From: Barbara Holland [mailto:bholland@hlrealty.com]
Sent: Wednesday, March 18, 2015 6:23 AM
To: Assembly Judiciary Exhibits
Subject: FW: Opposition Statement to A.B. 240- please use this revision
Please use this revised opposition. thanks
Barbara Holland, CPM
President
H & L Realty and Management Co.
2560 S Montessouri St, Suite 206
Las Vegas, NV 89117
Mailing Address:
P.O. Box 80360, Las Vegas, 89180
P: 702-385-5611
F: 702-385-3759
bholland@hlrealty.com
Please visit us on Facebook, Twitter, and H & L Realty.
To Honorable Assemblywoman Seaman, Chair of the Committee on Judiciary
Subcommittee
1. The financial impact upon homeowner associations and homeowners who
pays their monthly assessments is catastrophic.
2. Associations do not have the financial resources either in time or money to
file judicial foreclosure actions against delinquent homeowners in District
Court.
3. Do the sponsors of this bill realize that if an association were to file a
judicial foreclosure action in District Court that not only would the
delinquent homeowner have to be named but also the lenders, and anyone
else with security interest in that home ? Do you really think that the
average association has enough money to fight that battle?
4. Assuming that neither the homeowner nor the lenders filed an opposition
to the association’s judicial foreclosure, according to attorneys that we
contacted, the association would spend from $5000 to $ 6000 in attorney
fees and another $2000 to $ 3000 in the various court costs and certificate.
5. Let’s do the math. Suppose an association of 100 members paying $ 50 a
month had 5 cases to file in District Court. And let’s assume that it would
only cost $3500 per case- the 5 cases would total $ 17,500 for the initial
filing in District Court. This is a new operating expense as the collection
companies and attorneys involved in collections currently advance the
foreclosure expenses. With this new law, no collection company is going
to advance these funds. They will have to come from the pocketbooks of
Assembly Committee: Judiciary
Exhibit: F Page: 1 of 3 Date: 03/19/15
Submitted by: Barbara Holland
the average tax paying homeowner. The $ 50 a month assessment will
now be increased to $ 64.58 or an increase by 29.16% in assessments ($
17,500 divided by 100 homeowners divided by 12 months).
6. Now let’s assume that cost would be closer to the estimate given to us by
the attorneys of $ 7,000 per case (again assuming that neither the
delinquent homeowner nor the lenders opposed the action)…5 cases
would now cost $ 35,000. That same 100 member association would see
their assessments increase from $ 50 to $ 79.17 or an increase of 58.33%
in assessment ($ 35,000 divided by 100 homeowners divided by 12).
7. Now there are 3- catch “22s”…first, the association is already losing
income because the 5 homeowners are not paying their assessments.
Second, just how quickly do you think that foreclosure case will be heard
in District Court, one year, two years or more? A delinquent homeowner
could be sitting in the comfort of his home for years before the case would
be heard and decided. Who picks up the tab for the association’s
operating expenses? I would not be surprised if it were you members of
the Assembly Judiciary Committee who also live in homeowner
associations that would feel the brunt of the financial impact of this bill if
passed. (not quite sure whether your neighbor would still be friendly with
you). Third, would the increases in assessments cause other homeowners
who are just barely making it become delinquent…and so a vicious loop
would be created.
8. What happens if this law pushes the weaker associations to the brink,
associations which could no longer afford to maintain the streets, pay
water, sewer fees, property taxes, associations that would have to file
bankruptcy? Will the State of Nevada pick up the tab?
9. How about a little twist with this foreclosure scenario. Your association
can only afford to take the 5 cases to judicial foreclosure out a total 11
homes that could have been sent to District Court if the association had the
funds and staying powers. Your home is one of the 5 selected- you file a
claim with the Court that you have been discriminated because the other 6
homes were not sent to District Court. A situation that could easily
happen.
10. Do you really think that an already over- loaded District Court system
wants these foreclosure cases to clog up the courts’ calendars? What will
be the financial impact upon the Courts? The County governments that
support the Courts?
11. Judicial foreclosures include a one (1) year right of redemption. Thus,
individuals acquiring title at judicial foreclosure sales are less likely to
improve the property during the one (1) year right of redemption. They
also tend not to pay assessments because they have no certainty that they
will own the property at the end of the year.
12. This proposed law rewards the bad-faith behavior of the banks- Just read
some of the District Court cases where banks were chastised because the
banks had opportunities that they did not take in order to protect their
investment.
F-2
13. In 2013, the Nevada legislature passed a bill that would allow banks to
impound assessments in the similar way that the banks impound property
taxes and insurance. Assembly members, ask the lenders who support this
AB 240 bill, which one of their banks started impounding assessments? I
believe you will find none.
14. SB 260 would require banks as of January 1, 2016 to impound
assessments. This is a more equitable way to protect the banks’
underlying loans.
15. Let’s drop the other bomb…the 9 month lien vanishes from Nevada
law…Do you sincerely think that the associations can absorb this financial
hit too? Do you really think that homeowners who live next to vacant
abandoned homes are happy people, especially the ones who keep asking
why have the banks not taken action? Banks who have not taken action
for years. Why don’t you all take the time and contact the major
community management companies and go for a tour of the associations
and see first- hand.
16. Go to section 4 of this AB 204 bill- it states association may not record a
notice of a lien unless the assessments are more than 90 days past dueGUESS WHAT…CHECK FHA AND VA FINANCING REGULATIONS,
HOMEOWNERS WOULD NOT BE ABLE TO PROCURE ANY FEDERAL
GOVERNMENTAL LOANS OR REFI LOANS IF AN HOA CANNOT TAKE ANY
ACTION UNTIL AFTER 90 DAYS…You just impacted homeowners’ ability to
buy or to refi under these programs…check it out.
17. This bill includes the “oath” that someone has to make as to the validity of the
foreclosure- this was the same kind of oath that the legislature passed onto the
banks and then removed that requirement from the banks- so now you want to
include a bad law that you removed from the banks and make it “good law” for
associations.
This is such a bad bill. Your Assembly Judicial Sub-committee needs to stand up to the
paid lobbyist and let this bill die in committee. It’s time to think about your constituents
and protect them from a law that would significantly raise their monthly assessments.
F-3