What was already there, and must not be attributed to this bill

NRS 361.610 contains prominent language about associations and excess proceeds. That language is pre-existing law that AB 133 carried forward unamended, and getting this wrong is the easiest mistake to make about the section. What it provides, and continues to provide:

• An association that has recorded a notice of default and election to sell under NRS 116.31162(1)(b) has a claim priority on excess proceeds.
• Parallel provisions do the same for condominium hotels under NRS 116B.
• An association that recovers excess proceeds is deemed paid in full, with no deficiency remaining against the former owner.

None of that is new in 2025. What is new is the forum in which a contested claim to that money is decided.

Why the forum change costs associations money

A treasurer's hearing is administrative. It is scheduled by the county, it has no filing fee, and an association's community manager or a board member can attend and present the recorded lien documents without counsel.

An interpleader action is not any of those things. It is filed in district court, the association has to appear as a claimant, and appearing means a filing, a response on a court schedule, and in practice a lawyer. For a surplus of a few thousand dollars — which is what a great many association claims are worth — the cost of appearing can approach or exceed the amount claimed.

The honest assessment is that AB 133 makes a small association claim less economic to pursue. Whether that was the intent is not stated in the bill.

The countervailing point

There is a fair argument the other way, and it should be made. A treasurer deciding between competing claimants to a fund is an administrative officer adjudicating property rights, which is an uncomfortable position for a county official and a weak procedural posture for anyone who loses. Interpleader puts the question in front of a judge with the parties properly before the court, and the resulting determination is a judgment rather than an administrative decision.

For a large contested surplus — several claimants, a disputed lien priority, a former owner and an assignee both asserting rights — that is a better process. The burden falls on the small claim, not the large one.

What an association can do

• Recording matters more than it did. The priority in NRS 361.610 turns on having recorded the notice of default and election to sell under NRS 116.31162(1)(b). An association that never recorded is not a priority claimant, and now faces the additional cost of establishing anything at all in court.
• Watch the county's tax-sale calendar for units in your community. The excess proceeds process runs on statutory deadlines, and a claim filed late is a claim lost regardless of forum.
• Do the arithmetic before instructing counsel. If the surplus is smaller than the cost of appearing in an interpleader, the board's decision is made either deliberately or by default after the invoices arrive.
• Take the paid-in-full rule seriously. Recovering excess proceeds extinguishes the debt with no deficiency. That is a complete resolution, and it is worth more than a partial recovery that leaves collection activity running.
• Note the recovery-agent cap. The 10 percent limit now covers a broader class of claimants. An association approached by a firm offering to pursue a surplus on contingency should check the figure against the statute.

A note on the effective date

AB 133 contains no effective-date section. Under NRS 218D.330, a Nevada law with no specified date becomes effective on the October 1 following its passage — so October 1, 2025. That date is the product of the default rule rather than a line in the act, and is stated here on that basis.