By: R. Duane Frizell, Attorney, Frizell Law Firm
Notices of HOA Redemptions
Technical compliance may not be required in notices of homeowner association (HOA) redemptions. In 2014, the Supreme Court held that HOAs had a “superpriority” lien that, when foreclosed, extinguished a first deed of trust and vested title in the foreclosure sale purchaser “without equity or right of redemption.” In 2015, the Nevada Legislature quickly created such a right. It gave the original owner and other lienholders 60 days to redeem the property by paying certain amounts and serving a notice of redemption together with a certified copy of their deed or deed of trust. This year, the court determined that “technical compliance” with the notice procedures was not required when the purchaser had actual knowledge of the original owner’s intent. (Here, the entity conducting the sale sent the purchaser an email.) The lack of a certified copy of the deed did not defeat the right to redeem either.
Notices of HOA Defaults
Notice must go to the address in the deed of trust, but then again, alternative notice may be permissible. The Supreme Court held that, in an HOA foreclosure sale, the HOA violated statutory requirements when it sent a notice of default to a lender at an address other than the one designated in the deed of trust. Even so, the court also concluded that such a requirement would not necessarily be mandatory if the lender received timely notice by “alternative means” and suffered no “prejudice” as a result.
Notices of Commercial Lease Defaults
A primary tenant’s actual notice may be sufficient, and a subtenant may not need notice at all. The Court of Appeals held that although a commercial landlord did not “strictly comply” with a lease’s notice requirements, it could still terminate the lease because the primary tenant had “actual notice” of the default. It further held that even though the landlord violated the lease’s terms by failing to give the subtenant notice, the lease could still be terminated because the subtenant was not a third-party beneficiary of the lease.
Equity increased, but protection decreased. The Legislature increased the homestead exemption from $550,000 to $605,000. It also changed the general rule that, apart from holders of liens recorded prior to a homestead declaration, judgment creditors may not execute upon proceeds of a homestead’s sale. Now, this exemption only applies when the seller reinvests the proceeds into a like-kind property that will be declared the new homestead; the seller identifies the new homestead within 45 days after the sale; and the seller takes possession of the new homestead within 180 days.
Tax Sales for Abandoned Properties
Owners get less time. The Legislature created an expedited procedure for the sale of abandoned property with delinquent property taxes. Now, the county treasurer need only give 45- days’ advance notice of the sale, instead of the regular 90 days. The owner of the property will also only have a one-year redemption period, instead of the regular two years.
Perpetual Charitable Trusts and Property Arrangements
There is an unlimited time allowed for these. The Legislature has provided that, unlike most private agreements, charitable trusts and other property arrangements may now exist in perpetuity.
Article originally published in Nevada Business Magazine