HOAs have recourse in lien times

By Brian Eckhouse (contact)

Friday, June 27, 2008 | 2 a.m.

Homeowners associations trying to force owners of foreclosed homes to comply with neighborhood rules have at least one safeguard: liens.

As the Sun reported this month, HOA fees are generally among the first bills struggling homeowners quit paying. Those fees and resulting fines tend to mount, especially if the home enters foreclosure. If a bank or lending company assumes ownership of the property, it could be months before the HOA recoups that money. The foreclosure process itself takes up to four months.

And because HOAs can collect a maximum of six months of back dues, liens are sometimes the best recourse.

A lien is a claim, filed in court, on the property of another person to secure the payment of a debt or the satisfaction of an obligation.

Richard Cherchio, president of The Parks HOA in the Aliante section of North Las Vegas, estimates that the number of liens slapped on homes in his subdivision has jumped 30 percent to 35 percent in the past year or so.

HOAs generally bear expenses for the foreclosure and lien process, especially at its onset.The cost is often $1,600 to $1,700 per home, Cherchio says.

“When you have 10 (in foreclosure), you’re talking about maybe $16,000 you have to lay out” from the HOA operating budget, Cherchio says. “You might not be able to get that back.”

But the $1,600 spent per home on legal bills can prove a worthwhile investment.

Las Vegas Valley resident Mike Krien, president of the National REO Brokers Association, notes liens in Nevada can survive the foreclosure process, “which means the HOA can end up with a property free and clear.”

That’s rare, analysts say, for a variety of reasons. But according to Elisabeth Shurtleff, spokeswoman for the state Department of Building and Industry: “If an HOA puts a lien on a property, they can foreclose on it if it’s not paid. They’d (go) through the usual foreclosure process as any lienholder, like a bank ... and then they would own the property.”

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The valley’s foreclosure epidemic has property owners and real estate brokers altering how they advertise housing units and/or their contents.

Anyone who scoured the consumer site Craigslist.com for apartments to rent last fall would have found numerous ads for “quality living,” complete with photos that might or might not have been an accurate representation of the premises.

Today, the hype remains but there’s an apparent trend of new phrases in some postings, including: “home not in danger of foreclosure.”

The foreclosure crisis is a theme in many of today’s postings.

As the Sun documented last month, renters can be — and are being — kicked out of foreclosed homes long before their leases end.

Some homeowners losing properties to foreclosure stage their own “foreclosure sales” — selling every last item inside. With every dollar increasingly important — and scarce — some homes are being stripped to the foundation.

One Henderson resident whose home is in foreclosure is selling ceiling fans, light fixtures, faucets, mirrored closet doors, stainless steel appliances, custom cherry cabinets and wood laminate flooring: “You remove and it’s yours for a great deal.”

Another local homeowner, who does not list where the property is, offers a 50-gallon gas water heater as well as a stove, a dishwasher, a garage door opener, an alarm system and the iron gate on the front door.

Welcome to the Las Vegas Valley’s fallen housing market.

Cherchio says stripped homes are increasingly common across the valley. In his HOA in North Las Vegas, neighbors recently found one property — a rental — stripped empty. But neighborhood residents suspect foul play.

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Readers have asked how to get fetid swimming pools in the yards of foreclosed homes cleaned up.

Cherchio says HOAs can’t arbitrarily drain these pools for liability reasons, so he tends to contact North Las Vegas’ Building and Safety or Police departments.

Another option is calling the Southern Nevada Health District’s vector program. One of the program’s missions is to remove mosquito larvae. Stagnant pools can become havens for larvae, which sometimes carry West Nile virus.