Homeowner files class-action suit over HOA debt-collection practices

Another class-action lawsuit was filed Monday over Nevada homeowner association debt-collection practices.

The latest target is Alessi & Koenig LLC, which says it is a law firm with offices in Las Vegas, Reno and in California.

An attorney for the Estates at Seven Hills homeowner Stacy Calvert filed suit in U.S. District Court alleging violations of the federal Fair Debt Collection Practices Act.

The suit, seeking class-action status on behalf of similarly-situated homeowners, says Alessi & Koenig sent Calvert a "pre-notice of default" letter in December seeking payment of $3,870 in delinquent HOA assessments and threatening to foreclose on her home.

The suit says this letter violated the federal law by failing to disclose to Calvert it was a letter to collect a debt and that any information obtained would be used for that purpose.

The suit also alleges "consumer fraud" based on Nevada’s Deceptive Trade Practices Act. This is based on assertions Alessi & Koenig is not licensed or registered as a debt collector with the Nevada Division of Financial Institutions.

The suit seeks unspecified damages.

A message for comment was left with an attorney who represents Alessi & Koenig in other litigation.

Monday’s suit is just the latest in a flurry of litigation that has erupted in Nevada during the past few years as the recession boosted both foreclosures and HOA assessment delinquencies.

Besides being sued by homeowners, HOAs and their collection agencies have been sued by investors in foreclosed homes and a Bank of America subsidiary.

Those suits challenge what the investors and Bank of America call inflated and unauthorized fees and liens filed against foreclosed homes – liens that have to be cleared before new owners take title.

The homeowner associations and collection agencies say they’re in compliance with the law and that it’s important past-due assessments be collected so HOA budgets can be balanced.

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  1. I was in a constant battle with my HOA during the first 12 years my wife and I lived in Las Vegas. The particulars don't matter because they're the same as about ninety percent of complaints I've heard about HOAs and their property management companies. I thought it might be a good idea to become a member of the association board of directors; and thus effect change from inside rather than standing outside and figuratively throwing rocks.I was elected to the board and served about a year before the president, my next door neighbor resigned in a huff. I was then elected president and served an additional two years.

    My observations are that board members are for the most part retired people who have nothing better to do than cause grief for their neighbors and stir up strife within the community. I asked our property manager to provide the board with a reserve study to ascertain whether we had adequate reserves to cover scheduled repairs and emergencies. I also wished to review the insurance coverage for both the association property and liability and the directors' and officers' liability policy. None of the other board members thought that the reserve study and a review of our insurance coverage was necessary. As a matter of fact most of them had never encountered a reserve study or knew what it was. So here we had a group of people purporting to have the expertise to manage a multi-million dollar business with absolutely zero understanding of the principles of reserve funding and risk management. During the process of reviewing the association's finances I discovered that the board had repeatedly violated their own community covenants and restrictions by failing to use the funds from association fees for the equal benefit of all homeowners. There was also a sweetheart deal with the company who provided security guards for the various neighborhoods in the association. I never was able to determine whether the excess payments to the security firm were the result of outright fraud or simply the result of ignorance of accounting practices and general incompetence. I advised the board members of what I'd discovered, told them that there was a strong possibility their D & O liability policy would not cover them if the financial mismanagement were found to be the result of fraud during the time they were serving on the board. I then resigned. My attempt to inject a modicum of common sense and good business practice into the dealings of the baord was an absolute failure.

  2. I once lived in an HOA community and served on it's board. As bobglover stated it was a mess. You have people who become power happy, and exert (or try to) their supposed authority on the community. It's a no win for the resident. What that experience taught me was to first ask about an HOA and the run fast if the answer was yes.

  3. The bottom line should be, if you're hunting for a home to buy, don't buy in communities with an HOA. The local governments should quit demanding that new communities must have HOAs. When you buy a house in an HOA community, you really don't own your house because all the deed restrictions, etc basically only give you a right to live in the dwelling. So, you buy the dwelling and then have to pay the HOA which can charge any amount they want and make new rules anytime they want. The only people that benefit is the Management Companies and Collection Companies. You, the home own lose all the way around.

  4. Additionally, HOA's should have their HQs in the state they are representing home owners. The HOA should have a paid member of the board residing in or on every property. Problems and issues in the community should be personally addressed by the HOA and the residents should not have to do all the work. If an HOA fails to show due care and effort in correcting problems, an allowance should be made for the removal of board members.

    Who is responsible for the activities of the renters who do not pay HOA fees? A common occurance in our neighborhood is renters and their visitors who damage the property. The HOA wants the residents to follow the vandals and report where they live or who they are visiting. If the resident is not the owner, the HOA does nothing.

    Finally, NO property owner should be subjected to more than one HOA in a given housing area. The real estate Multiple Listing System should show how many HOA's are present for each property and a breakdown of those fees. For example, my property is controlled by three HOA's that cover three different portions of the community; outside the gate is one, inside the gate is two and inside the community is three. Simplified; an exterior HOA, and interior HOA and an interior-interior HOA.

    Something needs to be done to address the shortcomings which in many cases outweigh the benefits of an HOA.

  5. I am a resident in an HOA that does a wonderful job in maintaining the community. I am a board member of a different HOA where I am an investor in several properties. Without the resurgence of that once-dormant HOA, the improvements from a slum property to a decent property would not have been possible. Both HOA's are well-run by board members who care, for the msot part. My bet is that the people who complain so much about HOAs never attend a meeting, never vote, and often are delinquent in their assessments.

    An HOA is merely a form of private government. Without HOAs, municipalities or the county would have to do this work, at far greater cost than it takes the HOA. Local governments cannot keep up with the problems as efficiently as does an HOA. HOAs are vital to the re-emergence of southern Nevada as a vibrant community.

    If you have trouble with your HOA, speak with the community manager and board members in a positive, respectful way. Ask for whatever specific help they might be able to provide. You may be pleasantly surprised at the response.

  6. As for Mr. Rogers' comment above - respect is a two way street sir and to get it you have to give it. I've found very few HOA boards that understand that point.

  7. Seems like I am reading a lot more negatives on the HOA's than positives....I guess a lot more research needs to be done before I sign on the dotted line. It sounds like they are not worth the money that is paid to them. And, I don't deal with any organization without FULL disclosure in writing of where my money is going, that is for sure. I have been reading a considerable amount of stories involving lawsuits concerning HOA's, their collection policies, and their practices. Makes me wonder, that's for sure. I would like to say I'd buy in a place that does not have HOA's, but....for decent property, not previously vandalized...I'm not finding many neighborhoods in Las Vegas that don't have one.