Jon Morgan, Vice President and Chief Title Officer at Equity Title, joined us for a couple segments during our July 27th radio show broadcast and shared timely truths about Homeowners Associations (HOA) and how they can affect the title to a property and even foreclose.
Jon explained that because Nevada is a super lien state, the HOA can file a lien and foreclose on a property due to unpaid assessments or fines from unresolved violations at the property. Jon mentioned that more often the HOA will file liens and pursue foreclosure from unpaid periodic assessments but unpaid fines from violations are just as dangerous. He added that the timeline for a HOA foreclosure is the same as a mortgage foreclosure and follows the same “non-judicial foreclosure sale” which is essentially a traditional open auction.
The $64,000 question with HOA liens and foreclosures though is what happens to the mortgage on the property when the HOA forecloses. Jon shared that this issues is subject of many lawsuits as you have the bank holding the mortgage on one side trying to persuade a judge that their loan and deed of trust should have priority over the HOA lien as most of the time the amount owed on the mortgage deed of trust is a WHOLE lot more than what is owed on the HOA lien. However with the super lien priority status that the HOA is given in the state of Nevada, it becomes a very gray issue of clouded title that can take some time to clear up.
We always get such great content and information for our listeners from Jon Morgan at Equity Title and we appreciate him filling in for Tracy Ruccia as a guest this week. Please tune in every Sunday on KDWN AM 720 at 4pm to listen to our latest show. You can also subscribe to our YouTube channel to watch this video along with all the others.