DUES THAT ARE PAST DUE AND WHAT TO DO
CIC Past 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.
July 2, 2009 at 10:13 am
o.k…so, the hoa has a trustee sale date, the first and second mtg does not…
the sale happens…what happens to the mtgs?
July 2, 2009 at 10:32 am
The ‘junior liens’ are wiped away and become ‘sold off junior lien holders.’ See my blog explaining this https://ameglegal.wordpress.com/2007/04/20/tgif-legal-tip-foreclosureone-actionsold-out-junior-lien-holders/
July 2, 2009 at 5:06 pm
I am being held hostage on several and the banks don’t care, locks are expiring and buyers are not happy. I makes me not safe or sane
March 9, 2010 at 11:03 am
If a lien holder forecloses on a property the most the HOA can collect is 9 months of past HOA dues?
Can they collect any fees, penalties, lien charges, recording, demand charges, etc. from the bank after foreclosure or does the law only allow for them to receive 9 months of back missed CIC dues? Please let me know and thank you!
March 9, 2010 at 1:58 pm
Here is what the statute says, NRS 116.3116(2)(c)”…assessments for common expenses based on the periodic budget adopted by the association … which would have become due in the absence of acceleration during the 9 months immediately preceding [foreclosure].”
So, it is not clear.
It does not say, for example, “no assessments, only monthly dues,” – it says, “assessments … based on the periodic budget ….” which could be only the monthly, and not fines, or both, or all, it’s a debate. The management companies throw everything in. If it is an issue, make the CIC account for every dime and argue that you will only pay what is budgeted, not interest, fines, etc. as that is not ‘budgeted.’
May 21, 2010 at 7:41 am
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June 11, 2010 at 5:35 am
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July 12, 2012 at 2:16 pm
This may get some Attorneys attention!! “Really’!!!
We all know what Nevada AB 284 is all about.”Bank Cannot Foreclosure without the promissory Note”
BUT, what gives the same Bank’s the right to sign off on a short sale and sell the property when they really cannot prove that they are the Legal Note Holder? Also someone should ask the Title company’s why they are not asking the banks to produce the Note. NO Note No Deal !!!
BROKEN CHAIN OF ASSIGNMENT:
” Under the Uniform Commercial Code (UCC), the promissory
note is a one of a kind instrument. All assignments (much like
endorsements on the back of a check) have to be done as a
permanent fixture onto the original promissory note. The original
promissory note has the only legally binding chain of title.
Without a proper chain of title, the instrument is faulty.”
Could this generate two different type of class action law suit that can be filed here? One law suit against the banks, and the other one against the Title company’s, if this “really” happens it will make this whole mess even worse and more complicated.
Is this going to put end to Las Vegas Real Estate? A classic checkmate 😦
December 18, 2012 at 3:32 pm
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