Bank of America sues HOAs

In a new twist, Bank of America filed suit in Clark County District Court earlier this week against numerous Homeowner Associations which foreclosed on homes wherein the Bank had secured mortgages. The suit claims that the HOAs are pursuing more than the statutory nine-months worth of assessments allowable under state law, and instead are filing liens that include payment of attorney’s fees and collection costs. These extra costs can really add up.

Information on the case:
Business Court
Date Filed: 10/16/2012
Department 29
Case Number: A670230

The bank filed suit Tuesday in Clark County District Court charging that state law limits the ”super-priority” first-position liens that HOAs can place against homes to an amount equal to nine months of HOA assessments — but that the HOAs are “improperly” filing liens demanding payment of attorney’s fees and collection costs on top of that.

These liens typically cover unpaid HOA assessments that accumulate while homes in foreclosure sit vacant, as well as costs to collect those unpaid bills. Charges that the HOAs and their bill collectors have been inflating the liens are pending in numerous lawsuits, with many attorneys expecting the Nevada Supreme Court or the Legislature to ultimately decide what limits should be placed on the liens.

In one recent example, a homebuyer was forced to pay off a $5,895 lien placed by the Spring Mountain Ranch HOA, but charged in a lawsuit that state law limited the HOA’s lien authority in that instance to $357, with the remainder representing an “unlawful lien amount.”

Published by Stout Law Firm

I have passed three bar exams

Leave a Reply