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90 Upon redemption, title would vest in the name of the redeeming lienholder. In other words, the lienholder could skip its own foreclosure and market the property as an REO. Since the redemption amount and process will be new, we suggest contacting counsel before redeeming any property following an HOA sale. Pre-Sale Right to Pay Off the HOA Lien: Section 6 of SB 306 amends NRS 116.61166(1) to provide that, if a lienholder pays the super-lien priority portion of the HOA lien "not later than 10 days before the date of sale" and records notice of "such payment" in the appropriate county recorder's office "not later than 5 days before the date of sale," the HOA sale will not extinguish the lienholder's interest. Description of the Super-Priority Amounts: Section 2 proposes to amend NRS 116.31162 to require that the Notice of Default ("NOD")specifically describe the (1) amount of the HOA lien that is senior to the first priority deed of trust; (2) the nature of those amounts, i.e., dues versus other items; (3) the costs of enforcing the HOA lien; and (4) that, foreclosure on these amounts will eliminate a first priority lien. Sets Recoverable Fees for the HOA: Section 1 proposes to amend NRS 116.3116 by adding subsection 5, which specifically sets the collection costs that will be senior to a first priority deed of trust-demand letter ($150); notice of delinquent assessment ($325); intent to record a NOD ($90); NOD ($400); and Trustees Sale Guaranty ($400), for a total of $1365. No other enforcement costs, including attorneys' fees, will be senior to a first priority deed of trust. is provision will provide some well needed clarity in what the mortgage lienholder must pay to pay off the HOA lien and protect the mortgage from extinguishment. Payment to HOA is Additional Debt under the Deed of Trust: As long as it does not conflict with any other provisions of federal or state law, any payments by a lienholder of an amount due to the HOA in accordance with NRS 116.3116(1) "becomes" additional debt owed by the property owner. (Section 1 of SB 306, amending NRS 116.6116(16).) Nevada Mediation Protection Modified: Under existing law, the HOA cannot foreclose between the date that a first priority lienholder records its NOD and the date the Foreclosure Mediation Program Certificate records. Section 2 of SB 306 proposes to amend NRS 116.61162 to provide an exception to the above limitation if the owner is not paying the HOA dues while the property is in the Mediation Program. Of course, that will generally be the case. Additionally, Section 8 of SB 306 proposes to amend NRS 107.086(2)(d), by requiring that the mortgage lienholder's foreclosure trustee notify the HOA within 10 days after mailing the NOD, that the property is subject to the Mediation Program. Further, NRS 107.086(9) is amended to require that the mortgage lienholder's foreclosure trustee provide notice of the Mediation Certificate to the HOA within 10 days of receipt. Notice to Lienholders: Section 3 of SB 306 proposes to amend NRS 116.31163 to specifically require that the HOA mail a copy of the NOD to any recorded lienholder (recorded prior to the NOD) or, if applicable, its registered agent for service of process. Section 4 proposes the same requirement for the Notice of Sale (NRS 116.311635(1)(d).) is means that lienholders must ensure that their registered agents for service of process can recognize the NOD or NOS and know where to send it upon receipt. SB 306, section 4, also requires that the HOA post and publish the Notice of Sale (NRS 116.311635(1)(a) and (b)). Sale Process Must be Commercially Reasonable: While way too late, section 5 of SB 306 will amend NRS 3116.31164 to require that the HOA sale process must be "commercially reasonable." Clarification of the Request for Notice Process: Section 7 of SB 306 proposes to clean up the Request for Notice provisions of NRS 116.31168. e proposed language will require that the Request for Notice provide (1) the name and address of the person requesting notice; (2) identify the recorded document that request is being made under; and (3) the names of the "unit's owner" and the HOA. Since the name of the owner can be different than the lienholder's borrower, this provision may continue to provide trouble for mortgage servicers. And as servicers have found since the SFR decision, it is often quite difficult to identify the name of the HOA or the HOAs for the given unit without paying vendors or ordering the CC&Rs for the HOA. If these procedures are followed, the HOA will be required to mail a copy of the NOD and NOS to the party requesting notice. Impact on a Bona Fide Purchaser for Value: If passed, section 6 of SB 306 will add NRS 116.31166(13), providing that, after the redemption period expires, any violation of NRS 116.3116 to 116.61168, will not affect the sale of the property to a BFP. While SB 306 is not the cure-all that many in the mortgage servicer industry had hoped for, a retroactive solution was never likely. While most mortgage servicers have already designed procedures to maximize the opportunity to cure a delinquent Nevada HOA lien before sale, SB 306 will provide additional security. Most importantly, in the unlikely event that a Nevada HOA sale mistakenly goes forward, the foreclosed out lienholder will have 60 days to redeem the property, taking title directly, rather than having to go through its own foreclosure. If SB 306–or something close to it–is enacted, the future of HOA foreclosures in Nevada should become clearer, and we can all get back to litigating all the past HOA sales. Nevada's rank among states in bankruptcy filings the first four months of 2015, with 3,141. Source: AACER bankruptcy data reported by Epiq Systems STAT INSIGHT 29th

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