Repeal the HSW Fine-Foreclosure Exception
- Mike Kosor
- Jun 2
- 5 min read
Updated: 5 days ago
If the problem is imminent danger, fix the danger — do not foreclose over the fine.
Nevada law recognizes an important principle: ordinary HOA fines and penalties should not generally support nonjudicial foreclosure.
That principle appears in NRS 116.31162(6). The statute provides that an association may not foreclose a lien by sale based on a fine or penalty for a violation of the governing documents unless one of two exceptions apply.
The general rule is sound. A homeowner should not face the forced sale of a home over fines.
This post argues the first of the two exceptions — health, safety, or welfare (HSW) — should be repealed. It does not fit the problem it is supposedly designed to solve.The statute’s own wording exposes the mismatch.
The argument is not that an association may never respond to a dangerous condition. It plainly may. Nor is the argument that every HSW fine is necessarily improper. In some circumstances, a fine may be authorized to pressure compliance while compliance remains possible. But that limited purpose does not justify converting the fine into a foreclosure debt. If the violation truly presents an imminent threat, the remedy should be directed at correcting the condition, not preserving a punitive debt after the fact.
Foreclosure Does Not Cure Danger
The statutory wording exposes the mismatch.
The HSW exception applies only when a violation poses an imminent threat of causing a substantial adverse effect on health, safety, or welfare.
If the threat is truly imminent, how does foreclosure solve it?
Foreclosure is not a safety remedy. It is a collection process. It requires notices, waiting periods, procedural steps, and ultimately a sale. It does not repair a hazard, remove an obstruction, clean a sanitation problem, stop a fire risk, correct a dangerous structure, or restore habitability.
A true danger calls for a cure-focused remedy. The association should seek direct correction, abatement, emergency relief, injunctive relief, court intervention, municipal or code-enforcement assistance, or another remedy aimed at fixing the dangerous condition.
If the condition is dangerous, fix the condition.
Do not let the danger remain while fines accumulate into a foreclosure debt.
Fines Are Not Abatement Costs
There is an important distinction between abatement costs and fines.
If an association lawfully spends money to cure or abate a dangerous condition, that expense may raise a separate lien or collection issue. But a fine is different.
A fine is not reimbursement for repairing the danger. It does not pay for abatement. It does not restore the property to a safe condition.
A fine may punish past conduct. It may deter future misconduct. It may pressure compliance while compliance remains possible.
But deterrence is not cure.
That distinction matters because foreclosure is an extreme remedy. It should not be triggered by an HOA-imposed fine merely because the board labels the violation health, safety, or welfare. A fine may be lawful and still be the wrong kind of debt to support nonjudicial foreclosure.
The HSW Exception Is Also Vulnerable Because HSW Remains Undefined
The health, safety, or welfare exception is especially problematic because Nevada has not clearly defined what HSW means in this context.
NRS 116.31031 directs the Commission, notably several years ago, to adopt regulations establishing criteria for determining whether a violation poses an imminent threat of causing a substantial adverse effect on health, safety, or welfare, the severity of such violations, and fine limitations. That issue is now part of the regulatory discussion. But even a definition of HSW does not solve the foreclosure problem if the statute still allows a fine or penalty to become foreclosure-eligible.
The definitional problem matters because HSW can become elastic. Without objective limits, an association may be tempted for example, to characterize ordinary covenant disputes as “welfare” concerns. A rule intended to prevent foreclosure over ordinary fines becomes less protective if the association can relabel the violation as a health, safety, or welfare matter.
Read more at post: HSW Is Not a Blank Check for HOA Fine Authority
The Statute Already Points in the Right Direction — But Stops Short
NRS 116.31162(6) already reflects a policy judgment. It recognizes that fines and penalties are different from assessments.
Assessments fund ongoing association operations. They pay for common-area maintenance, insurance, utilities, reserves, vendors, and other obligations. If owners do not pay assessments, the shortfall shifts to other owners or the association’s obligations go unmet.
Fines and penalties serve a different purpose. They punish violations, compel compliance, or enforce governing documents. They are not the same as unpaid assessments needed to fund the association’s operating budget.
That distinction is exactly why fine-based foreclosure is generally barred. But the statute stops short by allowing the HSW exception to convert some fines or penalties into foreclosure leverage. That exception is difficult to justify. If the violation is truly urgent, the law should focus on correcting the condition. If the violation is not urgent, foreclosure is disproportionate. Either way, foreclosure over the fine is not the right tool.
Nevada should complete the logic already present in the statute.
Ordinary fines should not support foreclosure. HSW fines should not support foreclosure either. Dangerous conditions should be addressed through direct cure remedies, not through a delayed home-loss remedy.
Proposed Reform
Nevada should amend NRS 116.31162(6) to remove the fine for HSW violations exception from nonjudicial foreclosure.
The revised statute should provide that an association may not foreclose a lien by sale based on a fine or penalty for a violation of the governing documents. Cost to abate- yes.
But not an associated fine.
Nevada should make clear that a health, safety, or welfare violation may support direct abatement, injunctive relief, code enforcement, or other cure-focused remedies, but it should not make a fine or penalty eligible for nonjudicial foreclosure.
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Related Reading and Rulemaking Coverage
This post focuses on one narrow reform: repealing the HSW fine-foreclosure exception in NRS 116.31162(6)(a). But the issue is part of a larger Nevada rulemaking discussion concerning HSW violations, fine severity, and proposed regulations that may affect how HOA boards classify and punish alleged violations.
For additional background, see:
This post discusses the ongoing regulatory process and pendig third Commission workshop.
This post discusses the second regulatory workshop and why the definition of HSW matters when regulators consider enhanced fine authority.
This was the first is thenow series of posts explaining why high-dollar HOA fines raise broader concerns about private enforcement power, board discretion, and homeowner protections.
Readers can also follow NVHOAReform’s ongoing coverage of the rulemaking process on the HOA Rulemaking/Regulation page, where updates, workshop materials, and related commentary are collected.
