The Mountain’s Edge planned community homeowners association is the latest to be sued by investors in Las Vegas-area foreclosed homes.
The investors, who already have filed complaints against scores of HOAs with state real estate regulators, lately have also been suing individual HOAs.
In the suits, filed in Clark County District Court, the investors claim the targeted HOAs have been gouging buyers of foreclosed homes. More specifically, the accusation is that HOAs inflate liens against homes and then require that buyers erase the liens by paying excessive HOA dues, fines and collection costs that accumulated while the homes sat vacant during the foreclosure process.
The suit against the Mountain’s Edge Master Association, filed last week by an investment group called the Prem Deferred Trust, seeks class-action status on behalf of buyers of property there who have been required to pay "unlawful lien amounts" and "excessive covenants, conditions and restrictions amounts."
The investors say in the suit the Mountain’s Edge HOA has been "making improper, inaccurate and/or excessive demands for claimed assessment and collection fee amounts."
In one transaction, Prem Deferred Trust charged in its suit, the HOA demanded that it pay $1,911 to obtain a clear title for a home at 8420 Carbon Heights Court that Prem had purchased out of foreclosure.
Prem said that under the Mountain’s Edge CC&Rs, the most it was obligated to pay the HOA was six months’ of HOA due assessments, or $150.
"Defendant falsely demanded from plaintiff $1,911 for assessments, costs and fees," the suit says. "This resulted in a large overpayment of amounts due by plaintiff to defendant."
"By repeatedly employing this very scheme hundreds of times over the last several years, defendant has demanded and collected monies from plaintiff and the proposed class that was not owed and to which defendant had no legal entitlement," the suit charges.
The Mountain’s Edge HOA has not yet answered the lawsuit. A request for comment was placed with the HOA.
The Southern Nevada HOA and debt collection agencies have been fighting back against similar lawsuits.
They say Las Vegas-area HOAs have seen their budgets threatened as homes go into foreclosure and no one pays dues and fines that pile up during the foreclosure process.
In court, attorneys for the Aliante HOA in North Las Vegas and the Southern Highlands HOA south of Las Vegas are fighting back against similar suits filed by Prem.
Attorneys for the Aliante Master Association filed papers in court last month saying the Aliante HOA had properly encumbered a property there with a lien for nine months of delinquent assessments, late fees, collection costs and interest and that Prem’s lawsuit is "without merit."
The Aliante attorneys said the nine months of assessments "plus related costs" is allowed by Nevada law.
In the Southern Highlands case, attorneys for that HOA are arguing investors in foreclosed homes need to go through the mediation and arbitration process at the Nevada Division of Real Estate before bringing their claims to court.
It’s currently unknown when or if the Aliante, Southern Highlands and Mountain’s Edge lawsuits will advance to the trial stage.
Attorneys for investors in foreclosed homes scored a recent victory in a fourth lawsuit, this one against the Horizon at Seven Hills Homeowners Association in Henderson.
Clark County District Court Judge Mark Denton last month ruled that HOA can collect from buyers of foreclosed homes no more than an amount equal to nine months of assessments plus emergency repair costs.
This was the second such ruling in 2011. Earlier, Clark County District Court Judge Elizabeth Gonzalez agreed there was a nine-month cap under state law.
Her ruling said HOA "Super Priority Liens" (not counting emergency repair costs) can include penalties, fees, charges, late charges, fines and interest – as long as the liens don't exceed nine months of assessments.
The rulings on the nine-month cap are similar to a 2010 ruling on the issue by the state Financial Institutions Division, which regulates collection agencies.
Collection agencies gained an injunction against the division’s nine-month cap ruling and the division appealed to the state Supreme Court, which has not yet ruled.