Nevada Supreme Court ruled that only nine months of delinquent HOA payments can be included in super priority lien status.
Nevada Supreme Court HOA ruling is in favor of banks and distressed property buyers from Nevada Trustee Sale Auction where the act of foreclosing on properties takes place. Home Owner Associations (HOA), and especially collection agencies who charged exuberant amounts in collection fees in addition to delinquent HOA fees.
Needless to say this problem led to many law suits and Nevada Legislation reacted by passing a bill in 2015 to fix this and while keeping the HOA fees in Super priority status modified how HOAS have to contact first lien holders and reduced collection fees and other charges to about $1350.
Here are some important points.
Other important changes:
- A first lien holder now has up to five days prior to the HOA sale to satisfy the super-priority amount, and must then record—at least two days prior to the sale—that such super-priority amount was paid.
- The HOA or its agent must now record an affidavit indicating that proper notices were sent to the first lien holder. No such requirement previously existed.
- The revised law caps the amount of costs and fees that an HOA can levy as part of the super-priority amount (essentially around $1,350), and it specifically prohibits attorneys’ fees from being included as part of the super-priority amount.
- The revised law provides the owner of the property and the first lien holder a 60-day right of redemption.
What the Nevada Supreme Court did was to disallow collection costs and other fees to be included in the super priority lien status. However Nevada law applies from now on.