not use the summary eviction proceedings. She feared a loss of landlords due to this process. Replacement landlords would probably be undesirable. The rationale for taking the housing authority out of the summary eviction proceedings was because the statute did not provide for due process. Ms. Brooks did not feel this was the case. Due process directed tenants receive federal or state notices of eviction. She continued the summary evictions did provide due process. Subsidized tenants did not need to be exempted from that process.
Ms. Brooks addressed further amendments to A.B. 325 which required serving two notices which meant law enforcement officers would be required to serve the evictee twice. She alleged this would hurt the tenants as they would be responsible to pay the fees for two services. Should the amendments be adopted, there would be the plenary proceedings for subsidized tenants. The plenary proceedings allowed for shortening the time within which to answer eviction notices. The normal 20 days to reply could be shortened in recognition the landlords had to deal with nonpayers or disturbances, etc. As the statute read, tenants could not be evicted in less than 20 days. She noted plenary proceedings were approximately 50 days in circumstances where 30 day notices had been served. In cases of 30 day notices, the 30 days would be added to the minimum 20 days in which to answer. If in the plenary processes, notices in which to set trials had to be ten days. Under circumstances which entailed private landlords and plenary proceedings, there was a minimum of 40 days. She maintained, for subsidized housing, there was a minimum of 40 days, plus the 30 days under the federal notice to vacate. Under plenary proceedings, tenants had the right to jury trials. In justice courts, there would be additional thirty days for jury.
Ms. Brooks addressed the issue which pertained to the temporary writ of restitution amendment. Under the current statutes, the courts had the discretion in emergency situations to authorize temporary writs of restitution. Under the proposed amendments, there would be a minimum of 20 days and it did not matter what kind of emergency ensued. She alleged proposed changes in A.B. 325 would create serious problems.
Ms. Pam Bowsher represented the Bigelow Companies, who were in opposition to A.B. 325. She stated the Bigelow Companies owned and operated approximately 3,500 apartment units in Las Vegas. She stated there were better ways to prevent individuals from becoming homeless which would not affect the landlords. The weekly rentals provided low income housing. She alleged the provisions in the proposed amendments would nullify the ability to offer this type of housing.
Ms. Vikki Morely, Bigelow Management, testified in opposition to A.B. 325. She presented testimony on the effects passage of the bill would have on the low-income weekly rentals. She maintained her management firm was required to process through the five day process on weekly tenants who did not pay rent. The landlords would be stuck with the tenants for three weeks. There were approximately 12,000 weekly units in Las Vegas which provided a needed service to the mid and lower-income tenants. According to Ms. Morely, the legal process took 15 to 20 days. The weekly tenants paid rent in one week increments and there were no deposits and no first and last months rent. The weekly rates included furniture, utilities, telephone and TV.
Ms. Morely stated there were no security deposits to offset the five-day notices. She contended if one week was added to the nonpayment process, it would kill the weekly business and force them to charge significant deposits. As a result, this would affect the homeless situation. The Bigelow Companies would like to amend A.B. 325 so weekly residents could receive two-day notices, then proceed through the normal process. She pointed out, after tenants resided on the property for 30 days, they became monthly residents. Motels did not require the eviction process. She argued the proposed amendments were unfair to the weekly landlords.
Mr. Neil Dexter, property owner, Ty-De Development Co., spoke in opposition to A.B. 325. He presented Exhibit H to support his testimony and explained the impact the five-day notice would have if it were extended. He claimed there were more tenants who abused the system by paying one week's rent and received three weeks rent for nothing. He noted on one property he served 446 five-day notices. 80 percent of the tenants paid rent within a week. He made the observation when tenants were two weeks in arrears, he had a 99 percent chance of losing the money completely. The impact on the one complex was $129,000 in lost rent for one year. On another 90 unit apartment, his company served 527 five-day notices in one year which cost $142,000. The provision in A.B. 325 made it easier for tenants to leave. Another monthly apartment complex would cost his firm an estimated $40 to $50,000 per year in lost revenues should the bill pass. He noted there was a difference in the impact on weekly rentals versus the monthly rentals. He suggested a two-day notice for the weekly rentals.
Mr. Dusty Rhoades, Nevada Association of Realtors, spoke in opposition to A.B. 325. He cited a scenario where tenants had been in arrears and the problems with the eviction process. He was against further extension of time notices to tenants.
Mr. John Genzler, Gold Dust Properties, testified in opposition to A.B. 325. He stated there were approximately 19,000 evictions conducted annually in the state. He queried how many of these evictions were the same tenants. He noted there were professional evictees who went from one property to another, mostly small units as they could not be screened as well.
In response to Ms. Smith's inquiry, Ms. Brooks stated if the evictions occurred after the subsidies had been terminated, and the tenants were being evicted for failure to pay rent, the landlords would not receive their portion of the rent from the tenants. In other words, landlords might receive $600 per month in rent. They might receive $500 of the total from the housing authority and $100 from the tenant. It could be possible the housing authority had paid the $500 and the tenant had not paid the $100.
In reply to Ms. Smith's inquiry, Mr. Rhodes stated in approximately five percent of the eviction cases he administered, he had recovered money. Normally, tenants did not go to court. Under the proposed statutes, he maintained it would be different. When tenants went to court, it was to extend the eviction period. When the evictions occurred, the landlords would be out of the rent. The recourse landlords often used was to file small claims actions against the tenants which would reflect on their credit rating.
Mr. Collins pointed out weekly rentals were taking in one weeks rent and losing three weeks revenues on nonpaying renters. Ms. Morely added should A.B. 325 be enacted, revenue losses would increase. As Mr. Collins understood, from the information contained in Exhibit I, there were approximately 7,500 weekly rentals. Ms. Morely alleged there were approximately 12,000 weekly rentals in Las Vegas.
Mr. Gregory understood the weekly rentals were under the same guidelines as rentals with 30 day or six-month leases. Ms. Morely replied this was true, provided the units were zoned as apartment communities. She added, when tenants became delinquent the second week, landlords were required to follow the guidelines. Mr. Gregory understood Ms. Morely to propose the five-day notice be decreased to a two-day notice for weekly rentals, although when tenants had stayed 30 days, they would revert to the five-day provision. Ms. Morley added, in the case of the weekly rentals, if the tenants could prove to the judges they had resided in the units for one week and had not paid rent, the tenants would fall under the two-day nonpayment provision.
Mr. Robert Nielson represented members of the Builders Association of Northern Nevada, who were adamantly opposed to A.B. 325. He alleged Irene Porter of the Nevada Home Builders Association had asked him to testify on behalf of the 850 members who were unanimously opposed to A.B. 325. He emphasized the last thing subsidized landlords wanted to do was to evict tenants as it cost rent money, rehab money, and down time between tenants. In all federally subsidized programs there was an arduous qualification procedure for tenants. He stressed, should A.B. 325 pass, corporations which dealt with subsidized rentals would have to hire attorneys every time they went to court. The incurred costs would be passed on to other renters, particularly tenants in the low income categories.
Mr. Kelvin McCarthy, President, Nevada Apartment Association, testified in opposition to A.B. 325. The Institute of Real Estate Management conducted a survey and found, in most cases, the tenants had a five-day grace period before eviction procedures were initiated. He estimated Las Vegas landlords lost approximately two percent to bad debts which would be a revenue loss of approximately $3,000 per month on a 250 unit apartment complex. This equated to $36,000 annual loss or a net decrease in valuation to the owner of the property of approximately $360,000. As chairman of the Nevada Apartment Association Occupancy Survey, Mr. McCarthy noted statistics on the market revealed there was an eight to ten percent vacancy rate in Las Vegas last year.
Mr. Robert Tarbox, independent apartment owner, testified in opposition to A.B. 325. He maintained the affidavits were ludicrous. He cited a situation where an affidavit had been filed on behalf of one of his delinquent tenants by a complete stranger. He alleged he had to go through the complete legal procedure. The individual who submitted the affidavit did not appear before the court. He cited the long, drawn out procedure he had to adhere to, after which the tenants resided in the apartment for 67 days rent free.
Mr. Tarbox cited NRS 40.253 (1) (b), there is no legitimate dispute of the landlord's right to regain possession of the leased premises sounded like the right to try title. He believed this provision would ask for the right to try title. He surmised this process would take from two and one half to three years of litigation to get property back.
Mr. George Peek, member of the Apartment Association, testified on behalf of himself in opposition to the bill. As a landlord, if A.B. 325 passed, he would refuse to accept subsidized. He was confident the current statute was acceptable. He noted he charged an application fee to obtain information on prospective tenants credit history to prevent tenancy problems.
Mr. Jon Sasser, Nevada Legal Services, testified in favor of A.B. 325. He based his stand on the out-of-state landlords who owned the majority of the rental properties in Clark County. He contended there had been misinformation presented in reference to the statute. In reference to the week-to-week landlords and tenants, a shorter eviction notice would not be a problem. He stated his concern regarding the prospects of the requirement to hire attorneys if they proceeded to the longer plenary processes. He proposed language which would devise a shorter and immediate process with certain time frames. The proposed amendments would not require the assistance of attorneys and would use court forms.
In terms of the mischaracterization of the law, Mr. Sasser noted an inconsistency and pointed out the misconception testified to earlier which was that the only defense which could be raised in a nonpayment summary eviction was whether the tenants actually paid the rent or tendered the rent. He alleged this was not the case as the law was clear in NRS 118 A, Section 490. Tenants could raise any counter-claim or defense in actions for possession for nonpayment of rent. The language was reflected in A.B. 325, Section 3, where the court determined whether the tenants had raised legal or equitable defense.
Mr. Sasser focused on a statement made by an opponent of the bill which alleged if A.B. 325 passed, all tenants would have to do would be to show up in court and state a defense, and that would be the end of the judges' inquiry. He contended the present language had not been changed which alluded the purpose of the hearings was for the judges to examine and determine the truthfulness and sufficiency of the affidavits of the tenants. He maintained judges were required to determine the affidavits were both true and sufficient to raise a legal defense.
Mr. Sasser noted the misconception raised when landlords proceeded onto the plenary process there would be a minimum of twenty days before writs of restitution could be applied. He alleged NRS 40.300 attempted to clarify the differences between a temporary writ of restitution and a permanent writ of restitution. Under temporary writs of restitution, landlords could apply immediately if there were dangerous situations. Under issuance of permanent writs of restitution, landlords would have to wait twenty days until an answer was filed.
In regard to the subsidized tenancies, Mr. Sasser noted there were different types of subsidies. Some subsidies were administered by housing authorities which required separate hearings to determine subsidy losses. Other subsidies were direct Housing and Urban Development subsidies which were granted to landlords who operated the projects. There were no separate hearings in the notices and processes did not apply to those. By federal law, regardless of whether there had been earlier processes required by federal law, there must be eviction court proceedings and they must meet the minimum requirements of due process.
Ms. Thelma Clark requested her correspondence be included in the record of the hearing on A.B. 325, Exhibit J. She urged passage of the bill.
There being no further testimony to come before the committee, Chairman Sader closed the hearing on A.B. 325.
Chairman Sader noted both proponents and opponents of A.B. 325 had presented testimonies. During the work session scheduled for April 9, 1993, the committee would decide whether the bill would be placed in a subcommittee or if the committee would take action.
There being no further business to come before the committee, chairman Sader closed the hearing at 10:55 a.m.
RESPECTFULLY SUBMITTED
Jessie A. Caple
Committee Secretary
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Assembly Committee on Judiciary
April 8, 1993
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