If state legislators are serious about protecting the rights of owners and residents in HOA-governed communities, here’s what they should do to rein in HOA disputes. First, understand that conflicts between homeowners and HOAs escalate when the HOA board abuses its power. And no abuse is more disproportionate — or more dangerous — than the power to foreclose on a homeowner’s property.
The Problem
When a small subset of owners refuse to live up to their communal obligations, liens become a logical next step. Communities depend on regular assessments to maintain common property, insure against risks, and build reserves for the future. A recorded lien ensures those debts remain tied to the property and will eventually be satisfied.
The problem arises when liens are paired with foreclosure. It is the equivalent of launching a missile to deal with a mouse — a drastic, destructive remedy wildly out of proportion to the obligation at issue. Legal fees and penalties quickly eclipse the original $70/mo. assessments, and when the owner does not pay after some nominal period, the board takes the home itself.
Foreclosure in this context is not about recovering fair value. Homes foreclosed are often sold at steep discounts, with proceeds swallowed by legal fees, while owners lose hundreds of thousands of dollars in equity. Then the foreclosure chills owners from challenging selective enforcement, abusive fines, or improper charges, because the risk of losing their home is catastrophic.
Government Power Without Government Controls
Critics of this reform will argue that HOAs need the same enforcement powers as governments in order to function. At the same time, they insist HOAs are merely private, contractual entities. In effect, they want it both ways: government-level powers without government-level accountability.
Foreclosure is a clear a governmental power — take a person’s home and erase their equity. That power has been handed to HOA boards, but without the safeguards that keep governments from firing missiles at mice.
Conflicts of Interest. Government officials are constrained by ethics laws, procurement rules, and independent enforcement bodies. In Nevada, for example, conflict questions can be reviewed by the Nevada Commission on Ethics, and procurement is overseen by professional career staff and legal counsel. HOA boards, by contrast, rely on part-time volunteers with no independent staff. Managers and attorneys profit and often dominate decision-making. This is the essence of HOA board capture. [1]
Independent Review. Taxpayers in Nevada can contest property taxes before the County Board of Equalization, and further appeal to the State Board of Equalization or the Nevada Tax Commission. No tax foreclosure proceeds until those appeals are resolved. HOA owners disputing charges, by contrast, must appeal back to the very boards that imposed them. Nevada’s ADR requirement under NRS 38.310 offers no independent tribunal and does not halt foreclosure.
Transparency. Local governments must publish budgets, hold public hearings, and comply with open-records laws. Their spending is tracked by independent auditors. HOA budgets may be circulated, but they are adopted in corporate fashion, with limited owner oversight. Without real transparency, owners cannot hold boards accountable before their homes are at risk.
When you strip away the rhetoric, the problem is clear: HOAs are allowed to use the most extraordinary public power—foreclosure—while operating with only the thinnest private controls. Nevada lawmakers must either build government-level safeguards into HOA governance or end foreclosure authority altogether.
A Better Way: Liens Without Foreclosure
Ending foreclosure does not mean HOAs cannot collect what they are owed. Like other creditors, associations could still record liens against properties. Those liens would “run with the land,” ensuring that debts must be satisfied at the time of sale or refinancing, just as mechanic’s liens operate for contractors.
This approach strikes a balance:
HOAs retain security — debts are not erased, and payment is assured before transfer of title.
Homeowners retain security of their homes — no family loses a roof over their heads because of a disputed bill.
Proportionality is restored — collection power matches the nature of the obligation.
And for minor legal disputes — the kinds of everyday conflicts that now explode into costly litigation — homeowners and HOA boards should be required to use small claims court or other ADR programs. These forums are designed for quick, inexpensive resolution of low-dollar conflicts, without the nuclear option of foreclosure or the crushing burden of attorney’s fees. Read more Dispute resolution (ADR) reform must be a Legislature’s priority.
The Path Forward
Nevada lawmakers should amend NRS 116 to eliminate the HOA’s authority to foreclose liens. Associations would still:
Record liens to secure debts;
Pursue civil remedies, including judgments and wage garnishments, if quicker payment is needed;
Collect in full at the time of sale or refinance; and
Be required to resolve minor disputes through small claims court or other ADR programs.
Conclusion
The power to foreclose is a blunt and dangerous instrument, out of step with both fairness and necessity. Homeowners should not live in fear of losing their homes to private corporations over small debts or contested fees. Ending HOA foreclosure liens does not let anyone off the hook — it simply ensures that the remedy fits the obligation.
Nevada led in adopting a modern HOA framework nearly twenty years ago. It is time to lead again — this time by finishing the job and ending foreclosure authority once and for all.
Frequently Asked Questions
Can an HOA foreclose on my home in Nevada?
Yes. Under current Nevada law (NRS 116), HOAs can record liens for unpaid assessments and, if the debt is not resolved, they may foreclose on the property. Even small disputes over fees can escalate into foreclosure, threatening a homeowner’s equity.
What is a super-priority lien in Nevada HOA law?
Nevada law gives HOA liens “super-priority” status for a portion of unpaid assessments, meaning they take precedence over even a first mortgage in foreclosure. This makes HOA foreclosure especially powerful — and controversial — compared to other creditor liens.
How can Nevada homeowners protect themselves from HOA foreclosure?
The safest way is to stay current on assessments and dispute charges quickly. Advocates argue that lawmakers should end foreclosure authority and limit HOAs to liens, civil judgments, or wage garnishments — remedies that secure payment without risking a homeowner’s entire property.
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Appendix: Opposition & Responses
Opposition 1: HOA foreclosure is essential to community finance.
Response: Agree. But other creditors collect debts without seizing homes. Assessments are modest compared to home equity, and foreclosure is a wildly disproportionate remedy. Communities will see more compliance — not less — if enforcement is fair and measured.
Opposition 2: HOAs need parity with other lienholders (taxes, mortgages).
Response: Property taxes and mortgages are assumed voluntarily and subject to constitutional limits. HOA assessments are imposed by private corporations without democratic safeguards. Equating the two creates government-level powers without government-level accountability.
Opposition 3: Foreclosure is rare and only a last resort.
Response: The threat itself chills owners from challenging abuse. Even “rare” foreclosures destroy equity, while often recovering little for the association after fees and discounts.
Opposition 4: Without foreclosure, paying owners must subsidize delinquents.
Response: Civil judgments, liens, and wage garnishment are proportionate tools that place the burden on delinquent owners. Foreclosures often drain community funds through litigation, harming everyone.
Opposition 5: Nevada already has safeguards (notice, redemption rights, payment plans).
Response: Safeguards have not prevented abuse in practice. Redemption rights are meaningless for owners without resources. Tweaking safeguards misses the structural flaw: foreclosure gives private boards powers that belong only to government.
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[1] Conflict-of-interest rules show the gap. In Nevada government, officials are bound by NRS Chapter 281A: they must disclose, abstain, and can be investigated and sanctioned by the Nevada Commission on Ethics. Oversight is independent, and violations are concrete (e.g., voting on a contract where you have a financial stake). HOA directors, by contrast, are governed by NRS 116.31084, which imports nonprofit standards. Disclosure is usually enough to protect the transaction, and declarant-affiliated directors are expressly exempt from disclosure and abstention altogether. There is no outside referee — no ethics commission or independent agency — to police HOA conflicts. The result is foreclosure power exercised in a self-policed environment where structural conflicts are common and enforcement is absent.
