HOA-foreclosed home in Las Vegas not a good idea

Q: Do you think it would be a good idea for someone to purchase a property that has been taken over by a homeowners association? I would like to purchase one if possible, I am a first-time homebuyer. Do you know where I could look to find HOAs that have foreclosed on a home.

A: No matter what home you purchase, be a newly constructed one, a traditional resale home or a foreclosed home, it is vitally important that you, as buyer, exercise your due diligence. What does this due diligence consist of with a foreclosed property owned by an association? Does the association have a clean title? Why is this important? Because you do not want to find yourself in a costly District Court case whereby the under lying lenders or those with security interests in the home are claiming they were never properly notified and that the association's foreclosure action was improper and that the foreclose deed is basically null and void.

On a scale from 1 to 10, iI give it at 10 that any foreclosed home owned by the association does not have a clean title. If you are looking for a discounted purchase price as a result of a foreclosure, then i suggest you find a home that has been foreclosed upon by the lender.

You will still have to avoid the mine fields, especially if the home has been vacant for some time. It is critical that you pay for the best, detailed inspection from a third party before you close on escrow. There are various levels of inspection and paying for the least expensive, in the long run, can come back to bite you. I have been involved as an expert witness on many cases where the purchaser did not exercise his or her rights in obtaining the best information concerning the physical integrity of the home and later on found mold throughout the home that had not been disclosed by the seller and was not visually seen as the mold was inside the walls.

Q: I live in Las Vegas and am considering filing a small claims action against my HOA and wondering if its in the realm of possibility? I had filed a request for reimbursement with the association. That was rejected but the rationale used to deny it has an "aroma" to it. If successful or not, would like to make the effort.

A: It depends upon the kind of reimbursement. For example, the association caused some kind of physical damage to your home or to your property; that is a claim that could be filed in small claims. If you are filing a claim against the association for it to reimburse you for the fines or late fees that you paid in order to avoid any foreclosure action, you would not be able to file a claim with the courts. For this kind of action, the law requires you to exhaust all administrative alternative before filing an action. You would have to contact the Nevada Ombudsman Office to see what options would be best for your situation.

The difference is when the reimbursement of money is specifically related to the governing documents or to Nevada Revised Statutes 116 laws and regulations. You must file the complaint with the Nevada Real Estate Division through the Ombudsman Office first before any action can be taken in a court of law.

Barbara Holland, certified property manager, broker and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to the Association Q&A, P.O. Box 80360, Las Vegas, NV 89180. Fax is 702-385-3759, email is support@hlrealty.com.