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Recent Nevada Supreme Court Foreclosure Decisions

IMG_0431.jpgIn Wells Fargo Bank v. Radecki, Case No. 71405, 134 Nev., Adv. Op. 74 (Sept. 13, 2018), the Nevada Supreme Court held that a foreclosure sale that complied with the relevant provisions of NRS Chapter 116 was not a fraudulent transfer under NRS 112.190(1), even if the purchase price was not “reasonably equivalent” to the property’s value.  Id. at *4 – 5.  The third element of an NRS 112.190(1) claim was not met because of the safe harbor provision contained in NRS 112.170(2), which provides in pertinent part: “a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset pursuant to a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor upon default under a mortgage, deed of trust or security agreement.”  Id. at *5.  HOA foreclosure sales are included in the definition of a “regularly conducted, noncollusive foreclosure sale.”  Id. at *6.  Additionally, “[a]lleged inaccuracies in a foreclosure deed do not invalidate the foreclosure sale.”  Id.


In Bank of Am. v. SFR Invs. Pool 1, Case No. 70501, 134 Nev., Adv. Op. 72 (Sept. 13, 2018), the Nevada Supreme Court held that if the holder of the first deed of trust on the property unconditionally tenders the amount needed to satisfy the superpriority portion of the lien to the HOA before the HOA foreclosure sale, the buyer at the sale takes title to the property subject to the first deed of trust.  Id. at *1.  “Because a trustee has no power to convey an interest in land securing a note or other obligation that is not in default, a purchaser at a foreclosure sale of that lien does not acquire title to that property interest.”  Id. at *9.  Therefore, the sale was void as to the superpriority portion of the HOA’s lien and the purchaser of the property was not a BFP.  Id.  Additionally, “the tendering party is not required to keep a rejected tender good by paying the amount into court.”  Id. at *8.