Pacaso – Coming To A Neighborhood Near You?

What does this mean to Incline Village/Crystal Bay?

Summary:

• Pacaso establishes a LLC, buys a home and then markets 1/8 ownership in the LLC.
• The LLC meets the definition of a time share, as defined by NRS 119A.140, based on our research. The definition is provided below.
• Time Shares are not allowed in Residential Use Regulatory Zones, according to Washoe County regulations.  Washoe County is aware and is investigating.
• These homes will never be available for purchase by a single owner until such time all LLC owners decide to sell all shares.
• The LLC avoids paying Transient Occupancy Taxes (TOT), because they aren’t a Short Term Rental (STR).
• The LLC avoids paying real estate transfer taxes, because they aren’t selling real estate they’re selling shares of a LLC.
• The LLC avoids all of the newly established Washoe County Short Term Rental permit regulations, because they aren’t STRs. Therefore, there are no safety inspections, occupancy limits, parking restrictions, no local 24/7 contact for dealing to issues/complaints, etc.
• The LLC skirts HOA rules and regulations, since they aren’t STRs.
• While the LLC share owners aren’t allowed to Short Term Rent their time, they may “gift” it to anyone.
• The occupants are anonymous, as are the owners. The LLC doesn’t list the share owner’s names. Therefore, there’s no understanding of who is responsible, or legitimate, as occupants.
• The impact to neighborhoods is worse than an STR due to all of the above, in our opinion.
• Here is the link to a petition created for our community. No donation is required to complete the petition.

Below is information pertaining to Pacaso’s business practices in Incline Village.  Based on our research, we understand Pacaso to be purchasing residential properties to be resold as Time Shares in violation of Nevada Revised Statue (NRS) 119A.140. NRS 119A.140 defines a “Time share” as the right to use and occupy a unit on a recurrent periodic basis according to an arrangement allocating this right among various owners whether or not there is an additional charge to the owner for occupying the unit. Washoe County Code 110.304 states Time Shares are restricted to Tourist Commercial (TC) Regulatory Zones. Therefore, our research has lead us to the conclusion their factional ownership model is in violation of Washoe County zoning regulations.

Here’s their process of operation: 

1. Pacaso establishes a LLC, then purchases a home owned by said LLC. 
   1. Pacaso is listed on the Incline Village Board of Realtors with Charles Tanner as the Broker.  His business address is 18E. 4^th St., Suite 902, Cincinnati, OH 45202.  You may find his website with Pacaso referenced at this link http://emeraldcoasthomesonline.com/agents/E31652/?pn=74
   2. Here are three examples of Pacaso properties located in Incline Village. All of the properties have the Pacaso Broker’s Mailing Address, 18 E. 4^th St, Suite 902, Cincinnati, OH, listed as the property mailing address in the Washoe County Assessor Real Property Assessment Data system.
      • 936 Lakeshore Blvd, ‘1 NV Silver LLC’ is the registered owner.
      • 735 Betty Ln., ‘2 NV Silver LLC’ is the registered owner.
      • 325 Woodridge Way,  ‘325 Woodridge Way LLC’ is the registered owner.
2. All properties, ‘1 NV Silver LLC’ (NV 20222398306 Entity # E21740312022-7), ‘2 NV Silver LLC’ (NV 2022240092 Entity #21816912022-1) and ‘325 Woodridge Way LLC’ (NV20212226910 Entity # E17473512021-6), have the same Registered Agent which is Corporation Service Company (NV20091285031) located at 112 North Curry Street, Carson City, NV 89703.
3. All properties have the same Officer Information on the Nevada Secretary of State website. That is Owner Management, Inc. located at 18 E. 4^th St., Suite 902, Cincinnati, OH 45202 , the same address as Charles Tanner, Broker for Pacaso.
4. In searching the Nevada Secretary of State website, we uncovered 3 additional LLCs that have been established with the same Owner Management Inc. as the Officer. These additional LLCs, as of the time of this post, do not have a property recorded in the Washoe County Assessor Real Property Assessment Data system.  The LLCs are: ‘3 NV Silver LLC’, ‘4 NV Silver LLC’ and ‘5 NV Silver LLC’. Therefore, these additional LLCs have been established for 3 additional homes they intend to purchase and sell LLC shares.
5. Pacaso markets 1/8 co-ownership, but in actuality, Pacaso is selling 1/8 of the LLC shares, a time share, in a Residential Zone.
   • We contacted the President of Tahoe Sierra MLS (TSMLS), the MLS listing service being used for the Pacaso co-ownership listings, and were told they are listed properly on the TSMLS. Furthermore, the President stated they never discourage new and innovative ways to sell real estate.
   • Charles Tanner, the Pacaso broker, is the agent/broker on the MLS for home at 735 Betty Lane. Here is the link to the listing https://www.realtor.com/realestateandhomes-detail/735-Betty-Ln_Incline-Village_NV_89451_M10615-36012
   • The property located at 325 Woodridge Way appears to have had all shares sold with Jamison Blair, of Compass, listed as the most recent listing agent. It was listed on the TSMLS and ‘sold’ on January 25, 2022.  There is no real estate recorded transaction listed on the Washoe County Assessor Real Property Data system related to the sales transaction.   Here is the listing https://www.redfin.com/NV/Incline-Village/325-Woodridge-Way-89451/home/68066115
   • The property located at 936 Lakeshore was sold to Pacaso, with the LLC of ‘1 NV Silver LLC’ recorded as the owner on 5/24/2022. It has not yet been listed for the co-ownership sales as of 6/1/2022.
6. The LLC 1/8th purchaser is required to hold their shares for a minimum of 1 year, per Pacaco’s website. After that time, they may sell their shares.

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NRS 119A.140  “Time share” defined.  “Time share” means the right to use and occupy a unit on a recurrent periodic basis according to an arrangement allocating this right among various owners whether or not there is an additional charge to the owner for occupying the unit.

      (Added to NRS by 1983, 978; A 1985, 1137; 2001, 2499)

      NRS 119A.150  “Time-share instrument” defined.  “Time-share instrument” means any document creating or regulating time shares, excluding any law, ordinance or governmental regulation.

      (Added to NRS by 1983, 978)

      NRS 119A.152  “Time-share plan” defined.  “Time-share plan” means the rights to time shares and the obligations and interests appurtenant thereto created by a time-share instrument.

      (Added to NRS by 2001, 2495)

      NRS 119A.153  “Time-share resale” defined.  “Time-share resale” means the sale or transfer of a time share that was previously sold to a purchaser.

      (Added to NRS by 1999, 2686)

      NRS 119A.156  “Time-share resale broker” defined.  “Time-share resale broker” means a person who is licensed pursuant to chapter 645 of NRS and is registered as a time-share resale broker pursuant to the provisions of this chapter and who, for compensation, lists, advertises, transfers, assists in transferring, promotes for resale or solicits prospective purchasers of previously sold time shares, on behalf of an owner other than a developer.

      (Added to NRS by 1999, 2686; A 2013, 1582, 3510)