Reader learns the hard way about outstanding liens on auctioned homes

Q: I purchased a home during the Clark County sheriff's auction on March 3 and paid cash. On March 10, the homeowners association, through a collection agency, recorded an Homeowner Association lien on the property of about $1,024. This lien was from HOA assessments that were not paid by the previous owner. On March 16, I recorded the Trustees Deed upon Sale. When I contacted the agency and asked them to clear the lien, they told me the amount of the lien was now $1700, which included a transfer fee of $300 and additional fees. I received a letter saying I had 10 days to pay or they were going to file a Notice of Default and begin foreclosure proceedings. This would add another $300 to the lien amount. I talked to the HOA community manager, but she would do nothing to help me. I paid $1,400 to settle this matter.

I believed that whenever you buy a property at auction and you bid on the first trust deed, all subordinate liens would be expunged for the winning bidder. I had no constructive or actual notice of the HOA lien when I paid for the property since it had not yet been recorded.

Can I now sue the previous owners in small claims court since I paid their delinquent HOA dues?

A: State law allows the association to collect the last six months of delinquent assessments from the new owner. This is not a case where all of the subordinate liens are expunged. It is considered more as a super lien.

When buying into an association, state law requires certain information and documents to be disclosed to the buyer and to be given to the buyer from the seller. In a normal sale or even in a foreclosure sale from a lending institution, you would have received this information as the obligation is to the seller (NRS 116.4109). Nowhere in NRS 116 does it address this issue of the Clark County sheriff's auction and the county's obligation to comply with the required resale package as stated in NRS 116.4109. You should address this issue with the sheriff's department and to any other staff member or department that can provide you with information as to the county's responsibility to the buyer.

Can you sue the previous owner? Yes, but if the home was being sold in an auction, you may find that there are no funds from the previous owner.

Q: In January 2008, I replaced the grass in the front yard at a rental home.

In June 2008, I noticed that our homeowner dues had a fine of $200. When I called the HOA, I was told that I needed to have approval from the architectural review committee for any changes to my front yard.

I asked for the forms, had the neighbors sign, produced a drawing and submitted the forms to the HOA. This was done in July 2008.

In August 2008, I received a letter of approval from the HOA and I expected the fine to be removed.

The fine was not credited, so I appealed twice. I lost so I paid the fine.

The HOA never mailed any correspondence to my home address but to the rental address and I never knew what was going on until six months later when I saw the fine. The bill was mailed to my home address.

I would like to sue the HOA board of directors. What is your opinion?

A: The way the state law is written, you will need to first file a formal complaint with the ombudsman office. The complaint must be administrated through their process prior to any action being initiated in a court of law.

The process ranges from intervention, to arbitration and or mediation. The state law was established in this manner as the legislators did not want to flood the court system with complaints that they felt could be processed by the ombudsman office and the Nevada Real Estate Division and the Common Interest Community and Condominium Hotels Commission.

Unless there are other facts not disclosed, it would appear that you have a good case against your association.

Barbara Holland, certified property manager, is president and owner of H&L Realty and Management Co. To ask her a question, e-mail support@hlrealty.com.