CARSON CITY — A state board that oversees the operation of Nevada’s common interest communities voted Wednesday to take no action to repeal its advisory opinion that says collection and attorney costs can be recovered as part of a super priority lien for homeowner dues in foreclosure cases.
The Nevada Commission for Common-Interest Communities and Condominium Hotels voted 4-2 to remove an item from its agenda calling for the rescission of the opinion.
Advocates for rescinding the advisory opinion argued that it conflicts with an attorney general’s opinion issued earlier this year that said the commission did not have the authority to issue such opinions.
The advisory opinion itself also conflicts with the attorney general’s office position that such costs cannot be collected under the super priority lien established by the Legislature to recover unpaid homeowner dues
Several speakers who testified at the meeting asked the commission to wait on the issue until it is decided by the Nevada Supreme Court. Cases involving the super priority lien are in front of the court.
Voting against the motion to delay action were Commissioners Jonathan Friedrich and Robert Frank.
Friedrich argued that the commission had a duty to rescind its advisory opinion because of the finding by the attorney general’s office that the panel had no authority to issue it in the first place.
But Commissioner Scott Sibley, who made the motion to pull the agenda item, said it is just a legal opinion and not binding. Until the commission is ordered by a court that it cannot issue advisory opinions, they should stand, he said.
But Frank said collection agencies are using the commission’s advisory opinion as justification for reaping profits in their efforts to collect unpaid dues to homeowners associations. So there are winners and losers based on the decision of the commission, he said.
The super priority lien in Nevada law allows associations to recover nine months’ worth of assessments. But a legal dispute is ongoing over whether fees and collection costs can be included as part of the lien.
Homeowners’ association representatives have argued that their boards must rely on collection agencies because they do not have the time or expertise to pursue delinquent assessments alone. They also point out that the assessments are the only revenue source available to maintain the communities.
The foreclosure crisis has hit Nevada’s common interest communities hard, creating conflicts among homeowners associations, residents, lawyers, collection agencies, federal housing agencies and investors seeking to buy distressed properties. The conflicts have spawned numerous lawsuits over many issues, including the super priority lien. The Nevada Legislature has failed to pass legislation to resolve the issues.
One case that could potentially resolve the dispute is called the Higher Ground case. It involves investors who argue the additional charges are illegal. The case was argued before the Supreme Court in March. A decision has not yet been issued.
Contact Capital Bureau reporter Sean Whaley at firstname.lastname@example.org or 775-687-3900. Find him on Twitter: @seanw801.