Nevada legislators approved a bill to change probate laws and sent it to the governor’s desk this past weekend, after the Las Vegas Review-Journal found a cottage industry reaped paydays selling dead people’s homes through court but often didn’t make a dime for heirs.

The state Senate and Assembly both unanimously approved a measure that adds steps needed to take over a dead person’s estate. It also limits who can obtain court authority to sell homes in probate cases without a judge’s approval.

The measure was delivered on Sunday to Gov. Joe Lombardo, who, under Nevada’s legislative process, still has another week or so to take action on it.

This year’s 120-day lawmaking session adjourned in Carson City just after midnight on Tuesday.

A Review-Journal investigation published last year found a group of private administrators, real estate agents, lawyers and house flippers cashed in on dead people’s homes across Southern Nevada for years, through probate cases that routinely started without family participation.

Under Nevada law, virtually anyone can manage a probate case – even if they have no connection to the deceased – and sell the dead person’s home with limited court oversight, the newspaper found.

The Senate Judiciary Committee introduced Senate Bill 404 in March to address the issue. Sen. Melanie Scheible, D-Las Vegas, chair of the committee, previously said she really wasn’t aware of the issues in probate court until she read the Review-Journal’s coverage.

As she recalled, she thought of the system: “Something is wrong here.”

‘Based on evidence’

Family members have top priority in Nevada to manage a probate case. But last on the list in state law is anyone “legally qualified” for the task. It’s a low bar, as any adult in Nevada can run a probate case if they are not a convicted felon, the newspaper found.

“I was definitely a little surprised by that,” Scheible said.

Would-be administrators also could be blocked over a conflict of interest, “drunkenness” or “lack of integrity,” state law says.

The final approved version of SB404 requires anyone who is just legally qualified to oversee a probate case to now obtain a “finding of good cause” that “must be based on evidence,” including a statement of qualifications and an affidavit of due diligence to find any living heir.

It also limits who can obtain court authority for “independent administration.”

This provision of state law lets a probate administrator sell a dead person’s home without a judge’s approval or competitive bidding through court that could boost the price, lawyers have said.

SB404, however, excludes multiple categories of administrators from being able to secure this authority, including those who are just legally qualified to oversee a case.

That portion of the bill was designed to “prevent specific parties” from gaining independent administration in probate cases. They could still administer cases but would need court authority for certain actions, including selling real estate, legislative records show.

Asked and granted

The Review-Journal found that two of Southern Nevada’s most prolific private administrators of the past decade, Thomas G. Moore and his probate successor Cynthia “Cyndi” Sauerland, were involved with at least 500 probate cases combined in Clark County District Court.

They sought independent administration virtually every time, and the court routinely granted it.

They also frequently started cases without family participation and often sold homes to a small circle of repeat buyers who flipped the properties for a higher price, the newspaper found.

Moore, founder of Estate Administration Services, and Sauerland, an agent with Compass Realty & Management, collectively sold around 360 homes through probate court. Their three biggest buyers alone resold more than 130 homes for $13.4 million above the combined purchase price, the Review-Journal found.

Not trying to ‘race to the end’

Moore, Sauerland and their associate Adam Fenn of Compass Realty have said they were finding buyers for abandoned homes that can be taken over by squatters, fall into disrepair and become a neighborhood nuisance.

Moore previously said his legal counsel recommended using independent administration because of the issues with abandoned real estate.

“Moving quickly was in the best interest of the situation due to debt accruing daily and the condition of each property deteriorating daily,” he wrote in an email.

More often than not, heirs received nothing from his probate sales.

The Review-Journal found that he sold 230-plus homes through probate court, and on at least 164 occasions, he reported having nothing to distribute to heirs because he sold the home in a short sale.

In such transactions, lenders approve a sale for less than what’s owed on the seller’s mortgage, typically because the property value fell.

Sauerland, meanwhile, previously said that 65 percent of her sales had equity for the estate.

She pointed to problems the homes can face after the owners die and said the sooner the properties are dealt with, the better.

“It’s a quicker process, but that’s not to mean that we’re trying to race to the end and just make a bunch of money and run away,” she said.

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