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Saturday, Dec. 18, 2010 | 2:05 a.m.
Another lawsuit was filed Friday in the ongoing battle over fees Las Vegas-area collection companies charge to homeowners — and investors in foreclosed properties — over debts to their homeowner associations.
Two homeowners filed a lawsuit seeking class-action status in federal court in Las Vegas against debt collector Nevada Association Services Inc. and its president, David Stone.
The suit charges violations of the federal Fair Debt Collection Practices Act and other counts.
It claims Nevada Association Services has been demanding collection fees and costs that were never authorized by homeowner associations, never incurred by HOAs and never agreed to by homeowners in community covenants, conditions and restrictions (CC&Rs); “and thus did not constitute a ‘debt’ owed to the” HOAs.
Stone on Friday denied the allegations and said he’ll be fighting the lawsuit and filing his own suit against one of the attorneys who filed Friday’s suit.
The lawsuit charges no law or contract, such as HOA CC&Rs, allows for Nevada Association Services to impose directly upon homeowners “any amount of collection fees or other such charges at the sole discretion of the debt collector.”
The suit claims Nevada Association Services’ collection fees and costs billed to homeowners “have skyrocketed, often dwarfing the principal amount of the original debts.”
The suit also said the collection company’s practice “is particularly outrageous because defendants act to cloud title to the real property of the plaintiffs and the proposed class members by maintaining alleged liens against the properties for the unlawful collection fees.”
The suit also said Nevada Association Services has been threatening to record delinquency documents on homes when Nevada code doesn’t allow for the recording of such a document; and threatening to foreclose on homes over unlawfully-imposed collection costs.
“By suggesting in (initial demand letters) that the delinquent lien notice was a lien, when, in fact, the document was not a lien, but merely a notice, defendants violated” the federal act regulating debt collectors, the suit charged.
“By stating that the HOAs would ‘soon proceed with a non-judicial foreclosure,’ when, in fact, defendants and HOAs had no intention of soon proceeding with non-judicial foreclosure auctions, nor did they have a legal right to foreclose because the amount demanded included collection fees and costs which were never expressly charged, approved or authorized by the HOAs, were never incurred by the HOAs, were never expressly agreed to by (homeowners) in the CC&Rs, and thus, did not constitute a ‘debt’ owed to the HOAs, defendants violated” the act, the suit says.
The lawsuit, which seeks to represent thousands of homeowners as class-action members, seeks among other things an injunction barring Nevada Association Services from violating state and federal law in demanding and collecting “improper or unauthorized collection fees.”
The suit was filed by attorneys including James Adams, who regularly litigates against HOAs and their collection companies.
Stone denied the allegations in the lawsuit and said he plans to sue Adams for abuse of process.
“He’s been unsuccessful in state court and he’s just forum shopping,” Stone said.
The lawsuit comes at a time when HOAs, hit hard by a shortage of dues because of foreclosures in their communities, need the revenue his company generates, Stone said.
“If he (Adams) had his way, all the HOAs would be bankrupt and unable to pay their bills,” Stone said.
"Debt Collectors"...
Haven't changed much since biblical times;
Scum of the earth.
Hey - here's a kookie idea for Mr. Adams: howzabout just paying your debts in the first place? Don't be a deadbeat and you won't have to worry about collections. As someone who lives in an HOA, I am tired of leeches like Adams and/or his clients who feel they get to buy a house on the cheap, flip it, and have the other homeowners in the HOA pay his debt.
We need more regulation.
The HOA give lenders 2 ways of getting the property.
HOw about we all stick to this rule: if a home has an HOA, DON'T BUY IT. That will put an end to these bloodsucking leeches once and for all.
HOAs are USELESS - they do NOTHING To help you when you have a horrible tenant neighbor renting the house next to you, and they harass you nonstop over trivialities like 2 small weeds in your driveway. I'd rather have ringworm than an HOA.
Comment removed by moderator. Threatening comment.
Our HOA fees keep going up and up and I wonder who actually gives the HOA the right to enforce those fees.
HOA'S, can be a wonderful thing if ran right. In a shell here is the problem. One is the lawyers, two is the state and three is the Management Companies. All three have there hooks in the HOA Boards. The state is controled by lawyers that make the laws. The lawyers in the cities look for ways to sue the HOA's, the management compainies, they let the board members know their HOA is being sued. I am in an HOA and true, the board has their hands tied from all the above. The laws that has been made up in the past, effects us all now. The sad thing is most of us are not LAWYERS and that is were the leaches start sucking.
@VEGASONNE HOA fees go up because the amount of foreclosed homes is making their revenue dry up. All HOAs suck and are blood sucking parasites.
Another example of political cowardice by your elected leaders. They will allow the courts to decide what to do about the tactics of HOA's.
The average non- strip condo has an association fee, that equals 40% of what the monthly payment is.
If you are buying a home the HOA will try to stick you with back payments, and any other fees they can get away with.
If you are in the market for a home or investment property, beware of anyone who is still using "This house sold for ............ a short time ago.
NAS holds the HOA's hostage with their ridiculous charges to the homeowners. And MRED we DO NOT need more regulation, we need the government to step out of our lives MORE. Unless, of course, you'd prefer not to buy your kids a Happy Meal again. Or was it you I saw the other day eating that Happy Meal! LOL
I'm looking for a new residence in the Vegas area. Difficult for me to consider a condo when there is seems to be no limit to HOA fees. And now this nonsense about collection fees. Companies are already making profits on the HOA fees. That should not be allowed. A small house without the $200 a month HOA fees is a better alternative even though as I age a condo might be easier living.
The only people who have to deal with the collection fees are the deadbeats who are stiffing their HOAs. These are often the same folks who bought properties they knew they couldn't afford, gambling that they would be able to resell them at a quick profit or refinance them. I am unable to feel much sympathy for them. They gambled and lost. Pay up or get out.
The problems is with unregulated collection agencys, not the HOA's. I doubt the HOA's are seening any of the additional money being collected. The Collection Agencys are the problem, not the HOA's who are just trying to keep the communities nice.
HOA's are a requirement that the your local city puts upon a builder before he ever gets his permit. The first copy is full of generic rules and regs. It is up to the residents to adjust it for their community. They can be changed, they can be adjusted. It's up to the residents. Oh wait, they rarely go to the meetings. Get on your HOA Board...change it! I did, it worked. Our inspectors are now banned from their inspections, we will do it ourselves. The Management company works for us, we pay them. They dont like it but they have to. One of our out of work residents performs the maintenance and gets full pay for it now. Our costs have been reduced, the yards are nice. Take back your neighborhoods! Don't allow your management companies to control it, they don't live there. You live there!
I'd never buy a home in a HOA. Just more government only without real oversight. Ambitious people with hidden agendas usually end up running the things. The first thing I tell my realator is no association. Like somebody said, hundreds of dollars in fees so that somebody can come around and give you crap about the dandelion growing in the driveway crack.
The LVMCR Owners Association provides a very good example of why lawsuits such as this one is necessary and illustrates the need for additional regulation of HOA's and Collection Agencies.
Recently, the LVMCR Owners Association imposed over $8,000.00 in Special Assessments on the owners, for an unauthorized and unapproved purchase. And now they are using RMI Management and their subsidiary Red Rock Financial (a Collection Agency) to charge owners Late Fees in excess of $800.00 per month. Despite being advised, by legal counsel it would likely be considered punitive and challenged. Additionally, they are seeking outrageous collection fees, threaten liens, non-judicial foreclosure and personal judgments.
Frankly, I hope James Adams or one his representatives, contact me. I would join a class action lawsuit today.
I believe there need to be a law against collection companies and the collection of fees that are way beyond the amount it takes to collect deliquent payments. Collection companies like Nevada Associate Services are nothing more that a strong arm to loan sharks and other business. I hope the legislators in Carson City address this issue and put restrictions on how collection agencies can collect fees and how much they can charge for their services.
Two things:
1) Those who do not know the difference between HOA's (possessive) and HOAs (plural) should not be commenting on anything;
2) A survey 5 yrs ago shows over 90% of people enjoy living in their HOA.
So, let's keep things in perspective. It is those nut jobs who cry "sky falling" when it is not. HOAs (not HOA's) are a wonderful place to live.
HOAs ensure that anyone who bought a home here, will never actually own it... As well, you can expect with all the foreclosures the fees will continue to rise.
I live in a community with HOA. I like my neighborhood clean and organized. My HOA fees has gone down and hopefully stays down because of the diligence from our management company and the board of directors at my complex. I want the board of directors and the management company to use collection agencies to collect fees not being paid. The more they collect, the better for us RESPONSIBLE HOMEOWNERS paying dues on a timely manner. I DO NOT WANT TO PAY EXTRA MONEY because some IRRESPONSIBLE HOMEOWNER DID NOT PAY THEIR SHARE OF ASSOCIATION FEES.
Your Property Management companies are under a contract with your HOA. Their contract does not have to be renewed. They can be "let go". I remind mine as often as I need to. I do not live in a "complex", it is a regular unattached home. Take control of your own HOA. It can be done!
NAS has sent my friend a forclosure notice the day before Thanksgiving. The date of sale is Dec 23, 2010. WOW HAPPY HOLIDAYS!!! This dispute if not about past do money to the HOA. This is all about outrageous fees NAS wants to charge him. My friends Morage and HOA is paid up to date. How can someone get their home forclosed on when everything is current? NAS seems to have found a way to do this... We need stricter laws for collection agency. NAS is not acting on behalf of his HOA they are trying to get money for something they are not do.