Can heirs and probate administrators be held liable for debts not claimed during the creditors period?

Asked about 2 years ago - Henderson, NV

We closed probate on our sister's estate, and evidently there were HOA unpaid dues of about $200 to the master association during the 18 month probate period. We were not aware of the dues during probate. The master association filed a lien on the property during probate. Could we get out of paying this due to this clause in the final settlement petition and/or NRSĀ 17.140?
"After it appears that the Estate has been fully administered and all monies due, and all property of the Estate has been delivered to the distributees entitled thereto, and the Executor has performed all of the acts required of the Co-Administrators this Court may enter its Decree discharging the Co-Administrators from all liability thereunder to be incurred relative to these proceedings."

Additional information

Johnathan Thanks for the reply. First off there is no mortgate, we inherited free and clear so I'm not even sure foreclosure is possible as there is no note to foreclose on. Second, I should have mentioned that even though the HOA wasn't mailed the creditor letter - our probate attorney didn't say we had to and that just getting the necessary bill was all that was needed. We did in fact call the managment company advising them of the probate and requested all details about where, when, and how much we owed for any dues. They even emailed us a scan of payment slip for our records. The issue is that the managment company failed to inform of the master dues, even though they were the same company managing the sub and master association. So it is not like they didn't have our request nor knowledge of the dues.
Also, no one has responded to whether we have a case under NRS 17.140 which seems to prohibit new liens during probate. Can anyone speak to this statute as I 'm a bit confused by it.
Thanks.

Attorney answers (3)

  1. Jonathan Craig Reed

    Pro

    Contributor Level 16

    1

    Lawyer agrees

    Answered . Your questions raises two issues:

    First, HOA dues, real estate taxes, and a mortgage of real estate remain as liens on the real estate even if the creditor is given notice and fails to file a timely claim. Thus if a heir receives the property it will come with the HOA lien attached. Likewise the estate cannot make a mortgage vanish because the bank fails to file a timely notice of a creditor's claim.

    The second issue is whether heirs not receiving the real estate in the HOA are liable. Since your probate took 18 months I assume it was either a summary or general administration. The administrator had a duty to send actual to notice to all known creditors. "Known" means creditors the administrator knew about or should have known about. There is an argument that the administrator should have figured out there was as a master HOA monthly bill and thus had constructive knowledge of the HOA obligation and a duty to give actual notice to the HOA.

    However, the HOA lien trumps the mortgage, if any, on the real estate. So, it is very unlikely that the HOA will be unable to satisify its lien by foreclosing or threatening to foreclose on the real estate. So, as a practical matter, the only heir who likely has anything to fear from this lien is the heir who gets the real estate.

    Because so much Las Vegas real estate is underwater (e.g., more is owed on the mortgage than the real is worth) the question often comes up as to whether the bank holding the mortgage has a claim against the other property of the estate. While a good probate attorney cannot get the mortgage removed, a good estate attorney will send the bank a Notice to Creditors and if the bank fails to respond within the statutory period (60 or 90 days) the attorney can then get a court order saying that the bank's interest is limited to foreclosing on the property--it cannot go after the other assets of the estate. Ditto for an HOA lien. (For a variety of reasons banks and HOAs almost always fail to respond in the required time.)

  2. Dara J. Goldsmith

    Pro

    Contributor Level 14

    1

    Lawyer agrees

    Answered . The HOA needs to be paid or the HOA can foreclose on the property to have the lien paid. The sooner this is taken care of, the better..... Whether the estate personal representatives should have been discharged is another issue. If you are not one of the estate representatives you may want to address the possible liability of the estate personal representatives with counsel. If it is a small amount or family, you may want to not pursue the issue. If you are one of the PRs you may want to consider using some of your fees toward the penalties and interest. However, pay the HOA ASAP to avoid additional fees and penalties...... Good luck.

    This response is not intended to create an attorney client relationship. The response is solely intended to... more
  3. Joseph L Morton III

    Contributor Level 7

    2

    Lawyers agree

    Answered . Administrators can be held liable if they did not perform their duties properly. In this case, did they go through the required steps to notify creditors of the probate proceeding. If they did, and the creditor failed to take the steps necessary to submit their claim, the creditor will probably be out of luck. If the claim was for bills arising during the probate period, there may well be a claim against the administrator for failing to pay them. I would contact the attorney that helped you through the process. They will be able to help you assess the answers to the questions above and advise you on a course of action.

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