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Keeping Current—Property

Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.

CASES

CONDOMINIUMS: Condominium association’s selective adoption of statutory lien enforcement provisions does not create super-priority lien. Gibson Road owned a unit in a commercial condominium, which was governed by a property owner’s association (POA). After Gibson Road became delinquent in its POA assessments, the POA initiated non-judicial foreclosure proceedings, resulting in the sale of Gibson Road’s unit to Vega United for $30,000. Four years later Celtic Bank, the holder of a prior deed of trust securing a loan of $748,000, filed a judicial foreclosure action. Vegas United counterclaimed, claiming that the POA’s nonjudicial foreclosure of its lien for assessments extinguished Celtic Bank’s deed of trust because the POA’s lien was entitle to superpriority under Nevada statutes. The trial court entered judgment for Celtic Bank. It ruled that the POA’s covenants, conditions, and restrictions (CC&Rs) selectively incorporated statutory procedures for enforcing delinquent assessments. Nev. Rev. Stat. § 116.3116(2) gives priority to POA liens except as to prior recorded first security interests, and Nev. Rev. Stat. § 116.1104 allows POAs to invalidate mortgage savings clauses contained in CC&Rs. But the POA had not adopted the latter provision. The supreme court affirmed, first explaining that nonresidential common-interest communities can incorporate provisions of the act in whole or in part. For the POA to acquire superpriority status over the bank, however, it had to incorporate the specific provision of the chapter, Nev. Rev. Stat. § 116.1104, that made mortgage savings clauses unenforceable. As things stood, Vegas United acquired the property subject to the bank’s mortgage. Vegas United Inv. Series 105, Inc. v. Celtic Bank Corp., 453 P.3d 1229 (Nev. 2019).

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