A state senator is preparing a bill that would limit the fees that collection agencies may recover through superpriority liens on homeowner association dues.
“The premise of the bill is that the fees that a collection agency can charge will be capped, including itemized charges for letters and notices,” state Sen. Allison Copening, D-Las Vegas, said in an e-mail Tuesday. “I do believe the collection companies will support it, but won’t be thrilled, as they already know that overcharging is not acceptable to legislators and homeowners.”
Copening’s bill will focus on superpriority liens, which give homeowner associations first priority in recovering unpaid dues when houses are sold.
Collection agencies have contracted with homeowner associations to collect the dues, and these collection agencies add their fees to the total under superpriority liens. As a result, a house cannot be sold until superpriority liens for association dues and collection agency fees are paid.
Leslie Carver of Prudential Americana Realtors said collection fees often far exceed the amount owed in association dues. She mentioned a client who was trying to sell a house and owed $5,000 in fees to a collection agency on top of $500 in unpaid homeowner association dues.
To sell a home, the collection agency fees and association dues must be paid. The total is so large it often kills a deal to sell a home, Carver said.
David Stone, owner of Nevada Association Services, said he supports Copening’s proposed bill to cap collection agency fees. However, Stone said he prefers that the fee caps be part of regulations, rather than a law that can only be amended during biennial legislative sessions.
Stone said he also supports a provision in Senate Bill 174, another Copening measure, that clarifies the law and makes it clear that collection agencies for homeowner associations can recover collection fees through superpriority liens.
“Senator Copening and I are in lockstep,” Stone said Wednesday.
The Senate Judiciary Committee will consider SB 174 at 8 a.m. today .
Assemblyman James Ohrenschall, D-Las Vegas, also is expected to submit a bill dealing with superpriority liens for collection agency fees.
The Concerned Homeowner Association Members Political Action Committee believes Ohrenschall’s bill would set lower caps on fees under superpriority liens, which the group would favor.
The group wants the Legislature to follow guidelines used by Fannie Mae, a government sponsored mortgage enterprise, and limit collection agency fees to $600, real estate broker James Eaton said. Also, the group favors a bill that would limit homeowner associations to collecting no more than six months of unpaid dues.
Rutt Premsrirut, director of CHAMP, said homeowner associations have no need for collection agency services on unpaid dues because the associations ultimately will collect their dues when the house is sold.
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