Repeal the HSW Fine-Foreclosure Exception
- Mike Kosor
- 3 days ago
- 6 min read
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This post argues the first of the two exceptions — health, safety, or welfare (HSW) — should be repealed.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.
NRS 116.31162(6)(a) does not merely refer to health, safety, or welfare. It applies only when the violation poses an imminent threat of causing a substantial adverse effect on health, safety, or welfare.
That should narrow the exception. But it also raises the central question: if the threat is truly imminent, how does foreclosure solve it?
Foreclosure is not immediate. It is a collection process. It requires notices, time periods, procedural steps, and ultimately a sale. It does not remove the hazard, repair the condition, unblock access, clean the sanitation problem, stop the fire risk, or restore habitability.
A true danger to health, safety, or welfare requires a cure-focused remedy. The association should seek direct abatement, emergency relief, injunctive relief, court intervention, municipal or code-enforcement assistance, or another remedy aimed at correcting the dangerous condition. If the association lawfully incurs costs to cure or abate the condition, those costs may raise separate lien or collection questions. But the fine itself should not become a basis for nonjudicial foreclosure.
If the condition is dangerous, fix the condition. If money is owed, collect it through proportionate remedies. But a fine is not the same thing as reimbursement for abatement costs.
If an association lawfully spends money to cure or abate a dangerous condition, that cost may raise a separate lien or collection issue. But the fine itself is different. A fine punishes or pressures compliance. It does not repair the hazard, remove the obstruction, clean the sanitation problem, or restore habitability.
Foreclosure is intended to be a last-resort collection remedy. It is not a safety remedy. Nevada should not allow a fine imposed by an HOA board it lables an HSW violation to become the basis for 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.
The answer is not merely to define HSW more carefully. That may be necessary for fine severity and enforcement standards. But for foreclosure, the better answer is simpler:
Nevada should not allow nonjudicial foreclosure based on fines or penalties at all.
Undefined HSW Can Be Weaponized
The concern is not only that HSW is undefined. The concern is that an undefined standard can be weaponized.
Most boards will not try to misuse the HSW exception. But foreclosure law should not be designed only for well-functioning boards. It must also protect owners from the small subset of cases where a board is angry, retaliatory, poorly advised, overly aggressive, or willing to stretch the law to gain leverage over a homeowner.
That risk is real because HSW can sound broader than it should be. Without objective limits, “welfare” can be used to describe almost any claimed community concern: aesthetics, property values, neighbor discomfort, criticism of the board, personality conflict, persistent complaints, or an owner who is simply viewed as difficult.
That is dangerous.
A homeowner’s speech, tone, criticism, records requests, campaign activity, or sharp disagreement with the board should not be transformed into a health, safety, or welfare issue merely because someone says they felt threatened, uncomfortable, or harmed. A knife is a safety issue. A sharp tongue is not.
There is also a broader institutional problem. Many genuine health, safety, or welfare concerns already have direct public or civil enforcement paths. Fire hazards, blocked emergency access, sanitation conditions, structural dangers, hazardous materials, threats of violence, nuisance conditions, and code violations may implicate municipal code enforcement, fire authorities, law enforcement, civil injunctions, abatement, or court orders. Those systems are designed to address actual danger.
That raises the question: why should a volunteer HOA board be encouraged to duplicate that role by turning HSW into an internal enforcement label, especially when the label can support extraordinary fines or even foreclosure leverage?
HOA boards may have a role in identifying and responding to dangerous conditions within the community. But that role should be cure-focused and tied to objective conditions. It should not become a substitute police power, and it should not convert subjective discomfort, owner speech, or ordinary governance conflict into a foreclosure-eligible fine.
If HSW remains part of fine enforcement, it must be defined narrowly and objectively. It should be limited to actual, observable danger: physical injury risk, fire risk, structural danger, blocked emergency access, sanitation hazard, loss of habitability, hazardous-material exposure, or comparable conditions. It should not include ordinary covenant violations, interpersonal disputes, criticism of the board, or subjective claims of discomfort.
But even with a narrow definition, HSW should not make a fine foreclosure-eligible. The risk of weaponization is too great, and the remedy is still mismatched. A dangerous condition should trigger direct cure remedies. It should not give an abusive or overreaching board a path to threaten the forced sale of a home over a fine.
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 why the definition of HSW matters when regulators consider enhanced fine authority.
This post explains 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.
