1. Following termination of a condominium or planned community, creditors of the association holding liens on the units, which were recorded before termination, may enforce those liens in the same manner as any lienholder. All other creditors of the association are to be treated as if they had perfected liens on the units immediately before termination.
2. In a cooperative, the declaration may provide that all creditors of the association have priority over any interests of units’ owners and creditors of units’ owners. In that event, following termination, creditors of the association holding liens on the cooperative which were recorded before termination may enforce their liens in the same manner as any lienholder, and any other creditor of the association is to be treated as if the creditor had perfected a lien against the cooperative immediately before termination. Unless the declaration provides that all creditors of the association have that priority:
(a) The lien of each creditor of the association which was perfected against the association before termination becomes, upon termination, a lien against each unit’s owner’s interest in the unit as of the date the lien was perfected;
(b) Any other creditor of the association is to be treated upon termination as if the creditor had perfected a lien against each unit’s owner’s interest immediately before termination;
(c) The amount of the lien of an association’s creditor described in paragraphs (a) and (b) against each of the units’ owners’ interest must be proportionate to the ratio which each unit’s liability for common expenses bears to the liability for common expenses of all of the units;
(d) The lien of each creditor of each unit’s owner which was perfected before termination continues as a lien against that owner’s unit as of the date the lien was perfected; and
(e) The assets of the association must be distributed to all units’ owners and all lienholders as their interests may appear in the order described in this section.
Creditors of the association are not entitled to payment from any unit’s owner in excess of the amount of the creditor’s lien against that owner’s interest.
(Added to NRS by 1991, 553)
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