Senate Bill 174 is an example of a proposed legislation that is intended to protect the responsible Las Vegas home owners who pay their HOA dues and stand by the rules.
The trending of homeowners association came into the late 1950s and early 1960s in highly developed states such as California, Arizona, and Florida as a way to move the municipality costs to homeowners, says Paul Terry, attorney and president-elect of the Community Association Institute.
The core problem is this. A good portion of what the government pays for its services is by property taxes and it also has priority taxes. The 100% will always get paid of those taxes plus interest. This municipal function that is now being transferred to an HOA is the problem. The question will be how does this HOA get their funding to satisfy that function? Las Vegas home owners or the property itself could be the one that benefits from those functions.
The HOA holds the owner accountable with assessment liens just as the county holds a property owner responsible in the form of tax liens. The government collections of liens are unlimited whereas the association is limited only to a collection of nine months in assessments.
The question now with this legislation is if an HOA bring upon the collection costs to collect the lien, are those part of the nine months of superiority liens, which are in front of bank liens?
When the investors do not want to pay their fair share, the greed factor emerges. More than 500 Las Vegas home owners associations are being filed with lawsuits. These homeowners are being driven by investors looking to “turn over” homes for a quick income.
Three separate judges in three different District Court cases all concluded that collections costs and “reasonable” attorney fees for unsettled HOA appraisals are included in superiority liens.
Nevertheless, the critics of SB 174 say that the costs are much greater than the amount of irresponsible assessments. With collection fees, some assessments have gone from a couple of hundred dollars to $5,000 and more.
The HOA can file a notice of default and begin foreclosure proceedings if the liens aren’t paid; although, less than one percent of homes go to foreclosure.
You also have to look at how homeowners got to the point of foreclosure with assessment liens. They may ignore multiple notifications and no association sends assessments to collection until they’re 60 days delinquent.
You have to know what the homeowner’s responsibilities are. You have to provide a correct mailing address and respond to correspondence and talk to management.
Keep in mind that before an association could begin foreclosure against a property owner, it would require dues or assessments to remain unpaid for 90 days.
Complaints from members of homeowners associations are received by the lawyers who spoke about the bill. They believed that the associations have become extremely powerful and that more protections need t be in place for members.
