Lisa and Jim's Northern Nevada Real Estate Blog: Common Interest Communities in Northern Nevada Today!

Common Interest Communities in Northern Nevada Today!

 

 
Northern Nevada Real Estate
Common Interest Communities Today
Lisa Wetzel and Jim Valentine
RE/MAX Realty Affiliates
 

 

Common Interest Communities Today

 

The economic meltdown of the past five years has had some unexpected, and often unseen consequences on Common Interest Communities, those with Homeowner Associations (HOA). This is a very interesting situation because the Nevada Legislature has provided for the requirement full disclosure of the financial status of a HOA to prospective Buyers. Buyers should be safe from surprises, but in some instances they may not be.

 

Some of the HOA challenges are quite visible and stem from the volume of foreclosures in those communities. Distressed property owners are usually financially challenged in all areas including the HOA dues and assessments. A high volume of arrearages can put the financial functionality of the HOA at risk. This risk was enhanced when the last Legislature limited how far back HOAs can claim late fees to six or nine months from a successful Trustee Sale Buyer depending on the situation.

 

That law is being challenged as there have been conflicting judicial decisions around the State since its implementation. The basis for the complaints center around the Super Priority Lien status of the HOAs and their need for cash flow to maintain their common areas and services. It is expected to be decided by the Nevada Supreme Court, but until it is some HOAs may find themselves financially strapped without the cash flow that was planned for.

 

Some Common Interest Communities HOAs are finding themselves in the unthinkable position of not really knowing what they own. As silly as that may seem, it is occurring as a result of the financial difficulties developers experienced, and we have seen it in different communities. It usually centers around a common area facility that was to be dedicated to the HOA, but the ownership became questionable as a result of the developer being foreclosed on, or carrying high debt that would force HOA assessments if transferred to the HOA. If you are buying in a Common Interest Community affected by this type of situation it may not be readily apparent. Be sure to read the HOA meeting minutes, ask specific questions of the HOA officers or their management company, and even your future neighbors.

 

Our Advice: What is happening is unprecedented in this day of the protected consumer. No matter how well the Common Interest Community HOA is run, or how well intended the Developer was/is, some things have just gotten away from them through no fault of their own. When you buy in a CIC you are investing in common financial operation that relies on steady cash flow supplied by every co-investor, homeowner. Significant disruption of the HOA cash flow can result in diminished services and maintenance, or higher dues and assessments, all of which impact your enjoyment of your property. If the developer didn't fulfill commitments because of financial difficulties, what is the recourse? Expensive and likely fruitless litigation, not worth the time, cost or emotional turmoil. These situations are not the norm, and our comments should not cause you to shy away from a CIC that would be an ideal place for you to live for most Homeowners Associations do a good job of serving their purpose of maintaining the quality of life they are charged with doing.

 

If a Common interest Community HOA officer tells you that they don't need to comply with NRS 116 be sure to ask many, many questions until you have confidence with the answers. What aren't they telling you? Maybe it's not an issue, but if it is and you invest you will have a hard time divesting yourself of a problem asset. Use caution so you can close escrow with confidence.

 

When it comes to choosing professionals to assist you with your real estate needs... Experience is Priceless!
 
Lisa Wetzel and Jim Valentine are real estate agents with RE/MAX Realty Affiliates in Gardnerville. They are short sale and foreclosure specialists and certified distressed property experts.

Common Interest Communities in Northern Nevada Today!

 

 

Contact them at  

carsonvalleyland@hotmail.com www.carsonvalleyland.com 

 

 
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Lisa Wetzel & Jim Valentine
 RE/MAX Realty Affiliates
1320 US Highway 395 N.
Gardnerville, Nevada 89410
775.781.5472 - Cell
775.783.6854 - Direct
775.552.8585 - Fax
 
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Comment balloon 0 commentsLisa Wetzel • December 14 2012 05:37PM

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