What fees are owed when buying a home at auction?

Q: My company purchased a home at auction. When the deed was recorded in our name, I called and asked the management company for the ledger so we could catch up all homeowners association dues and late fees, etc. I received the ledger and paid the entire amount. I also paid a violation fee for dead trees, bushes and weeds.

Should the homeowners association have charged me the violation fees from the previous owner? I called the management company and asked them if I bought a home at auction today, would I have to pay the violations and they said no because of NRS 116. I have been trying to get the HOA to refund me violation fees and not getting any response. I believe I am owed this money. What is your opinion?

A: In answering your letter, I reviewed all of the additional materials that you have sent to me.

Per NRS 116 statutes, you were obligated to pay the last 9 months of assessments and the fees associated with the collection agency where a lien had been placed on the unit. The association then added to your account additional violation fees from the previous owner.

The question is now whether or not the association had the right to charge you the violation fees from the previous owner because of the lien that was placed on the unit.

There are no super liens for violations unless the violation pertained to health and safety issues. This would be a debatable issue of whether or not the dead trees, bushes and weeds constituted health and safety violations under the state law.

A super lien can now be put into effect where an association could have collected money from the new owner if the work to remove the trees, bushes and weeds had been performed by the association and paid by the association. This is not your case since, in addition to paying these back violations, you had to clean up the landscaping.

As to your options, you may want to file with the ombudsman office to have this issue mediated or arbitrated to have the violation fees refunded in part or in whole. This process of mediation or arbitration is probably the least expensive alternative.

It was communicated to me that a different homeowner had challenged an association in court where the association won the case. Not knowing all of the facts about this case, this still is a gray area and other judges could possibly have made a different decision.

Each legislative year, more laws are imposed upon associations because of incidents like this one, which are related to the legislators by homeowners who believe that their association has mistreated them or unfairly treated them. It would not surprise me if some law is passed in 2011 which would limit or eliminate the right of an association to collect on past due violations from the previous owners.

If you are planning to buy any home within an association that is being sold by auction, it is highly recommended that you find out what assessments and fees are owed by the current owner to the association, so that you, as the new buyer, will not be surprised and where you can make an intelligent decision to participate or not participate in an auction prior to owning a home that has been assessed multiple fines.

In addition, a prospective buyer can access information from the county records as the recorded notices of the lien would indicate the money that is owed at that time by the homeowner.

Many of the companies that are performing the auctions are actually contacting management companies to ascertain the money owed to the association from the current homeowner.

Barbara Holland, CPM, and Supervisory CAM, is president of H&L Realty and Management Co. To ask her a question, e-mail support@hlrealty.com.