Nevada Supreme Court Decision re HOA Superpriority Lien

  • September 23, 2014

On September 19, 2014, the Nevada Supreme Court in a 4 to 3 decision decided a very significant HOA Superpriority Lien case. The NV Sp. Ct. ruled that a non-judicial foreclosure of an HOA lien for unpaid assessments does in fact wipe out a first mortgage holder. The end result is that a buyer at an HOA foreclosure sale may take the property free and clear of the first loan deed of trust.

In SFR Investments Pool 1  v. US Bank, 130 Nev. Adv. Op. 75 (9/19/14), the Nevada Supreme Court reversed the District Court and found that (1) the superpriority lien for assessments (found in NRS 116.3116) is a true superpriority lien and has seniority even over a first deed of trust.  As a result an HOA foreclosure sale will wipe out the lender’s interest as a junior lien, and (2) the statute authorizes the HOA to conduct a nonjudicial sale to foreclose its lien and does not require the HOA to file an action to judicially foreclose the lien.

The Supreme Court sent the case back to the District Court to resolve the case consistent with the Supreme Court’s opinion. That should result in the District Court quieting title in the investors and issuing an injunction preventing the foreclosure by the mortgage lender.

This is a huge victory for investors who buy at an HOA lien sale and pay a modest sum (perhaps as low as five to ten thousand dollars) at the HOA sale. It is a huge defeat for lenders – in this case USBank’s first loan of almost $900,000 was entirely wiped out by the HOA sale – and raises the public policy question of whether lenders will be willing to lend on HOA properties in Nevada.

We expect that this will be a significant issue when the legislature meets again in 2015.

Wilderness Act Turns 50

Wilderness Act Turns 50

  • September 2, 2014

By Andrew N. Wolf, Attorney at Law

This coming week, an important piece of the American experience turns 50 years old. The Wilderness Act was signed into law by President Lyndon B. Johnson on September 3, 1964. The Act established the legal definition of Wilderness in the United States, and a process for designating a Wilderness area. When Johnson signed the law, he declared: “If future generations are to remember us with gratitude rather than contempt, we must leave them a glimpse of the world as it was in the beginning, not just after we got through with it.”

The Wilderness Act defines a Wilderness: “A wilderness, in contrast with those areas where man and his own works dominate the landscape, is hereby recognized as an area where the earth and its community of life are untrammeled by man, where man himself is a visitor who does not remain.” The Wilderness Act also created the National Wilderness Preservation System. Those of you who have explored Wilderness areas know that, generally speaking, when you enter a Wilderness area, you leave all forms of mechanized travel behind, and practice the method of “Leave No Trace.”

We are blessed to have numerous Wilderness areas to explore close by our homes in Lake Tahoe, Reno and surrounding cities. How special are these Wilderness areas? Take a moment to look at our website home page. As they scroll by, you will see two photographs taken by my hiking partner while we were backpacking in the Sequoia – Kings Canyon National Park Wilderness, along the John Muir Trail. One photo is the Fin Dome in the Rae Lakes Basin, the other is the Charlotte Dome at sunset. The leaders who enacted these laws to preserve places like this unblemished for future generations into posterity were visionaries. Such preservation of public lands is a profound attribute of our democracy.

Locally, the Nevada Wilderness Project and other grassroots wilderness organizations successfully advocated for the creation of about three million acres of new Wilderness areas in Nevada from about 1999 to 2013.

Here are some nearby Wilderness areas to explore in Nevada:

Alta Toquima Wilderness
Arc Dome Wilderness
Black Rock Desert Wilderness
Boundary Peak Wilderness
High Rock Canyon Wilderness
Jarbidge Wilderness
Little High Rock Canyon Wilderness
Mount Rose Wilderness
Ruby Mountains Wilderness
Table Mountain Wilderness

…and in California:

Ansel Adams Wilderness
Carson-Iceberg Wilderness
Desolation Wilderness
Emigrant Wilderness
Granite Chief Wilderness
Hoover Wilderness
John Muir Wilderness
Lassen Volcanic Wilderness
Lava Beds Wilderness
Mokelumne Wilderness
Monarch Wilderness
Mount Shasta Wilderness
Sequoia-Kings Canyon Wilderness
Trinity Alps Wilderness
Yosemite Wilderness

Please join me in recognizing the fiftieth anniversary of this important law by visiting a Wilderness area in the coming weeks or by simply cherishing your memories and photographs of your past visits to these great places.