A Las Vegas-area homeowners association is being sued after its collection agency demanded payment of some $629,000 in delinquent HOA assessments and legal fees levied against a developer's vacant lots.
A lawsuit was filed in Clark County District Court on Friday by receiver Douglas P. Wilson against the Southern Highlands Community Association.
Records show that Wilson was appointed Aug. 5 by that court as a receiver to supervise the Tuscan Cliffs development and undeveloped land known as Sierra Madre after their developer defaulted on loans.
After taking over, Wilson’s staff was surprised to learn that the HOA had encumbered more than 100 lots with liens and was threatening to foreclose on some of the lots because of unpaid assessments that had accumulated over six years.
The receiver’s staff also was surprised to learn that although these assessments had gone unpaid for six years, the initial levy against the lots wasn’t filed until June 2010.
"These are vacant lots. We have no documentation on how or why dues commenced on vacant lots and how nearly six years of dues were allowed to accumulate before the association took any action," Wilson’s staff said in a Sept. 16 email to the HOA’s collection agency, Alessi & Koenig.
Friday’s lawsuit said that despite requests for information about the liens to the Southern Highlands HOA and Alessi & Koenig, no one has gotten back to the receiver with his requests for information.
The information sought, the lawsuit says, is about how the amounts of the assessments were determined; under what section of the community covenants, conditions and restrictions (CC&Rs) and annexation documents were the assessments commenced and about alleged "discrepancies in the Southern Highlands Community Association’s ledgers."
The lawsuit seeks a determination of the accuracy and priority of the amount claimed due under each foreclosure notice.
It also asks for an accounting from the homeowners association about the liens as the HOA "is the only party in possession of the data and information that can verify the accuracy and priority of the amount claimed due under each notice of default and election to sell."
The lawsuit, filed by the Las Vegas law firm Snell & Wilmer LLP, also asks for an injunction barring the HOA from recording more foreclosure notices until the dispute is resolved.
Records show many if not all of the foreclosure filings against the Southern Highlands properties included dollar amounts in excess of the claimed HOA dues — amounts for legal fees and collection costs that have been the subject of numerous lawsuits involving several Nevada HOAs in recent years.
For instance, a filing against many of the Southern Highlands properties for $3,477 apiece in assessments demanded another $295 each for "attorney and or trustees fees" plus $50 each for costs such as notary, recording, copies, mailings, publication and posting.
This is the second such suit to be filed since September against the Southern Highlands Community Association.
Last month, Prem Deferred Trust filed a class-action complaint hoping to represent investors in foreclosed homes in Southern Highlands.
Prem Deferred Trust claimed it and other home purchasers had been required to pay off excessive and unlawful liens for HOA assessments and collection costs that had accumulated against the Southern Highlands homes during the foreclosure process.
Attorneys for Southern Highlands and Alessi & Koenig have not responded to requests for comment on either of the lawsuits.
The Nevada Supreme Court, in the meantime, has not yet ruled in a potentially pivotal case that could limit legal fees and collection costs investors in foreclosed homes must pay.
Already, Clark County District Court Judge Elizabeth Gonzalez ruled this summer that homeowner association "super priority" liens against homes for unpaid assessments are limited to nine times the monthly HOA assessment, plus costs for needed emergency repairs.
Such liens (not counting emergency repair costs) can include penalties, fees, charges, late charges, fines and interest — as long as it doesn’t exceed an amount exceeding nine months of assessments, Gonzalez ruled.
The HOA and collection agency industry, in the meantime, insist their fees are fair and that they must collect past-due assessments in order to balance HOA budgets.