By Tara Owen
Mention Home Owner Associations (HOAs) to any Las Vegas home owner and you are sure to get a passionate love them or hate them response. Many home owners I’ve met with are bitter over the fines imposed by HOAs for seemingly trivial violations.
The ongoing controversy of fraudulent practices, excessive assessments, and egregious collection costs of HOA fees on Las Vegas home owners has reached national attention as two local attorneys have filed a federal lawsuit against hundreds of Nevada HOAs and collection agencies.
Attorneys Puoy Premsrirut and James Adams filed the lawsuit under the False Claims Act against 500 Nevada HOAs in a federal court last year. The lawsuit, which can be read in full http://www2.8newsnow.com/docs/hoa_lawsuit.pdf, was unsealed in April to reveal allegations of conspiracy to fraud the United States government by overcharging Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac in excess of $15 million dollars in assessments and collection costs on REO properties.
Strategically getting the U.S. government involved in this recent lawsuit is a brilliant move by Premsrirut and Adams, which falls in a series of lawsuits filed over the years fighting the alleged crime of exorbitant in the HOA collection fees being charged to Las Vegas home owners.
The attorneys insist that under Nevada law NRS 16.3116, in foreclosure situations, the assessments and costs that can be levied against delinquent properties “are limited to nine months immediately preceding institution of an action to enforce the lien unless federal regulations adopted by Fannie Mae or Freddie Mac require a shorter period of priority for the lien in which case the nine month period is reduced to a six month period.” Fannie Mae and Freddie Mac have adopted such underwriting guidelines, which limits the HOA “super priority lien” — a lien superior to the first mortgage — to 6 months in the Federal Loan Mortgage Corporation Act 12 U.S.C 1455.
The HOAs listed in the lawsuit allegedly charged Fannie Mae and Freddie Mac every month the HOA dues went unpaid, along with additional late fees and collection costs for past due obligations. Continue reading »
By Scott Newman
With the market picking up steam, buyers are out there scooping up homes and they’re counting on you as their agent to help them navigate the treacherous waters of their transaction. When they are buying a condo, that path can be filled with even more landmines, and you have a whole new realm of elements to account for when advising your buyer clients. I’ve outlined some best practices for agents below who are representing buyers purchasing a condo.
Understand the Financials
Nothing will make you look more foolish than advising your client to make an offer, having it accepted, and then finding out there is something wrong with the building that prohibits financing. Review condo documents and know what’s going on with the overall health of the building your client is interested in — this is not just your attorney’s job post contract execution — it’s your job before your client ever puts pen to paper! Request a 22.1 disclosure, call the management company, speak to the listing agent — do whatever you need to do to ensure that the building your client wants to buy in qualifies for the type of loan your client is applying for.
Know Your Client
I cannot tell you how many times I’ve had a listing that gets put under contract, only to have the deal fall apart for ridiculous reasons that could have been brought to light long before an offer was made. Again, as the buyer’s agent, your job is to stay on top of these situations to ensure that you come across as a professional and that your client isn’t wasting their time. The only way to do this is to ask the right questions!
Do your clients have a dog or are they planning to buy one during their residency in the building? Are they planning to smoke inside their unit? Do they like to host company during very late hours? These can all be potential issues for a client as the rules in condo buildings can vary wildly, so it’s never safe to assume anything!
All of the above are examples of questions you should be asking to ensure that your client isn’t wasting their time. Get the right information ahead of time and call the HOA or listing agent personally to ensure that your client’s unique needs will be met by the building.
Do Your Homework
The time to find out whether or not the building has a pool or how nice the gym is should not be when you show up to the property with your client. Continue reading »