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SFR Investments Pool 1, LLC v. U.S. Bank, N.A.

Supreme Court of Nevada
334 P.3d 408 (2014)


U.S. Bank, N.A. (defendant) held a deed of trust to a property in Southern Highlands, a common-interest community. The owners of the property became delinquent in their dues payments to the Southern Highlands Community Association (SHHOA). The owners also defaulted on their payments to the bank. SHHOA held a trustee’s sale at which SFR Investments Pool 1, LLC (SFR) (plaintiff) purchased the property. The bank planned a separate trustee’s sale for the property, but SFR brought suit to stop the sale. SFR asserted that its trustee’s deed from SHHOA extinguished the bank’s deed of trust. SFR based its claim on a Nevada law under the Uniform Common Interest Ownership Act (UCIOA). The law stated the HOA had superpriority on the homeowner’s property over all other liens, including a first deed of trust, for up to nine months of an owner’s delinquent homeowners’ association (HOA) dues. The trial court denied SFR’s motion for a preliminary injunction and granted the bank’s motion to dismiss, finding the UCIOA required SHHOA to foreclose judicially. SFR appealed.

Rule of Law


Holding and Reasoning (Pickering, J.)

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