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October 21, 2014

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Las Vegas judge blocks foreclosure by HOA collection agency

A judge in Las Vegas on Thursday issued a temporary restraining order blocking today's planned foreclosure of a home by a collection agency for a homeowner association.

Clark County District Court Judge Jessie Walsh issued the order after yet another homeowner sued the collection agency, Nevada Association Services.

Nevada Association Services (NAS) is at the center of legal and political battles over how much homeowners -- and investors in foreclosed homes -- should be required to pay for past-due HOA assessments, fines, fees and collection costs.

Several lawsuits are pending involving NAS and other collection agencies including a proposed class-action case in federal court in Las Vegas claiming NAS has violated the federal Fair Debt Collection Practices Act and other counts.

The suit 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).

Attorneys for NAS have denied those allegations and NAS says its collection activities are necessary to help homeowner associations meet budgetary needs at a time when those budgets have been squeezed by the glut of foreclosures in Southern Nevada.

Walsh on Thursday issued the temporary restraining order at the request of attorneys for Beatrice Management Group Inc., which says it owns a home at 7413 Midnight Rambler.

"The court finds that a foreclosure sale of the subject property would constitute irreparable harm according to the Nevada law that finds that real property is unique and a forced sale contrary to law would thereby constitute irreparable harm," the order blocking the foreclosure said. The order may remain in place until an April 12 preliminary injunction hearing.

Beatrice, in a lawsuit against NAS, said the foreclosure sale shouldn't proceed until the court has a chance to rule on what Beatrice calls "illegal charges, demands and fees being asserted by NAS in order to intimidate Beatrice into paying whatever unlimited and unfettered amount NAS claims in order to avoid foreclosure."

Beatrice charged in its lawsuit that NAS claims Beatrice owes the Terra Bella Homeowners Association $2,923 in unpaid monthly assessments -- when, according to Beatrice, it made seven payments to the HOA but those payments were returned to Beatrice's bank.

"More importantly, NAS now inexplicably claims Beatrice must pay $7,505 in order to avoid a foreclosure sale," the lawsuit charges.

"NAS has no authority, contractual or statutorily, to support or authorize the addition of nearly $5,000 in 'fees' and 'penalties' in order to avoid the foreclosure of the residence," charges the suit filed by attorney James Rosenberger of the Las Vegas law firm Pico Rosenberger.

The complaint added "NAS has refused to compromise or even discuss a compromise regarding the illegal and unlawful charges and demands they are making."

David Stone, owner of NAS, said today that temporary restraining orders are not unusual and don't reflect on the merits of the collection action.

"We're going to fight this and Beatrice will be paying my attorney's fees," Stone said, adding that the homeowner association has seen tenants come and go from the property at issue and "this isn't a sympathetic plaintiff."

With the Legislature looking at reigning in HOA collection fees, Stone said his fees haven't changed in six or seven years and that all that's changed is that there seems to be growing sympathy for those "trying to avoid their contractual obligations."

Separately, Las Vegas attorney and investor Puoy Premsrirut has responded to allegations leveled against her this month in a lawsuit filed by NAS and other collection agencies.

That suit claims Premsrirut and her brother Rutt Premsrirut, also an investor in foreclosed homes, have been abusing the legal system and intimidating homeowner associations in hopes of avoid paying legitimate costs.

But Premsrirut, who regularly litigates against collection agencies, said in a statement to the Las Vegas Sun: "In a retaliatory move, the debt collectors now attempt to silence the voice of the attorney and her brother by filing an `abuse of process' claim against them. Puoy and Rutt now ask, `When is it an abuse of process to demand due process?"'

Commenting on the class-action lawsuit filed by she and attorney James Adams against NAS, Premsrirut said that "Instead of meeting these allegations head on and defending his collection practices, NAS owner David Stone has apparently vowed to spend millions of dollars gained from his dubious collection scheme to crush Puoy's attempt to hold him accountable. On behalf of Nevada homeowners everywhere, Puoy has vowed to fight back!"

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  1. This is a good example of NAS's business practices. Stone "games" the legal system. My lawyer says "he is in the legal sweet spot". The place where his questionable fees are too small to litigate and large enough for him and others like him to get very rich.

    These collection agents abuse homeowners daily!

  2. if anybody wants to file a class-action lawsuit against Hampton & Hampton for HOA Collection Practices, let me know. I'd like to get in on that.

  3. Some men rob with a gun and some with a fountain pen.

  4. HOAs are like a cancer (the uncontrolled growth of unwanted cells) that invades the homeowners every moment, forcing changes that strangle the life out of him or her, to no good outcome.

    HOA collection agencies are like a mold upon that cancer. They are that oderous substance that offends all that come near, grows best in dark dirty places and once in is often impossible to remove.

    The only solution is prevent the mold from spreading and cut the cancer out or starve it until it dies or shrinks to an inoffensive and tiny mass that becomes absorbed and neutralized, taking the offending mold with it and freeing the patient.

    As in all cancers cut out or starved, one must always guard against reoccurrence. All necessary measure must be take to prevent it from feeding, gaining strength and common entrance.

  5. Well, I've said it many times but I don't and won't buy homes in neighborhoods with homeowners associations. I was with a guy once who had a dead car battery and as I helped him swap it out in a five minute job the homeowners police (association board) came running over and warned him of a fine for the forbidden practice by cc&r's of car maintenance. They didn't know the difference between an optional oil change on the sidewalk versus swapping out a dead battery. Rules are rules you know! I've seen those same police in a different neighborhood walking around measuring the heights of peoples grass while they were on vacation. Between the money and the special interests I'd much rather look at a purple, polka dotted volkswagon sitting in somebodys yard than have to deal with the morons who all too often end up on the association boards taking care of their own agendas.

  6. Having lived in three states with HOA's I can say Nevada's system is horrible. In VA the HOA cannot foreclose and there are strict limits on Fines, Notification methods, etc.. Prior to a home selling, a letter from the HOA is required that all Payments and Improvements are paid and met. The responsibility rests with the seller to meet the obligation or there is no sale. Most HOA's are managed in the Neighborhood and all meetings must be open (even though there may not be a comment period). If I put a warning on someones door I had to state the specific rule in the HOA regs plus I left my name and phone number so they could call me. In my current Nevada neighborhood when someone from California drives through and makes broad sweeping statements about what they think should be done, while having no involement in the community, I would just as soon eliminate the HOA.

  7. "Some men rob with a gun and some with a fountain pen."

    WoodySez1 -- you mean that old saying "a man with a briefcase can steal more than a man with a gun."

    BRASS, lightfoot, newnvres -- of course any group of people with common interests are free to associate and make contracts. The problem I've seen is when one buys a home in an HOA then it comes down on you to deal with whatever leftovers the last owner or occupant neglected. I backed the attorneys off by demanding proof of the debt, which they did not or could not produce. Six months later another demand, same as the last demand, except with bigger numbers on it. The attorneys didn't bother to prove that one, either.

    Anyone else notice how in the last 20 years this country moved almost completely from a production-driven economy to debt-driven?

    "All money is a matter of belief." -- Adam Smith

  8. Judge is expected to rule on the law. However, the judges can decide based on either parties intent-- rule either side actions unreasonable-- the judge could deviate slightly.

    One thing is certain, the HOA and the NAS will receive an unknown amount of money from the homeowner.

  9. You gotta wonder what kind of morons buy into these HOA situations. All property owners pay property taxes, and some of those taxes pay the city's "neighborhood services dept." So anyone can call neighborhood services if there is a gross eyesore in the neighborhood, and it gets investigated, and the city fines the property owner if the problem is not corrected. So, the idiots in HOA's pay for the city to regulate them, but they also pay some dumb HOA to regulate them.
    That is an un needed duplication. The HOA's, collection agencies, management companies, and lawers are just an entire industry of leeches sucking home owners dry. I am so glad I did not buy into that nonsense.

  10. Seems to me that every person who buys into a neighborhood that has an HOA knows full well what they are doing. You are given the information on what is allowed and not allowed within your community and you know the cost of what the HOAs DO provide for their community. Whether or not people like HOAs is one issue and that is one to be taken up with the HOA itself and with their neighbors, their community. It only lands in the lap of these collection companies when someone is not doing what they are obligated to do...pay the HOA bill that they signed up for. I will never understand the concept of people wanting to blame someone else when they have been irresponsible. Let's blame the debt collectors for asking us to be accountable...it is insane. I once got a seatbelt ticket. It was $37. I thought I mailed the check. I didn't. The next I heard of it was when I was denied renewal of my drivers' license and ordered to pay over $400 to get back in the good graces of the law and the DMV. Is that nuts? Ummm, a little. Whose fault is it? Mine! I paid the fees and will never again forget to pay a ticket. I am not suing the DMV or the city for my mistake.