If you live in a house, condo, or townhome in Nevada that's part of a common interest community, you're responsible for paying dues and assessments to the homeowners’ association (HOA). If you don’t pay, in most cases the HOA can get a lien on your property that could lead to a foreclosure.
Read on to learn about the particular requirements for HOA foreclosures in Nevada.
Chapters 116 and 116A of the Nevada Revised Statutes govern common-interest communities in Nevada.
In most cases, once you fall behind in payments, the HOA can obtain a lien on your property. Almost all HOAs have the power to place a lien on the property if the homeowner becomes delinquent in paying the monthly dues or any special assessments (collectively referred to as “assessments”). Once a homeowner becomes delinquent on the assessments, a lien will usually automatically attach to that homeowner's property.
In Nevada, the recording of the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) constitutes record notice and perfection of the lien. This means the HOA does not have to record the lien in the county records in order for it to be valid. (Nev. Rev. Stat. § 116.3116(5)). (In some states, though, an association must record its lien.)
Nevada law limits the types of charges that the HOA may include in the assessments lien. (Nev. Rev. Stat. § 116.3116(1)). Unless the CC&Rs provide otherwise, the HOA can include charges for:
Under certain circumstances, an association lien for delinquent assessments may have priority over a lender’s first mortgage or deed of trust. This type of lien is called a “super lien.” In Nevada, nine months' worth of delinquent assessments are given super-lien status. (Nev. Rev. Stat. § 116.3116).
If you default in paying the assessments, the HOA can foreclose. A common misconception is that the association can't foreclose if you're current with your mortgage payments. But the association’s right to foreclose has nothing to do with whether you're current on your home loan payments.
In Nevada, the HOA may hold a foreclose sale after sending the homeowner a notice of delinquent assessments, recording a notice of default and election to sell, and providing notice of the foreclosure sale to the owner.
Before starting the foreclosure, the HOA must mail a notice of delinquent assessment to the homeowner, which states:
Not less than 30 days after mailing the notice of delinquent assessment, the association may then record a notice of default and election to sell (NOD) with the county recorder. The NOD must contain the same information as the notice of delinquent assessment along with a warning that if you do not pay the delinquent amount you could lose your home. The HOA must also mail a copy of the NOD to the homeowner. (Nev. Rev. Stat. § 116.31162).
If the owner doesn't pay the amount of the lien, including costs, fees, and expenses within 90 days following the recording of the NOD, the home will be sold at a foreclosure sale. The HOA must provide notice of the date and time of the sale to the owner. (Nev. Rev. Stat. § 116.31162). (Learn more about foreclosure laws and procedures in Nevada.)
Fines and penalties, in contrast to assessments, are the charges that an HOA imposes if you violate the CC&R's or other governing documents. For example, letting your lawn become overgrown, leaving trash cans outside, and parking in forbidden areas can result in fines and associated fees.
In Nevada, the association may not foreclose a lien based on a fine or penalty unless:
In Nevada, the homeowner can redeem the property within 60 days following an HOA foreclosure sale. (Nev. Rev. Stat. § 116.31166(3)-(6)).
If you're facing an HOA foreclosure, consider talking with an attorney licensed in Nevada to discuss all legal options available in your particular circumstances.