Nevada Supreme Court Departs From Ninth Circuit Ruling And Finds HOA Lien Statute Does Not Implicate Due Process

On Jan. 26, 2017, the Nevada Supreme Court issued a 5-0-2 decision in Saticoy Bay LLC Series 350 Durango 104 v. Wells Fargo Home Mortgage, 133 Nev. Adv. Op. 5, holding that Nevada’s HOA “super priority” lien statute, NRS § 113.3116, et seq., (1) does not violate the due process requirements of the United States and Nevada constitutions and (2) does not constitute a governmental taking based on the extinguishment of a first priority deed of trust.  In Saticoy Bay, Roy and Shirley Senholtz had obtained a loan from Wells Fargo totaling $81,370 to refinance their existing mortgage. The loan was secured by a first priority deed of trust. The Senholtzes subsequently defaulted on both their mortgage and their HOA dues. Thereafter, the HOA conducted a nonjudicial foreclosure sale and sold the property to Saticoy Bay for $6,900. Simultaneously, Wells Fargo filed a notice of default and election to sell. Saticoy Bay brought an action to enjoin that foreclosure sale based on NRS § 113.3116 et seq. Wells Fargo successfully obtained an order dismissing the action based on the argument that the statute violated Wells Fargo’s due process rights.     Read the article…………