Legal Alert - Lenders Beware: the Nevada Supreme Court Holds That Foreclosures of Homeowners' Association Liens May Extinguish First Priority Deeds of Trust
By Bob L. Olson
Nevada has adopted the Uniform Common Interest Ownership Act of 1982 (the “Act”) which governs homeowners’ associations (“HOA”). One particular provision of that Act, enacted by Nevada in 1991 and later amended, and codified as NRS 116.3116 (the “Statute”), states that HOA liens are “prior to all other liens and encumbrances on a unit” except for, among other liens:
(b) A first security interest on the unit recorded before the date on which the assessment sought to be enforced became delinquent . . . :
NRS 116.3116(2)(b) (emphasis added).