Opinion ID: 2735505
Heading Depth: 4
Heading Rank: 3

Heading: Liens for real estate taxes and other

Text: governmental assessments or charges against the unit or cooperative. NRS 116.3116(2) (emphasis added). If subsection 2 ended there, a first deed of trust would have complete priority over an HOA lien. But it goes on to carve out a partial exception to subparagraph (2)(b)'s exception for first security interests: The [1-10A] lien is also prior to all security interests described in paragraph (b) to the extent of any [maintenance and nuisance - abatement] charges incurred by the association on a unit pursuant to NRS 116.310312 and to the extent of the assessments for common expenses [i.e., HOA dues] based on the periodic budget adopted by the association pursuant to NRS 116.3115 which would have become due in the absence of acceleration during the 9 months immediately preceding institution of an action to enforce the lien, unless federal regulations adopted by the Federal Home Loan Mortgage Corporation or the SUPREME COURT OF NEVADA 4 (0) 1947A AeD Federal National Mortgage Association require a shorter period of priority for the lien. . . . This subsection does not affect the priority of mechanics' or materialmen's liens, or the priority of liens for other assessments made by the association. NRS 116.3116(2) (emphases added). 1 As to first deeds of trust, NRS 116.3116(2) thus splits an HOA lien into two pieces, a superpriority piece and a subpriority piece. The superpriority piece, consisting of the last nine months of unpaid HOA dues and maintenance and nuisance-abatement charges, is prior to a first deed of trust. The subpriority piece, consisting of all other HOA fees or assessments, is subordinate to a first deed of trust. NRS 116.3116 largely tracks section 3-116(a)-(0 of the 1982 UCIOA. 2 But it does not use the language in subsections (j) and (k) of UCIOA § 3-116, which offer alternative HOA lien foreclosure provisions for adaptation to local law. See 1982 UCIOA § 3116(j)(1) (In a condominium or planned community, the association's lien must be FUCIOA § 3-116 differs from NRS 116.3116(1) in that it limits the superpriority to six rather than nine months of unpaid dues, does not make provision for Federal Home Loan Mortgage Corporation and Federal National Mortgage Association regulations, and does not include maintenance and nuisance-abatement charges in the superpriority lien. 2 NRS 116.3116(3) was added in 2013, 2013 Nev. Stat., ch. 552, § 7, at 3788, and is unique. NRS 116.3116(11) was added in 2011, 2011 Nev. Stat., ch. 389, § 49, at 2450 (renumbered from subsection 10 to 11 by 2013 Nev. Stat., ch. 552, §7 at 3789), and replicates subparagraph (I) of the 1994 version and subparagraph (m) of the 2008 version of the UCIOA. See UCIOA § 3-116(m) (2008), 7 U.L.A., part IB 377 (2009); UCIOA § 3-1160 (1994), 7 U.L.A., part IB 571-72 (2009). See note 1 above for additional variations. SUPREME COURT OF NEVADA 5 (0) 1947A e foreclosed in like manner as a mortgage on real estate [or by power of sale under [insert appropriate state statutell.); id. § 3 - 116(k) (offering an optional fast-track foreclosure method for cooperatives, which often carry substantial debt service obligations). Instead, the Nevada Legislature handcrafted a series of provisions to govern HOA lien foreclosures, NRS 116.31162 through NRS 116.31168, and refashioned 1982 UCIOA §§ 3 - 116(j)(2) and (3), concerning cooperatives, as NRS 116.3116(10). To initiate foreclosure under NRS 116.31162 through NRS 116.31168, a Nevada BOA must notify the owner of the delinquent assessments. NRS 116.31162(1)(a). If the owner does not pay within 30 days, the HOA may record a notice of default and election to sell. NRS 116.31162(1)(b). Where the UCIOA states general third-party notice requirements, see 1982 UCIOA § 3 - 1160(4) (In the case of foreclosure under [insert reference to state power of sale statute], the association shall give reasonable notice of its action to all lien holders of the unit whose interest would be affected.), NRS 116.31168 imposes specific timing and notice requirements. The provisions of NRS 107.090, governing notice to junior lienholders and others in deed - of-trust foreclosure sales, apply to the foreclosure of an association's lien as if a deed of trust were being foreclosed. NRS 116.31168(1). The HOA must provide the homeowner notice of default and election to sell; it also must notify [e]ach person who has requested notice pursuant to NRS 107.090 or 116.31168 and rainy holder of a recorded security interest encumbering the unit's owner's interest who has notified the association, 30 days before the recordation of the notice of default, of the existence of the security interest. NRS 116.31163(1), (2). The homeowner must be given at least 90 days to pay SUPREME COURT OF NEVADA 6 (0) 1947A 44WP40 off the lien. NRS 116.31162. If the lien is not paid off, then the BOA may proceed to foreclosure sale. Id. Before doing so, the BOA must give notice of the sale to the owner and to the holder of a recorded security interest if the security interest holder has notified the association, before the mailing of the notice of sale of the existence of the security interest. NRS 116.311635(1)(b)(2); see NRS 107.090(3)(b), (4) (requiring notice of default and notice of sale to klach other person with an interest whose interest or claimed interest is subordinate to the deed of trust). NRS 116.31164 addresses the procedure for sale upon foreclosure of an BOA lien and specifies the distribution order for the proceeds of sale. A trustee's deed reciting compliance with the notice provisions of NRS 116.31162 through NRS 116.31168 is conclusive as to the recitals against the unit's former owner, his or her heirs and assigns, and all other persons. NRS 116.31166(2). And, Wile sale of a unit pursuant to NRS 116.31162, 116.31163 and 116.31164 vests in the purchaser the title of the unit's owner without equity or right of redemption. NRS 116.31166(3).