Nevada Legislature: Lawmakers want to pare down HOAs’ power in foreclosure

Lawmakers who say a recent Nevada Supreme Court decision gives homeowners associations too much power to foreclose over unpaid dues are pushing a last-minute legislative fix.

Republican Assemblyman David Gardner is sponsoring Assembly Bill 359, which would change rules on so-called “super-priority liens.”

The high court ruled in September that unpaid HOA dues should not only be the first thing paid when a foreclosed home is sold, but that the mortgage itself can be wiped out in the process if a bank doesn’t pay the lien.

Realtors say mortgage “extinguishment” has led to expensive homes being auctioned for a fraction of their worth over relatively small HOA liens and could drag down other property values.

Advocates for HOAs say they need to keep the super-priority status so banks take their liens seriously.