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Nevada High Court Rules On HOA Liens


The Nevada Supreme Court last week upheld a law that lets homeowners association foreclose on houses ahead of mortgage lenders, even if the HOAs are owed a fraction of what's owed to the bank.

The high court overruled a Clark County District Court judge in letting stand a state law that lets HOAs size homes through foreclosure when property owners are behind on their HOA dues.

The justices agreed with the argument that the investors, by paying off the lien held by the Southern Highlands Community Association in 2012, wiped out a debt of $885,000 on the property that had been held by U.S. Bank as first deed of trust.

Dan McNutt, an attorney with Carbajal and McNutt in Las Vegas, told KNPR he expects bank lobbyists are already reaching out to Nevada lawmakers to change state law making sure that nothing, expect federal taxes, supersedes their first position.

U.S. Bank had argued that if a lender cannot adequately protect its substantial residential loan investment, the lender will either cease lending in Nevada or charge high interest rates to protect itself. McNutt expected banks to require that HOA fees are paid through an escrow or mortgage account.

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Dan McNutt, attorney with Carbajal & McNutt

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