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 Cory Brewer
Having a buddy who is a handyman, or a friend of a friend who paints in their spare time, is great…but trying to save a quick buck or two now could cost you, your brokerage, and your client a lot more down the road.
When prepping a home for the market or making inspection repairs, thoughtful consideration must be given to those who are hired to do the work. Movers, stagers, plumbers — they all fall into this category.
One recent example from my brokerage where this comes into play: A vendor was brought in to do some cleanup work in a top-floor condo unit of a multi-story building. Oops…he stepped on and broke sprinkler pipe up in the attic/roof space and damaged not only the unit he was working on, but the two units below as the water leak went wild. The insurance claim reached six figures and involved multiple home owners. Our brokerage policy is to only use vendors who are properly insured…and this is exactly why. This particular vendor came forward and processed the claim through his insurance.
Hiring someone on the cheap may sound good at first – especially when on a budget – but the time and money it costs to fix something that wasn’t done right the first time can really add up. Scrutinize your vendors and make sure that they will stand behind their work. If anything goes awry, your clients will thank you for recommending the right people to work with.
Cory Brewer is a REALTOR® in the Seattle area and Operations Manager at Windermere Property Management / LGA in Bellevue. Connect with Cory at www.wpmnorthwest.com.