Nebraska HOA fine rules

What this means for homeowners

• Nebraska has no homeowners association act. No Nebraska statute requires an association to give an owner notice before it levies a fine, sets a cure period, guarantees a hearing, or caps the amount of a fine. Whether a Nebraska homeowners association may fine at all, how much, and what steps it must take first are set by the recorded declaration, agreements, bylaws and rules, together with the Nebraska Nonprofit Corporation Act, Neb. Rev. Stat. §§ 21-1901 et seq., for an association incorporated under it, which supplies corporate mechanics rather than fine procedure.
• Nebraska does have one statute written specifically for homeowners' associations, Neb. Rev. Stat. § 52-2001, but it is a lien and foreclosure statute rather than a fine procedure statute. "A homeowners' association has a lien on a member's real estate for any assessment levied against real estate from the time the assessment becomes due and a notice containing the dollar amount of such lien is recorded in the office where mortgages or deeds of trust are recorded. The homeowners' association's lien may be foreclosed in like manner as a mortgage on real estate but the homeowners' association shall give reasonable notice of its action to all lienholders of real estate whose interest would be affected. Unless the homeowners' association declaration or agreement otherwise provides, fees, charges, late charges, and interest charged are enforceable as assessments under this section" (§ 52-2001(1)). The section fixes lien priority (§ 52-2001(2)), gives equal priority to competing association liens (§ 52-2001(3)), extinguishes a lien for unpaid assessments "unless proceedings to enforce the lien are instituted within three years after the full amount of the assessments becomes due" (§ 52-2001(4)), requires that a judgment or decree "include costs and reasonable attorney's fees for the prevailing party" (§ 52-2001(6)), forbids a declaration from making a lien relate back to the filing of the declaration or take priority over a later-recorded mortgage or deed of trust (§ 52-2001(8)), and permits a limited assessment escrow from purchasers on or after September 6, 2013 (§ 52-2001(10)). The one owner-facing information right it creates concerns money owed, not fines: "The homeowners' association, upon written request, shall furnish to a homeowners' association member a recordable statement setting forth the amount of unpaid assessments against his or her real estate. The statement must be furnished within ten business days after receipt of the request and is binding on the homeowners' association, the governing board, and every homeowners' association member" (§ 52-2001(7)).
• One phrase inside § 52-2001 deserves careful reading because it is the closest Nebraska law comes to a pre-fine notice and hearing rule, and it appears in a definition rather than as a duty. Defining the associations to which the lien statute applies, the section says: "Homeowners' association means an association whose members consist of a private group of fee simple owners of residential real estate formed for the purpose of imposing and receiving payments, fees, or other charges for: (A) The use, rental, operation, or maintenance of common elements available to all members and services provided to the member for the benefit of the member or his or her real estate; (B) Late payments of assessments and, after notice and opportunity to be heard, the levying of fines for violations of homeowners' association declarations, agreements, bylaws, or rules and regulations; or (C) The preparation and recordation of amendments to declarations, agreements, resale statements, or statements for unpaid assessments" (Neb. Rev. Stat. § 52-2001(11)(b)(i)). That language sits in the definition of the term "homeowners' association" for purposes of § 52-2001. It is not written as an operative command to an association, it is not made a condition of levying a fine, and the section supplies no cure period, no window for requesting to be heard, no deadline for holding the hearing, no procedure and no cap. Read literally it describes the purposes for which the covered associations are formed. No Nebraska statute elsewhere, no reported Nebraska decision and no Attorney General opinion located in this research treats it as a fine-procedure mandate. Its practical significance runs the other way, through the lien. Section 52-2001 gives its statutory lien and its foreclosure remedy only to an association that meets this definition, and the definition describes an association formed to receive fines only where those fines follow "notice and opportunity to be heard." Whether an association that fines without notice or a hearing satisfies this definition, and what that means for its § 52-2001 lien, is not resolved by any statute, reported decision, or Attorney General opinion located. It does not give an owner an affirmative statutory right to notice or a hearing before being fined.
• Nebraska's notice-and-hearing rule for fines is on the condominium side, and it does not reach single-family homeowners associations. Under the Nebraska Condominium Act a unit owners association may "Impose charges for late payment of assessments and, after notice and opportunity to be heard, levy reasonable fines for violations of the declaration, bylaws, and rules and regulations for the association" (Neb. Rev. Stat. § 76-860(a)(11)). That act reaches only condominiums: "The Nebraska Condominium Act shall apply to all condominiums created within this state after January 1, 1984," and among the provisions extended backward to earlier condominiums are "subdivisions (a)(1) to (a)(6) and (a)(11) to (a)(16) of section 76-860 ... to the extent necessary in construing any of those sections ... but those sections apply only with respect to events and circumstances occurring after January 1, 1984, and do not invalidate existing provisions of the master deed, bylaws, or plans of those condominiums" (§ 76-826(a)). "Condominium means real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of those portions. Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners" (§ 76-827(7)). The homeowners' association lien statute confirms the divide from the other direction: "Homeowners' association does not include a co-owners association organized under the Condominium Property Act or a unit owners association organized under the Nebraska Condominium Act" (§ 52-2001(11)(b)(ii)). Older condominium regimes fall under the Condominium Property Act, Neb. Rev. Stat. §§ 76-801 to 76-823.