Nevada HOA collection costs and the fee limits

Revised Statutes 116.310313 lets an association charge a delinquent owner reasonable fees to cover the costs of collecting a past-due obligation, and it directs the state Commission to set the permitted amounts by regulation. "Costs of collecting" is defined broadly: collection, filing and recording fees, lien preparation and release, title and bankruptcy searches, referral fees, postage, and any other charge for collecting the debt. It does not include the costs of a lawsuit or anything a court awards.

The regulation, NAC 116.470, makes the limit concrete. The fees that an association, or anyone collecting on its behalf, may charge in connection with a notice of delinquent assessment cannot exceed $2,925 in total, and each step has its own ceiling on a published schedule. On top of that total, the association may pass through costs charged by unrelated outside parties, such as recording and title costs, but only at actual cost with no markup. It may also recover management company fees of up to $325 and reasonable attorney's fees for legal work outside the schedule.

Collection costs charged under the statute are enforceable as assessments under Revised Statutes 116.3116, so they become part of the association's lien on the unit.

Collection costs matter most when there is a delinquent balance on the property you are buying, because that balance, plus fees, has to be cleared at closing. Knowing the fees are capped tells you the number cannot run away, and a collection charge that looks far above the schedule is worth questioning before you close.

The payoff request itself buys time. For a one-time period of 15 business days after the owner or their agent asks for a payoff amount, no new collection fee may be charged, except the escrow payoff demand fee (capped at $240) and fees for steps the statute requires within that window.

Read these together before you make an offer:

• Any delinquent balance and the collection fees added to it on the property you are buying.
• Whether the collection charges fit within the NAC 116.470 schedule and the $2,925 total.
• The collection policy for how the association handles delinquency and outside collectors.
• The association's delinquency rate, which signals how often collections come up.

A delinquent HOA account ties into both the payoff at closing and, in Nevada, the superpriority lien, so capped collection fees are a real protection for the buyer who inherits the balance.

An HOA Notes brief reads the resale package, the collection policy, and the financial statements together, flags collection charges that look out of line, and cites the page behind every finding.

Nevada Revised Statutes section 116.310313 (Collection cost limits). An association may charge a unit owner only reasonable fees to cover the costs of collecting a past due obligation, in amounts set by Commission regulation, whether it collects itself or through an officer, employee, community manager, collection agency or anyone else acting for it. Under NAC 116.470 the fees charged in connection with a notice of delinquent assessment may not exceed the per-step schedule or a total of $2,925; costs charged by unrelated third parties pass through at actual cost without markup; and for a one-time period of 15 business days after the owner or agent requests a payoff amount, no collection fee may be charged except the escrow payoff demand fee (up to $240) and fees for actions required by statute in that period. The association may recover, on top of the $2,925 total, actual third-party costs such as title, recording, posting and mailing costs, management company fees of up to $325, and reasonable attorney's fees for legal services outside the NAC 116.470 schedule. Collection costs charged under 116.310313 are enforceable as assessments under NRS 116.3116(1). Costs of a lawsuit to enforce the obligation and court-awarded costs are outside the statute's definition of costs of collecting.

When you read the disclosure packet, watch for collection fees above the NAC 116.470 per-step schedule or the $2,925 total, third-party collection costs passed through with a markup, and collection fees charged within 15 business days after a payoff request. HOA Notes flags each of these against the statute and tells you which restrictions are actually enforceable.