Many sections of AB 448 need research, rewriting

Editor's Note: Barbara Holland is taking a break from her question-and-answer format to address some upcoming bills the Legislature is considering in the next few weeks. This is the second column in a special three-part series.

I would like to continue discussing more sections of Assembly Bill 448, which is rather lengthy and complicated, and explain why I think it would make a bad law.

• Page 12 , Section 6 -- Appointment of the receiver. What is missing in this section is the actual relationship between the remaining board members and the receiver. For the violation hearings, does the receiver make that decision? Does the receiver act as a member of the board and vote with the other board members? For all business normally voted on by the board members, will existing board members have any say in the operation of their association, or is the receiver taking full control? This is a major change to the law, and there may actually be cases where the appointment of the receiver would be necessary. But there needs to be more research by checking laws in other states and finding out how well the procedure is working.

• Page 15, Section 2 -- I am sorry to say that this is probably one of the most ridiculous proposed laws I have seen. It states, for example, if Association A fines an owner or a tenant, or an invitee of a unit owner that Association B cannot fine, that same owner for a different unit in a different association if that owner, his or her tenant or invitee were to violate an association regulation. It would appear to me that you have a problem with the owner and not with the associations.

• Page 16, Section 9 -- If a unit owner was fined, the unit owner could claim the board violated a provision of the governing documents and ask the division to have the fine stayed until the conclusion of a mediation or arbitration. The first problem is that mediations and arbitrations are so backlogged that the fine could be easily stayed for more than a year or two. The proposed law could also overburden an already overloaded Nevada Commission for Common-Interest Communities and Condominium Hotels. In addition, what happens if this homeowner continues the "alleged" violation? As a number of state legislators know, I have been writing a column in the Review-Journal since 1996 on associations, helping members of the public with association issues, answering issues raised by board members, as well as those by homeowners. It should not surprise you, but half of the letters I receive are from homeowners, not necessarily board members, who complain that their associations are not enforcing association regulations. If this became a law, all I could say at a board meeting when asked the question "Why hasn't the association taken care of this homeowner and his violation after one year of waiting?" is that "we are following due process."

• Page 20, Section 9 -- I would ask each committee member to read Nevada Revised Statutes 116.31034, which pertains to the election of directors and Section 8, which pertains to nomination of members as candidates to the board.

The proposed law concerns two owners residing together in the same house and being related in some manner, and who both become board members (assuming they would vote the same way on issues). And yet, there are more serious issues with the current law pertaining to disclosure, as to whether the candidate is a member in good standing and making a good-faith effort to disclose various conflicts of interests. The law requires candidates to adhere to these regulations.

If candidates fail to properly make these disclosures, the association is prohibited by law from informing the membership. Homeowners could elect a person who is not in good standing and not realize that this board member, by law, is prohibited in participating at hearings. If you have a three-person board, you now have only two board members who can serve at hearing meetings.

The writers of this bill should be more concerned about this loophole in the law. Should we impose a law that says friends cannot serve on the board at the same time because they will vote the same way? What we need to do is to correct the existing law by allowing the associations to make full disclosures, if the members who are running have failed to do so as required by law.

• Page 29 Section 12 - This would allow a unit owner to videotape the meeting. Currently, the law allows meetings to be audiotaped. This should be deleted from the proposed law. The community would have no idea how the video could be used, and it could lead to liability issues.

Barbara Holland, certified property manager, is president and owner of H&L Realty and Management Co. To ask her a question, email support@hlrealty.com.