Nevada HOA Super-Priority Lien: NRS 116.3116 Explained
Quick answer: In Nevada, NRS 116.3116 gives your association a lien on a unit for unpaid assessments, construction penalties and fines from the day they come due, and recording the declaration perfects it. That lien normally sits behind a first mortgage recorded before the owner fell behind, except for the super-priority piece: up to nine months of regular budget-based assessments before the notice of default is recorded, plus certain maintenance and nuisance-abatement charges, plus collection costs capped by statute. If the first lender does not pay that piece before the sale, an association foreclosure sale can wipe out the first mortgage. The association has to follow the pre-collection notices and foreclosure steps in NRS 116.31162 first.
This post walks through what the lien covers, how the super-priority amount is calculated, the cost caps, and the collection calendar a Nevada board should follow. We paraphrase the statute below with section cites. Confirm every amount and deadline with the current statute and your attorney before you act.
What the association's lien covers
Under NRS 116.3116(1), the association has a lien on a unit for:
- any assessment levied against the unit
- any fines imposed against the owner
- any construction penalty imposed under NRS 116.310305
Unless the declaration says otherwise, late charges, interest, fees and other charges allowed by NRS 116.3102 and collection costs charged under NRS 116.310313 are enforceable as assessments. If an assessment is payable in installments, the full amount becomes a lien when the first installment comes due.
Recording the declaration is record notice and perfection of the lien. No separate claim of lien has to be recorded (NRS 116.3116(9)).
Where the lien ranks
NRS 116.3116(2) puts the association's lien ahead of all other liens and encumbrances on the unit except:
| Ahead of the association's lien | Cite |
|---|---|
| Liens recorded before the declaration was recorded | 116.3116(2)(a) |
| A first security interest recorded before the assessment became delinquent (but see the super-priority piece below) | 116.3116(2)(b) |
| Real estate taxes and other government assessments | 116.3116(2)(c) |
| Fees or charges levied under NRS 444.520(1) | 116.3116(2)(d) |
Mechanics' and materialmen's liens keep their own priority (116.3116(4)). If two associations both have assessment liens on the same property, they share equal priority unless the declaration says otherwise (116.3116(8)).
The super-priority amount under NRS 116.3116(3)
The super-priority portion is the part of the lien that jumps ahead of the first mortgage. Under NRS 116.3116(3) it is limited to three pieces:
- Charges under NRS 116.310312, which covers costs the association incurs maintaining or securing a unit, abating a nuisance, or stopping a water or sewage leak after the lender has started foreclosure, following notice and a hearing.
- Up to nine months of regular assessments, measured as common-expense assessments under the budget adopted under NRS 116.3115 that would have come due, without acceleration, in the nine months before the notice of default and election to sell is recorded.
- Enforcement costs, capped as shown in the next table.
There is one exception. If Fannie Mae or Freddie Mac regulations require a shorter priority period, the period follows those regulations, but it can never be shorter than the six months before the notice of default is recorded or a court action is filed. Confirm the current federal position with your attorney.
Special assessments, fines, late fees, interest and attorney's fees are not part of the super-priority amount. They stay in the general lien, behind the first mortgage.
Collection costs that can be included in the super-priority amount
NRS 116.3116(5) caps the enforcement costs that can be placed ahead of the first mortgage. They cannot exceed the association's actual costs, can include only one trustee's sale guaranty, and cannot exceed:
| Step | Cap |
|---|---|
| Demand or intent-to-lien letter | $165 |
| Notice of delinquent assessment | $325 |
| Intent to record a notice of default letter | $90 |
| Notice of default | $400 |
| Trustee's sale guaranty | $400 |
No other collection costs and no attorney's fees may be included in the super-priority amount. Separately, NRS 116.310313 lets an association charge an owner reasonable collection fees, in amounts set by Commission regulations. Check the current regulation before you publish a fee schedule.
Before you send anything: the 60-day and 30-day rule
NRS 116.31162(4) blocks any collection step, including the intent letter and the notice of delinquent assessment, until the association has done all of the following:
- complied with the servicemember notice requirements in NRS 116.311625(4)-(5) and the shutdown-worker notice requirements in NRS 116.311627(4)-(5);
- no earlier than 60 days after the obligation became past due, mailed (or, if authorized, emailed) the owner a schedule of the fees that may be charged, a proposed repayment plan, and a notice of the right to contest the debt at a board hearing;
- waited 30 days without payment in full, a repayment plan or a hearing request.
If the owner requests a hearing or signs a repayment plan within the 30 days and then loses the hearing or misses a plan payment by more than 10 days, the association can proceed.
Before recording a notice of default, the association and its manager do not need a collection agency license, and they do not have to hire a licensed collection agency (NRS 116.3116(6)).
Foreclosure steps under NRS 116.31162
| Step | What the statute requires |
|---|---|
| 1. Notice of delinquent assessment | Certified or registered mail, return receipt requested, to the owner's known address and the unit (or email if authorized), stating the amount due, the unit and the record owner (116.31162(1)(a)) |
| 2. Notice of default and election to sell | Recorded at least 30 days after step 1; must break out the super-priority amount into its budget-assessment, 116.310312 and collection-cost pieces, and carry the bold you-could-lose-your-home warning (116.31162(1)(b)) |
| 3. 90-day cure period | The owner has not paid for 90 days, counted from the later of recording or mailing the notice of default (116.31162(1)(c), (3)) |
| 4. Notices to lenders | Copies of the notice of default and notice of sale mailed to each holder of a security interest (116.31162(5); 116.31163; 116.311635) |
| 5. Affidavit | Recorded affidavit naming each security-interest holder notified and the address used (116.31162(1)(e)) |
| 6. Sale | Conducted under NRS 116.31164 |
If the first lender pays the super-priority amount at least five days before the sale and records proof of satisfaction at least two days before, the sale can still go forward but does not extinguish the first mortgage (116.31162(1)(b)(3)).
Limits boards often miss
- Fines alone can't drive a foreclosure. The association may not foreclose based on a fine or penalty for a rules violation unless the violation poses an imminent threat to health, safety or welfare, or the penalty is for missing a construction schedule (116.31162(6)).
- Foreclosure mediation pauses the sale. If the association has notice that the unit is in foreclosure mediation under NRS 107.086, it generally cannot sell until the mediation certificate is recorded, unless the owner stops paying assessments that come due during mediation (116.31162(7)).
- Three-year deadline. The lien is extinguished unless the notice of default is recorded, or a lawsuit is filed, within three years after the full amount of the assessments becomes due (116.3116(10)).
- Payoff statements. On written request, the association must give the owner a statement of unpaid assessments within 10 business days. It must be in recordable form when the lien can be foreclosed, and it binds the association (116.3116(13)).
- Rent receivers. In a collection or foreclosure action, the court may appoint a receiver to collect rent from a leased unit and pay the association its budget-based assessments during the case (116.3116(15)).
- Fees to the winner. A judgment in an action under this section must include costs and reasonable attorney's fees for the prevailing party (116.3116(12)).
A Nevada collections calendar
| Day | Action |
|---|---|
| Due date | Assessment posts to the owner's ledger |
| Per your policy | Late notice and late charge under the governing documents |
| Day 60 or later | Send the fee schedule, proposed repayment plan and hearing notice; send servicemember and shutdown-worker notices |
| 30 days after that | If unpaid, no plan and no hearing request, the intent letter and notice of delinquent assessment may go out |
| 30+ days after the notice of delinquent assessment | Record the notice of default with the super-priority breakdown |
| 90 days after recording or mailing, whichever is later | Earliest point the cure period ends |
| Within 3 years of the full amount coming due | Last day to record the notice of default or sue |
What this means for your budget and books
The super-priority amount is tied to the budget adopted under NRS 116.3115, so your adopted budget and a clean per-unit ledger are what prove the number on the notice of default. Keep late fees, interest and fines in separate ledger categories so you can show the lender exactly which dollars are super-priority. Nevada also requires fines to sit in a separate compliance account (NRS 116.310315).
Related reading: Nevada reserve study requirements under NRS 116.31152, the HOA master budget, how much cash to keep in operating, and how other states handle delinquencies in California Civil Code 5650. Collection decisions are made at board meetings, so review NRS 116.31083 board meeting rules, and run the ledgers on HOA Fiscal.
Dynamite Management keeps Nevada association ledgers, sends the statutory notices on schedule and documents the super-priority breakdown, so your attorney or collection trustee starts with clean numbers. Talk to us about financial management.
This is not legal advice. Confirm the details with NRS chapter 116 and your attorney.
Frequently asked questions
What is the HOA super-priority lien in Nevada?
It is the part of the association's lien that ranks ahead of a first mortgage: up to nine months of regular budget-based assessments before the notice of default, certain NRS 116.310312 maintenance charges, and capped collection costs (NRS 116.3116(3)).
Can a Nevada HOA foreclose and wipe out the mortgage?
If the first lender does not satisfy the super-priority amount, the notice of default must warn that the sale may extinguish the first security interest. If the lender pays it at least five days before the sale and records proof at least two days before, the mortgage survives.
Are attorney's fees part of the super-priority lien?
No. NRS 116.3116(5) bars attorney's fees and any collection costs beyond the listed caps from the super-priority amount.
How long does a Nevada HOA have to enforce its lien?
The notice of default must be recorded, or a lawsuit filed, within three years after the full amount of the assessments becomes due, or the lien is extinguished.
Can a Nevada HOA foreclose for unpaid fines?
Generally no. Under NRS 116.31162(6) a foreclosure sale based on a fine is allowed only for an imminent threat to health, safety or welfare, or a construction-schedule penalty.
Related Articles
Nevada HOA Reserve Study Requirements: NRS 116.31152 Explained
Nevada boards must commission a reserve study every 5 years, review it annually, file a summary with the state within 45 days and fund adequate reserves. Here is what NRS 116.31152 and its companion sections require.