[Rev. 11/21/2013 9:49:03 AM--2013]

CHAPTER 149 - NOTES, MORTGAGES AND LEASES

BORROWING MONEY AND MORTGAGING PROPERTY

NRS 149.010           Authorization to borrow; purposes warranting borrowing; joint borrowing.

NRS 149.020           Petition.

NRS 149.030           Hearing and order.

NRS 149.040           Execution of instruments.

NRS 149.050           Effect of proceedings under NRS 149.010 to 149.050, inclusive.

LEASING

NRS 149.060           Authorization to lease.

NRS 149.070           Petition.

NRS 149.080           Hearing on petition; order directing personal representative to make lease; terms of lease; recordation of copy of order.

NRS 149.090           Execution of lease; effect of omission, error or irregularity in proceedings.

NRS 149.100           Lease without court order.

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BORROWING MONEY AND MORTGAGING PROPERTY

      NRS 149.010  Authorization to borrow; purposes warranting borrowing; joint borrowing.

      1.  If it appears to be to the advantage of the estate to borrow money upon a note or notes, unsecured or to be secured by a security agreement or other lien upon the personal property of the decedent or any part thereof, or to be secured by a mortgage upon the real property of the decedent or any part thereof, or to mortgage or create a security interest or other lien upon the property or any part thereof, in order to pay the debts of the decedent, or devises, or expenses or charges of administration, or to pay, reduce, extend or renew a security interest or agreement or lien or mortgage existing upon property of the estate, and as often as occasion arises in the administration of the estate, the court may direct the personal representative to borrow the money and to execute such note or notes and, in a proper case, to execute such mortgage, or to give other security by way of security interest or other lien, or may authorize, in a proper case, the execution of an extension agreement.

      2.  If property of the estate consists of an undivided fractional interest in real or personal property, and it appears to be to the advantage of the estate to borrow money in order to improve, utilize, operate or preserve the property jointly with the other co-owner or co-owners, or in order to pay, reduce, extend or renew some security interest or agreement, lien or mortgage existing upon the property, including the other undivided interest or interests therein, the court may direct the personal representative to borrow the money required for those purposes and to join with the owner or owners of the other undivided interest or interests in the property, or their duly authorized representatives or agents, in the execution of such joint and several note or notes as may be necessary, and to join with the owner or owners of the other undivided interest or interests in the property, or their duly authorized representatives or agents, in the execution of such security agreement, lien or mortgage as may be required to secure the payment of the note or notes.

      [175:107:1941; 1931 NCL § 9882.175]—(NRS A 1969, 3; 1999, 2325)

      NRS 149.020  Petition.

      1.  The personal representative or an interested person shall file a petition showing:

      (a) The particular purpose or purposes for which the order is sought.

      (b) The necessity for or advantage to accrue from entry of the order.

      (c) The amount of money proposed to be raised, if any.

      (d) The rate of interest to be paid.

      (e) The length of time the note or notes are to run.

      (f) A general description of the property proposed to be mortgaged or subjected to the security agreement or other lien.

      2.  The clerk shall set the petition for hearing and the petitioner shall give notice of the hearing in the manner required by NRS 155.010 or as the court by order may require.

      [176:107:1941; 1931 NCL § 9882.176]—(NRS A 1969, 4; 1975, 1775; 1999, 2325)

      NRS 149.030  Hearing and order.

      1.  At the time appointed, the court, upon proof that due notice of the hearing has been given, shall proceed to hear the petition and any objection that may have been filed or presented. If, after a hearing, the court is satisfied that it will be to the advantage of the estate, it shall enter an order directing the personal representative to borrow the money and to execute the note or notes, and, in a proper case, to execute the mortgage or give other security by way of security interest or other lien.

      2.  The court may direct that a lesser amount than that named in the petition be borrowed, and may prescribe the maximum rate of interest and the period of the loan, and require that the interest and the whole or any part of the principal be paid, from time to time, out of the whole estate or any part thereof, and that the personal property to be subject to the security agreement or other lien, or any improvements on the premises to be mortgaged, are insured for the further security of the lender, and the premiums paid from the assets of the estate.

      3.  A certified copy of the order must be recorded in the office of the county recorder of every county in which the property affected by the order, or any portion thereof, is located.

      [177:107:1941; 1931 NCL § 9882.177]—(NRS A 1969, 4; 1999, 2326)

      NRS 149.040  Execution of instruments.  The personal representative shall execute, acknowledge and deliver the mortgage or other security, as directed, setting forth therein that it is made by authority of the order, giving the date of the order. The note or notes and mortgage or other security must be signed by the personal representative as such, and create no personal liability against him or her.

      [178:107:1941; 1931 NCL § 9882.178]—(NRS A 1999, 2326)

      NRS 149.050  Effect of proceedings under NRS 149.010 to 149.050, inclusive.

      1.  A mortgage or security agreement so made is effectual to mortgage or subject to the security agreement all right, title, interest and estate which the decedent had in the property described therein at the time of his or her death or previously and any right, title or interest in the property acquired by the estate of the decedent, by operation of law or otherwise, since the time of his or her death.

      2.  Jurisdiction of the court to administer the estate of the decedent is effectual to vest the court with jurisdiction to enter the order for the note or notes and mortgage or security agreement, and the jurisdiction conclusively inures to the benefit of the mortgagee named in the mortgage or the secured party named in the security agreement and the heirs, successors and assigns of the secured party.

      3.  No omission, error or irregularity in the proceedings impairs or invalidates them or the note or notes or mortgage or security agreement given in pursuance thereof, and the mortgagee or secured party and the heirs, successors and assigns of the secured party, have and possess the same rights and remedies on the note or notes and mortgage or security agreement as if it had been made by the decedent before his or her death, except that, upon any foreclosure or sale under the mortgage or security agreement, if the proceeds of the sale of the encumbered property are insufficient to pay the note or notes, the mortgage or security agreement, and the costs or expenses of sale, no judgment may be had or allowed except in cases where the note or notes or mortgage or security agreement was given to pay, reduce, extend or renew a lien, mortgage or security agreement existing at the time of the death of the decedent and the indebtedness secured thereby was an allowed and approved claim against the estate, in which case the part of the indebtedness remaining unsatisfied must be classed and paid with other allowed claims against the estate.

      [179:107:1941; 1931 NCL § 9882.179]—(NRS A 1969, 5; 1999, 2326)

LEASING

      NRS 149.060  Authorization to lease.  If it appears to be to the advantage of the estate to lease any real property of the decedent, and as often as occasion arises in the administration of the estate, the court may direct the personal representative to execute the lease.

      [180:107:1941; 1931 NCL § 9882.180]—(NRS A 1999, 2327)

      NRS 149.070  Petition.

      1.  To obtain such an order the personal representative or an interested person shall file a petition, showing the advantage to accrue from giving the lease, a general description of the property proposed to be leased, and the term, rental and general conditions of the proposed lease.

      2.  The clerk shall set the petition for hearing, and the petitioner shall give notice of the hearing in the manner required by NRS 155.010 or as the court by order may require.

      [181:107:1941; 1931 NCL § 9882.181]—(NRS A 1975, 1775; 1999, 2327)

      NRS 149.080  Hearing on petition; order directing personal representative to make lease; terms of lease; recordation of copy of order.

      1.  At the time appointed, the court shall hear the petition and any objection that may have been presented, and if the court is satisfied that it will be to the advantage of the estate, it shall enter an order directing the personal representative to make the lease.

      2.  The order must set forth the minimum rental or royalty and the period of the lease, which must be for such time as the court may authorize, except as otherwise provided in subsection 5 with respect to a lease for the purpose of production of minerals, oil, gas or other hydrocarbon substances or natural steam.

      3.  The order may authorize other terms and conditions, including, with respect to a lease for the purpose of production of minerals, oil, gas or other hydrocarbon substances or natural steam, a provision for the payment of rental and royalty to a depositary, and for the appointment of a common agent to represent the interest of all the lessors, and, if the lease is for the purpose of production of oil, gas or other hydrocarbon substances or natural steam, including a provision for the payment of a compensatory royalty in lieu of rental and in lieu of drilling and producing operations on the property covered by the lease, and including a provision empowering the lessee to enter into any agreement with lessees, operators or owners of other property for the purpose of bringing about the cooperative development and operation of all or parts of the field of which the leased property is a part, or for the development and operation of all or parts of the field as a unit.

      4.  If the lease covers additional property owned by other persons or an undivided interest of the decedent, or other interest of the decedent less than the entire ownership in the property, it may provide for division of rental and royalty in the proportion that the property or interest of each owner bears to the total area of the property or total interests covered by the lease.

      5.  A lease for the purpose of production of minerals, oil, gas or other hydrocarbon substances or natural steam may be for a fixed period, and so long thereafter as minerals, oil, gas or other hydrocarbon substances or natural steam are produced in paying quantities from the property leased or mining or drilling operations are conducted thereon, and, if the lease provides for the payment of a compensatory royalty, so long as the compensatory royalty is paid, and, if the property covered by the lease is included in an agreement with lessees, operators or owners of other property for cooperative development or unit operation of a larger area including the leased property, so long as oil, gas or other hydrocarbon substances or natural steam are produced in paying quantities from any of the property included in any such agreement or drilling operations are conducted thereon.

      6.  A certified copy of the order must be recorded in the office of the county recorder of every county in which the leased property, or any portion thereof, is located.

      [182:107:1941; A 1951, 223]—(NRS A 1961, 65; 1965, 125; 1999, 2327)

      NRS 149.090  Execution of lease; effect of omission, error or irregularity in proceedings.

      1.  The personal representative shall execute, acknowledge and deliver the lease as directed, setting forth therein that it is made by authority of the order, giving the date of the order.

      2.  A lease so made is effectual to lease the property described, at the rent, for the term and upon the conditions therein prescribed.

      3.  Jurisdiction of the court to administer the estate of the decedent is effectual to vest the court with jurisdiction to enter the order for the lease, and that jurisdiction conclusively inures to the benefit of the lessee, the lessee’s heirs, successors and assigns.

      4.  No omission, error or irregularity in the proceedings impairs or invalidates them or the lease made in pursuance thereof.

      [183:107:1941; 1931 NCL § 9882.183]—(NRS A 1999, 2328)

      NRS 149.100  Lease without court order.  A personal representative may lease property without an order of court if the tenancy is from month to month, or for a term not to exceed 1 year.

      [184:107:1941; 1931 NCL § 9882.184]—(NRS A 1975, 1775; 1999, 2329)