Wrap-up of state laws affecting local HOAs

Editor’s note: This is the last in a three-part series on recent laws that affect local homeowners associations.

Excess proceeds from county tax sales — Effective July 1

If there are excess proceeds after a county tax sale on a home, the association may apply for those funds. The association must monitor the tax sale or have a third-party monitor the tax sale as the county will not send any notices to the association. If the association recovers any excess proceeds in any amount, it has to then forgo collecting any amount remaining and cannot pursue any deficiency in the remaining money that is owed to the association.

Foreclosure mediation program and electronic collection notifications

The foreclosure mediation program was to sunset on June 30. Senate Bill 490 makes the program between lenders and delinquent homeowners permanent. Although there are various changes to the law, none of the changes will impact associations. The current law, and under the new law, states the same: That associations cannot foreclose on a home while the homeowner is involved in the foreclosure mediation process unless the homeowner fails to pay his assessments that become due during the mediation process.

SB 490 also amended Nevada Revised Statutes 116.31162: If authorized by the parties, associations may deliver the 60-day notice, notice of delinquent assessment and notice of default and election to the homeowner or his successor in interest by electronic transmission. The electronic transmission does not apply to notice of sale and does not apply to copies that must be sent to the lien holders.

Associations may have to review its email authorization protocol to specifically address collection notices.

Passing of special declarant’s rights

This has been an area of contention. As we know, many developers lost their developments during the Great Recession. Most of the times, the land reverted back to the original mortgage lender and, in some cases, the reverted land bounced to other mortgage lender, which took over the position of the first lender. Often when a developer was going under, he or she sold their land to another developer. During this period of land movement from one entity to another, the issue arouse as to whether the last entity that owned the land had the legal responsibility under NRS 116 to adhere to the declarant’s rights and obligations. Under the amended law, the purchaser of the property acquires the special declarant’s rights unless the purchaser elects otherwise and that information is stated in the recorded instrument.

The new law allows the entity that is purchasing the property being foreclosed or sold to transfer some of the special declarant’s rights, which must be noted in the recorded instruments.

SB 188 — Expansion of anti-discrimination in housing

This law revised existing provisions that prohibit various types of discrimination to include discrimination on the basis of sexual orientation and gender identity or expression and provides for a penalty if the law is violated.

Commission members for the Common-Interest Communities and Condominium Hotels

Of the seven-member commission, three members must be homeowners who actually reside in a unit within the state of Nevada.

If you are interested in reviewing other laws that were passed that have not been addressed in my summaries, you can access the text of those bills by clicking visiting leg.state.nv.us

Here is a list of some of the bills:

■ AB 138 – Rain barrels

■ AB -161 – Rental agreements (if the association owns and is renting homes

■ SB 203 — Corporate directors and officers: breach of fiduciary duty (applies to all corporations and not just associations,)

■ SB 367 — Expedited lender foreclosure of abandoned property

■ SB- 314 — Wind energy systems

This was a good legislative session for associations. There were many proactive changes that will improve the administrative functions of our associations. The associations ended the legislative session with our nine-month superlien laws and non-judicial laws intact.

We will just have to sit and wait to see what happens between the court systems as the Ninth District Federal Courts and our State Supreme Court have significantly different opinions as to the validly of our foreclosure laws but we will save that discussion for another day.

Barbara Holland is a certified property manager, broker and supervisory certified association manager. Questions may be sent to holland744o@gmail.com.

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