Thursday, April 28, 2016

Nevada Supreme Court rules in favor of investors, banks in HOA fees case | Las Vegas Review-Journal

Nevada Supreme Court rules in favor of investors, banks in HOA fees case | Las Vegas Review-Journal: "CARSON CITY — The Nevada Supreme Court on Thursday ruled in a long-awaited dispute over homeowner association dues in super-priority lien cases, finding that Nevada law does not allow for the collection of costs and fees in addition to nine months of back-owed assessments.

The unanimous ruling came in an appeal brought by Horizons at Seven Hills Homeowners Association against Ikon Holdings.

The ruling is a major victory for investors, banks and others who acquired the foreclosed properties. It is a big loss for homeowners associations, collection agencies and others who sought additional compensation in the super-priority lien process.

The super-priority lien in Nevada law allows associations to recover nine months’ worth of assessments. But a legal dispute has been ongoing for years over whether fees and collection costs could be included as part of the lien."


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Superlien litigation (and legislation) is hot right now. Lending institutions are slugging it out with the community association industry over the wreckage of people's lives.

3 comments:

IC_deLight said...

The fees and collection costs as we all know are not earned and they do not go to the HOA. They are contracted for up front and the management companies then does everything it can to generate "late fees" or "collection fees" which the management company is attempting to drum up for itself. These are not earned fees. The court just stopped a rent-seeking practice by HOA management companies.

Super-lien only comes into play after foreclosure. Sadly if the HOA had actually been able to accomplish the job it supposedly is there to do, the property wouldn't have had to be foreclosed on by a mortgagee to begin with. It is only fitting that these HOA management companies should have to forgo the "late fees" they claim for themselves when their client HOA isn't getting paid. This case is good news.

Nevada Deprives Equal Justice said...

Not legal or tax advice - but, I think HOAs and investors that take over these homes through super-priority lien foreclosures should pay taxes on the cancellation of mortgage debt (COD/cancellation of debt). If the super-priority lien foreclosure extinguishes the deed of trust, the mortgage is not getting paid either. Give HOAs and investors the choice - pay the mortgage or pay the tax. U.S. Taxpayers are tired of bailing out Fannie and Freddie. It is time to start taxing HOA foreclosures!

Nevada Deprives Equal Justice said...

Not legal or tax advice - but, I think HOAs and investors that take over these homes through super-priority lien foreclosures should pay taxes on the cancellation of mortgage debt (COD/cancellation of debt). If the super-priority lien foreclosure extinguishes the deed of trust, the mortgage is not getting paid either (i.e. taxable debt). Give HOAs and investors the choice - pay the mortgage or pay the tax. I am sure given the choice - many HOAs might think twice to foreclose.