Existing law provides that any provision in a written instrument relating to real property that is discriminatory, prohibits the display of the flag of the United States or prohibits or restricts an owner of property from obtaining solar or wind energy on his or her property is void and unenforceable. (NRS 111.237-111.2395) Section 1 of this bill prohibits, with certain exceptions, a service provider from entering into or recording a service agreement with an owner of residential property that provides for the performance of the agreement more than 1 year from the date of the execution of the agreement if the service agreement: (1) purports to run with the land or bind future owners; (2) allows for the assignment of the right to provide service without requiring notice to and the agreement of the owner; or (3) purports to create a security interest in the residential property. Section 1 provides that such a service agreement is void and unenforceable. Section 1 also: (1) provides that a county recorder may refuse to record such an agreement; (2) provides that any person who attempts to record such an agreement is guilty of a misdemeanor; and (3) authorizes persons with an interest in a residential property subject to such a service agreement to bring a civil action for equitable relief, actual damages and actual costs and attorney's fees. Section 1 further requires a service provider that has entered into a service agreement on or before the passage and approval of this bill to record a notice of the service agreement with the county recorder of the county in which the real property that is subject to the service agreement is located. If the service provider fails to record the notice, section 1 provides that the service agreement is void and unenforceable. Existing law defines various activities involving businesses and occupations that constitute deceptive trade practices. (NRS 598.0915-598.0925) If a person knowingly engages in a deceptive trade practice, the person may be subject to restraint by injunction and the imposition of civil and criminal penalties. (NRS 598.0979, 598.0985, 598.0999) Section 1 provides that a service provider who enters into or records such a service agreement prohibited by section 1 is engaged in a deceptive trade practice. Section 9 of this bill provides that the provisions of section 1 of this bill become effective upon the passage and approval of this bill. Existing law authorizes a person licensed as a real estate broker, real estate broker-salesperson or real estate salesperson to apply to the Real Estate Division of the Department of Business and Industry for a permit to engage in property management. (NRS 645.6052) A real estate broker who holds a permit to engage in property management is prohibited from acting as a property manager unless the broker has first obtained a property management agreement signed by the broker and the client for whom the broker will manage the property. (NRS 645.6056) Section 2 of this bill sets forth certain duties of a person who acts as a property manager when entering into a property management agreement and performing his or her duties pursuant to such agreement, including, without limitation, requiring the property manager to: (1) make certain disclosures to each party to the property management agreement; (2) exercise reasonable skill and care; (3) provide a form to all parties to the property management agreement disclosing the duties owed by the property manager; (4) seek a rental or lease of real property at the price set forth in the property management agreement; (5) advise the client to seek expert advice when needed; and (6) account for all money and property the property manager receives in which the client may have an interest. Section 3 of this bill revises the definition of the term “agency” to include a relationship arising out of a property management agreement. Section 6 of this bill prohibits a property manager from waiving any duty set forth in section 2. Section 7 of this bill authorizes a person who has suffered damages as the proximate result of a property manager's failure to perform any duty set forth in section 2 to bring an action against the property manager for the recovery of the person's actual damages. Existing law requires the Division to prepare and distribute a form to persons licensed as real estate brokers, real estate broker-salespersons or real estate salespersons which sets forth the duties owed by a licensee. (NRS 645.193) Section 4 of this bill also requires the Division to prepare such a form for property managers. Existing law provides that if a real estate broker assigns different licensees affiliated with his or her brokerage to separate parties to a real estate transaction, the licensees are not required to obtain the written consent of each party to the transaction. (NRS 645.252, 645.253) Section 5 of this bill provides that property managers affiliated with a brokerage who are assigned to separate parties to a property management agreement are also not required to obtain such written consent. Existing law provides for the licensure and regulation of title insurers, title agents and escrow officers by the Commissioner of Insurance. (Chapter 692A of NRS) Existing law prohibits a title insurer or underwritten title company from making certain payments to persons associated with real property as inducement or compensation for the placing of an order for a title insurance policy or for the performance of escrow services or other service by the insurer or company. (NRS 686A.130) Section 8 of this bill establishes administrative penalties for title insurers and underwritten title companies, and their employees or representatives, who violate the prohibition against providing such inducements.

Statutes affected:
As Introduced: 645.0045, 645.193, 645.253, 645.255, 645.257
Reprint 1: 645.0045, 645.193, 645.253, 645.255, 645.257
Reprint 2: 645.0045, 645.193, 645.253, 645.255, 645.257, 686A.130
BDR: 645.0045, 645.193, 645.253, 645.255, 645.257