CIC anna-parksPast Dues vs. the Banks Round #2

Changes Effective October 1, 2009

 When listing an REO property the seller (bank) is often in a legal dispute with the Common Interest Community on what past due fees can be charged.  Upon foreclosure all dues from that point on are the bank’s responsibility.  But what of the past due dues, which are also in arrears (not paid)?  NRS 116.3116 covers this under Liens.

The lien (claim) from the CIC is prior to all other liens except for a few exceptions (discussed below).  “Prior,” is a key word in law, coming from the phrase under the doctrine of “first in time, first in right,” as coined in the 1827 Missouri case  concerning the sale of a home which had liens filed against it.  The first lien recorded takes precedence over those filed ‘after’ or ‘later in time,’ also known as ‘junior.’  This is known as the ‘doctrine of priority liens’ as described in the Nevada homestead case of In re Contrevo.

 The Exceptions (aka the CIC Protection Act)

 The lien from the CIC for assessments takes limited priority over the first security interest on the unit.  The CIC lien gets to take precedence over and must be paid by the foreclosing bank for assessments for common expenses which would have become due during the immediately preceding six (6) months (nine (9) as of October 1, 2009)  of the foreclosure trustee sale.