Ask an Attorney: Can my HOA foreclose?

Sunday, June 28, 2015 | 2 a.m.

By Attorney Xenophon Peters, Partner, Peters and Associates, LLP

Question: Last week, I got a letter saying my HOA was foreclosing on my home because I owe them$2,000 that's past due. Can they do that? I'm current on my mortgage and don't think I owe themmoney!

Answer: Yes. In Nevada, a homeowners association has the right to foreclose on a home regardlessof whether you're current on your mortgage, even if you dispute the amount you owe. In fact, yourletter probably reads, "Warning! If you fail to pay the amount specified in this notice, you could loseyour home, even if the amount is in dispute." (That's required by law).

HOA foreclosure has been in the news a lot over the past few years, most recently when Gov. BrianSandoval signed into law Senate Bill 306, which adds several new rules governing HOA foreclosure.Unfortunately for the reader who asked today's question, the bill doesn't take effect until Oct. 1.

HOA foreclosure is no joking matter. Once the process has started, HOAs tend to foreclose quickly,leaving many (former) homeowners upset and confused when they're evicted by new owners. Addingto the misery, as of this writing, most HOA foreclosures are permanent, meaning there's no right ofredemption.*

Hope is not lost, though. It's usually possible to negotiate with your HOA to stop the sale and workout a payment plan -- sometimes for less than what you owe. The truth is, most HOAs don't want toforeclose on residents, they just want to get paid. (They're about as strapped for cash as the rest ofus). If you communicate with your HOA board, you usually can work something out.

If your HOA board won't work with you, there may be other options available to stop or delay anHOA foreclosure, including bankruptcy and filing a lawsuit. Before going down those paths,however, I encourage you to try to handle the situation outside of the court system.

*When Senate Bill 306 goes into effect in October, homeowners will have 60 days after the date offoreclosure to pay the auction-sales price plus other expenses as noted in NRS 116.31166 to gettheir home back.

If you have a question you'd like to see answered by an attorney in a future issue, please visitPandALawFirm.com.

Please note: The information in this column is intended for general purposes only and is not to beconsidered legal or professional advice of any kind. You should seek advice that is specific to yourproblem before taking or refraining from any action and should not rely on the information in thiscolumn.

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