Summary of Nevada Foreclosure Procedure—Commercial Loans

 

            Generally there are two statutory rights of reinstatement available to the defaulting borrower before a power of sale may be exercised after a breach of a deed of trust.  The first is a 35-day right of reinstatement.  The second is a 3-month right of reinstatement.  The time for the 35-day right begins to run upon the initial recording and mailing of a notice of default.  The time for the 3-month right begins to run upon the initial recording of the notice of default.  Notice of sale must be published (among other requirements) for three (3) consecutive weeks following the expiration of both such rights of reinstatement.  Thus, if all procedural hoops are complied with, a foreclosure sale theoretically could occur as early as 3 months plus 21 days after a borrower defaults.   From a practical standpoint, however, a 4-5 month window is more likely.  The statutory requirements are as follows.

 

            1.         Recording and Mailing of Notice of Default.  Upon default of a secured obligation, a trustee or beneficiary must first execute and record a notice of default in the office of the county recorder where the property is located (in this case, Clark County).  The notice of default must set forth the breach and the election to sell the property to satisfy the obligation and may further declare the intent to accelerate payment of the entire unpaid balance due, provided acceleration is permitted under the deed of trust.  N.R.S. § 107.080(3).  The notice of default and election to sell must be mailed to the grantor by registered or certified mail, return receipt requested with postage prepaid.  See N.R.S. §107.080(3).

 

2.         35-day Right of Reinstatement.  Commencing on the first day following recording and mailing of the notice of default, the borrower then has 35 days within which to cure the deficiency plus pay any costs, fees and expenses incident to the preparation, recording and enforcing of the deficiency.  If the borrower satisfies the foregoing obligations, no acceleration or foreclosure sale is permitted.  N.R.S. § 107.080(3).

 

3.         3-Month Right of Reinstatement.  Commencing on the first day following the initial recording of the notice of default (and usually concurrently with the running of the 35-day period above, assuming the notice is also mailed to the borrower), a 3-month reinstatement period begins to run.  If the grantor fails to cure the deficiency within the 35-day window described above, the trustee (or other person authorized with the power of sale) may accelerate the entire balance (if permitted under the deed of trust) and, if the borrower has not paid the accelerated balance plus associated costs before the expiration of the 3-month period, the trustee may sell the property following the expiration of 3 months.  N.R.S. § 107.080 (3).

 

            4.         Recording and Notice of Sale.  After the 35-day and 3-month periods expire, notice of the sale specifying the time and place must be recorded and also must be given by:

 

(a)        mailing or personally serving on the borrower (or other person entitled to notice);

(b)        posting in a public place in the town or city where the property is located for 20 successive days; and

(c)        publishing in a newspaper of general circulation in the county where the property is located once each week for 3 consecutive weeks.   N.R.S. § 107.080(4).

 

            5.         Additional considerations:

 

Gaming Assets and Premises.  When foreclosing on an operating gaming facility, including gaming devices, and to keep it operating, prior regulatory approval will be required.