2011 Nevada Legislative Changes to Commercial Tenancies

(AB 398 will take effect on October 1, 2011)

By Becky A. Pintar, Esq. and Airene Haze, Esq.

Prior to the enactment of AB 398 on June 4, 2011, there were no Nevada laws that dealt specifically with commercial landlord-tenant issues. Instead, the only governing law for landlord-tenant issues was NRS Chapter 40, which primarily deals with residential properties. AB 398 now creates a new chapter in Title 10 of the NRS relating solely to commercial tenancies.

Section 15.5: Jurisdiction

AB 398 provides that justice court has jurisdiction over any civil action concerning the removal of a tenant from commercial premises in which no party is seeking monetary damages. However, if a landlord combines an action for eviction and monetary damages, jurisdiction would depend on the amount of controversy.

Section 16: Abandoned Property

Landlord may now dispose of personal property, regardless of its character, with only 14 days of written notice to tenant by “certified mail, return receipt requested.” AB 398 also permits the landlord to recover “his or her reasonable costs out of the abandoned personal property or the value thereof.”

Exception: Vehicles must be specifically disposed pursuant to NRS Chapter 487.

Section 14: Unlawful Removal of Tenant:
AB 398 also addresses unlawful removal of tenants in commercial properties. Landlords may not remove:
• A door, window, attic hatchway cover;
• A lock, latch, hinge, hinge pin, doorknob; or
• Furniture, fixtures, or appliances supplied by the landlord, unless landlord removes the item for a bona fide repair or replacement, which must be promptly performed.

Moreover, a landlord may not shut off utilities for which the tenant pays directly to the
utility company, unless interruption is caused by construction, bona fide repairs, or emergency.


Section 14: Landlord Can Change Locks Without a Court Order for Eviction!

AB 398 now allows a landlord or its agent to change the locks on a commercial property, if tenant is delinquent in rent payment. No court order is necessary. The only requirement for the landlord to change the locks is to post a notice on the property for a minimum of 5 days, informing the tenant where the new keys may be obtained. The landlord is also allowed to demand all past-due rent prior to releasing the new keys to tenants.

If the tenant believes he was unlawfully removed by the landlord, he may file in justice court a verified complaint for reentry. A hearing will be scheduled and tenant is required to testify under oath to the court the facts of the alleged unlawful lockout. If the court reasonably believes that lockout has occurred unlawfully, the tenant will be required to post a bond in an amount equal to 1 month of rent and the court may issue a temporary writ of restitution.

If the landlord is found to have violated section 14, tenant may recover possession of commercial premises, recover actual damages, recover one month’s rent or $500 whichever is greater, and attorney’s fees and costs, less any delinquent rents.

On the other hand, if tenant is found to have testified in bad faith, landlord may collect the same damages, less any sums for which landlord is liable to the tenant.

Rental Agreement vs. Section 14 of AB 398

AB 398 specifically provides that a rental agreement supersedes section 14 of AB 398 in case of any conflicts. Therefore, it is important that landlords and tenants review their existing commercial lease agreements – or review proposed leases prior to entering into an agreement – in light of these recent changes in commercial tenancies.

AB 398 LEGISLATION LINK

 

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Nevada Legal Updates is published by Gibbs, Giden, Locher, Turner & Senet LLP as a service to clients and friends of the firm. The information contained in this newsletter is written by the firm's attorneys and is designed to provide information on general legal issues, new legislation, and recent legal developments; it should not be relied upon as legal advice. For specific questions about any of the matters discussed in this issue please contact the article attorney author or send an email to bpintar@gglts.com or ahaze@gglts.com. All readers should consult professional legal counsel to obtain advice on specific projects or matters. This publication may not be reproduced or used in whole or in part without written consent of the firm. 

City ordinance requiring hazardous buildings to have seismic retrofitting by a certain date did not insulate owners of an unreinforced building from negligence in failing to retrofit the building.

Case:
Myrick v. Mastagni (2010) 185Cal.App.4th1082,111Cal.Rptr.3d165
Case Digest Presented by Steven R. Cuneo, Jr., Esq. at the 17th Annual GGLTS Review Preview Seminar (2011)

Key Points:

1) Property Owners must use ordinary care in management of their property to prevent injury to others.

2) Compliance with a statute, ordinance or regulation ordinarily defines a minimum standard of care.

3) Accordingly, statutory compliance is not generally a defense to tort liability.

Digest:
In 1993, the Paso Robles City Council passed an ordinance requiring owners of specified buildings to retrofit those buildings within 15 years. In 1998, the City Council amended the ordinance and extended the deadline for compliance to 2018. On the morning of December 22, 2003, the San Simeon earthquake struck. Two women who worked in a retail store located in a 111-year old brick building in downtown Paso Robles fled into the street when the shaking started. Unfortunately, a portion of the building collapsed into the street in which they fled, crushing them. Surviving family members of the two women sued the building’s owners for negligence in failing to perform seismic retrofitting of the building. A jury found the owners negligent and awarded substantial damages. The jury also found that the owners were members of a joint venture in the ownership and maintenance of the building, making the defendant’s jointly and severally liable for the judgment award. AFFIRMED. On appeal, the building owners argued that the trial court erred in refusing to find that as a matter of law they had no duty to retrofit until 2018, the deadline established by the amended ordinance. The Court held that, in general, statutory compliance is a weak defense to a tort liability. This is because a statute, ordinance, or regulation ordinarily defines a minimum standard of conduct which does not preclude a finding that a reasonable person would have taken additional precautions under the circumstances. Defendants further argued that in passing an ordinance with a 2018 compliance date, the City Council ordinance inherently reflects a balance of safety, community interests and costs. The Court was unconvinced. While the city likely did take into consideration the interests of building owners, the overriding concern was that of public safety and reducing the risk of death or serious injury from seismically unfit buildings. To hold, as a matter of law, that a building owner has no duty until after the compliance date of the ordinance would frustrate the very policy that the ordinance was designed to promote. The Defendant’s also argued that the trial court erred in making the defendants jointly and severally liable for the non-economic damages. They argued that under Civil Code section 1431.2, the liability of each defendant for non-economic damages “shall be several only and shall not be joint.” However, the Court found that because the defendants were all parties to a joint venture, section 1431.2 did not apply.

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