Governor Sisolak Announces End of COVID-19 Eviction and Foreclosure Moratorium

By Bob L. Olson and Richard C. Gordon

The COVID-19 pandemic has devastated much of Nevada’s economy. In order to provide some relief to Nevada residents and businesses, on March 29, 2020, Governor Sisolak issued Declaration of Emergency Directive 008 (“Directive 008”),¹ which among other things, prohibited residential and commercial evictions and foreclosure proceedings (the “Eviction and Foreclosure Moratorium”) until the earlier of termination of the state of emergency declared in Nevada on March 12, 2020 or termination by a subsequent emergency directive.  On April 8, 2020, Governor Sisolak issued Declaration of Emergency Directive 013 (“Directive 013”),² which among other things, provided that a violation of the Eviction and Foreclosure Moratorium “constitutes the use of coercion, duress, or intimidation in a transaction pursuant to NRS 598.0923(4).”  NRS 598.0923(4) is a provision in Nevada’s Deceptive Trade Practice Act. Thus, it is clear that landlords and lenders could suffer serious consequences if they violate the Eviction and Foreclosure Moratorium.

On June 25, 2020, Governor Sisolak issued Declaration of Emergency 025 (“Directive 025”),³ which terminates the Eviction and Foreclosure Moratorium in phases.  In general, commercial evictions and foreclosures can be reinstated or commenced on July 1, 2020.⁴ Residential evictions may generally be reinstated on September 1, 2020;⁵ however, in certain cases they may be reinstated on August 1, 2020.⁶  Residential foreclosures may be reinstated or commenced on September 1, 2020.⁷ Post-foreclosure unlawful detainer actions may be initiated or reinitiated on July 1, 2020.

A summary⁸ of the key provisions of Directive 025 regarding the termination of the Eviction and Foreclosure Moratorium is below:

Commercial Evictions

• Tenants are responsible for paying back rent that was not paid during the Eviction and Foreclosure Moratorium.  Directive 8, § 3.
• Landlords are not entitled to charge late fees from March 30, 2020 through June 30, 2020.  Directive 8, § 3, Directive 25, § 10.
• Landlords and tenants are encouraged to enter into repayment agreements.  Directive 25, § 3. If the tenant and landlord enter into a repayment agreement, the landlord shall cease any eviction proceedings.  Directive 25, § 4.
• All eviction notices, whether in connection with summary eviction actions or unlawful detainer actions, served on the tenant before March 30, 2020 in which the tenant did not file an answering affidavit in the summary eviction action or the landlord did not file an unlawful detainer complaint, are deemed stale and void.  Directive 25, §§ 9, 12.  In these cases the landlord must start over.
• All eviction notices, whether in connection with summary eviction actions or unlawful detainer actions, where the eviction notice was served on the tenant from March 30, 2020 through June 30, 2020 are deemed void.  Directive 025, §§ 9, 12.  In these cases the landlord must start over.
• Stayed commercial eviction actions may be recommenced on July 1, 2020.  Directive 025, § 11.
• Landlord’s may initiate or reinitiate commercial eviction proceedings on July 1, 2020. Directive 25, § 9.
• Landlords may exercise their remedies to change the locks on commercial premises as allowed by NRS 118C.200 on July 1, 2020. Directive 25, § 8.
• Post-foreclosure unlawful detainer actions may be reinitiated or initiated on July 1, 2020.  Directive 025, §§ 12, 14. 

Commercial Foreclosures

• Borrowers are responsible for payments not paid to the lender during the Eviction and Foreclosure Moratorium.  Directive 8, § 3.
• Lenders are not entitled to charge late fees from March 30, 2020 through June 30, 2020.  Directive 8, § 3, Directive 25, § 10.
• Lenders may initiate or reinitiate commercial foreclosures on July 1, 2020.  Directive 025, §§ 9, 11.

Residential Evictions

• Tenants are responsible for paying back rent that was not paid during the Eviction and Foreclosure Moratorium.  Directive 8, § 3.
• Landlords are not entitled to charge late fees from March 30, 2020 through August 31, 2020.  Directive 8, § 3, Directive 25, § 6.
• Landlords and tenants are encouraged to enter into repayment agreements.  Directive 25, §2. If the tenant and landlord enter into a repayment agreement, the landlord shall cease any eviction proceedings.  Directive 25, § 4.
• All summary eviction notices, whether in connection with summary eviction actions or unlawful detainer actions, served on the tenant before March 30, 2020 in which the tenant did not file an answering affidavit in the summary eviction action or the landlord did not file an unlawful detainer complaint, are deemed stale and void.  Directive 25, § 5.  In these cases the landlord must start over.
• All eviction notices, whether in connection with summary eviction actions or unlawful detainer actions, where the eviction notice was served on the tenant from March 30, 2020 through August 31, 2020 are deemed void. Directive 025, § 5.  In these cases the landlord must start over.
• Landlords may initiate or reinitiate summary eviction proceeding on August 1, 2020 for: (1) continued possession after the expiration of a lease’s term; (2) possession of leased premises who are tenants at will; (3) impermissibly assigning or subleasing the leased premises; (4) committing waste to the leased premises; (5) conducting an unlawful business on the leased premises; (6) maintaining a nuisance on the leased premises; (7) using controlled substances on the leased premises; and (8) failing to perform a lease covenant other than payment of rent.  Directive 025, §§ 5, 7.
• Summary eviction proceedings based on no cause or nonpayment of rent may proceed on September 1, 2020.  Directive 025, § 7.
• Post-foreclosure unlawful detainer actions may be reinitiated or initiated on July 1, 2020.  Directive 025, §§ 12, 14. 

Residential Foreclosures

• Borrowers are responsible for payments not paid to the lender during the Eviction and Foreclosure Moratorium.  Directive 8, § 3.
• Lenders are not entitled to charge late fees from March 30, 2020 through August 31, 2020.  Directive 8, § 3, Directive 25, § 18.
• Lenders may initiate or reinitiate residential foreclosures on September 1, 2020.  Directive 025, § 18.

Conclusion

Governor Sisolak’s Directive 025 brings relief to residential and commercial lenders and landlords and announces a phased ending to the COVID-19 executive protections afforded to individuals and businesses throughout Nevada during this unprecedented state of emergency. While Directive 025 strongly encourages landlords and tenants to enter into voluntary repayment agreements to address any payment arrearages caused by COVID-19, such agreements are not mandatory and will only have binding effect if agreed to by the parties.⁹ Absent such voluntary agreements, borrowers and tenants may now find themselves in breach of their contractual obligations as they once again face the legal consequences of eviction and foreclosure. While Directive 025 announces the phased ending of Directives 008 and 013, it is anticipated that the construction of these directives and their impact on both residential and commercial rental and mortgage contracts will ultimately be resolved by the courts and by the Nevada Attorney General in the months ahead.