State Supreme Court will decide Superlien law

Q: I assume superlien law applies only to the homeowners association. I would assume a third party buying the home at a foreclosure auction for the unpaid amount of HOA dues would not inherit these same “superlien status” and still be subject to the mortgage. Am I right?

A: The “superlien law” applies to any association that falls under NRS 116. The status is specific only to an association. Many associations have assigned their receivable rights to third-party investors. Generally speaking, the association receives its nine months of past-due assessments (the superlien) and the investor or third party assumes the association’s position in the foreclosure process. Usually, the third party will assume all collection costs. There are some assignments in which the association receives all of the money it is owed, including all of its association fees (not just the nine months), late and legal fees, collection costs and the third party agrees to correct any violations and pay their assessments each month.

Why? First, the banks are so slow in foreclosing that many of the third party investors can rent the home and not only recoup their original investment dollars but make a profit. I am president of my association. We took possession of the association’s first house about one year ago. We have been leasing it for almost a year. This has allowed the association to collect all of the money owed by the previous owner including late, legal and collection costs. All of the extra money that the association is receiving from the leased home is transferred into our reserve account.

In some cases, the third party investors have been able to sell the house, which really depends upon the loan-to-value ratio. In the case of my association, the house is too upside down.

Our state Supreme Court just heard oral arguments of whether an association’s foreclosure extinguishes the first deed of trust. If the court decides that a lender’s loan can be extinguished if the lender does not pay the nine months superlien when properly noticed, there could be a major windfall where these foreclosed homes could be owned free and clear of any mortgages.

Q: At the very beginning of our board meeting, I requested to add some items to the agenda. The president said nothing could be added after the notice was sent to the homeowners. What are the regulations?

A: I reviewed the NRS 116 laws:

1. Homeowner meetings — NRS 116.3108 sections 3 and 4 — the notice of the meeting must include the agenda, which must include the topics to be considered during the meeting. They may include any proposed amendments, any fees or assessments to be imposed or increased, budgetary changes and any proposal to remove a director or member of the board. To be included is a list describing items on which action may be taken.

In an emergency, owners may take action on an unlisted item. The law defines emergency as: any occurrence that (a) could not have been reasonably foreseen, (b) affects the health, welfare and safety of the residents/owners (c) requires board’s immediate attention of and possible action and (d) makes it impracticable to comply with the provisions of sections 3 and 4.

2. NRS 116.31083 addresses meeting notices, which can include an agenda or instructions on obtaining it.

3. A newsletter notation can state that action items can be taken on topics listed from committee reports. For example, the landscape committee has a proposal to install new bushes. The newsletter also can state that an agenda can be changed five days before the board meeting.

4. Parliamentary proceedings — At the beginning of the meeting, it is customary for any additions or deletions or tabling of the action items to be discussed by the board.

Barbara Holland, certified property manager, broker and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to the Association Q&A, P.O. Box 7440, Las Vegas, NV 89125. Fax is 702-385-3759, email is

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