Condo owner has questions about HOA money handling
Educational courses are recommended but not required of board members.
February 10, 2023 - 1:04 pm
Q: I’m seeking advice.
1.) Four years ago I paid in advance, but it was depleted to pay late fees I had not incurred. We have two units, but payments were made on one unit.
2.) My step was damaged, over a year ago. It happened before and was readily replaced. To date no action was taken when I reported it.
3.) My wife was elected treasurer a year ago, but never saw the budget details/preparation pass through for review and approval. Only the president, upon recommendation of the management company manager, oversees any disbursement. Correct me if I’m wrong: It takes two officers for approval (per Nevada Revised Statutes).
4.) I received a bill for $650 for a valve replacement, when the same problem occurred in our other unit (six months ago), it only cost me $140. What I can’t understand was why they had the management company’s plumber do it without consulting us. They deducted (the bill) on my advance payment, which I disputed.
5.) I understand that over a certain amount of money, you don’t need three quotes. But, reviewing the plumber’s account, they have been used for years, without (getting another bid.) How can I have them check other plumbers for updated comparisons?
6,) Of course, just to comment on the new president, when I requested to reconcile my account, he quickly replied that the management company is not a bank.
7.) Most of the damages I incurred was from the old management company, who left the business, and the president, who moved out. Can I still go after them if the new management company and president doesn’t want to help me?
A: 1.) Send a formal letter, certified return receipt to the association with the specific financial information and your backup documentation. If the association does not respond within 21 days, contact the Nevada Real Estate Division.
2.) Under NRS 116.3107, the association has the duty to provide for the maintenance, repair and replacement of the common elements, and an owner has a duty to provide for the same for his or her unit. The insurance should have proper coverage.
3.) NRS 116.31153 states that money to be withdrawn from a reserve account requires at least two members of the board or at least one member of the board and one officer of the association, who is not a member of the board. As to the operating account, at least one member of the board or one officer with a board member or the community manager, as two signatures are required. Please note the law does not specify which member of the board. Again, you would need to check the minutes or a resolution from the board as to the signers. As to the other comments, the treasurer should have a role with the finances of the association, including the budget.
4.) Generally speaking, I don’t think there is anything you can do about this, depending upon your governing documents.
5.) First, there should be a resolution from the board as to the president’s purchasing limit. Second, if the board votes to obtain bids, the bids would be opened at a board meeting with a decision being made by majority vote of the board. Bids are not required if the purchase is 3 percent or less of the annual budget for associations under 1,000 units and 1 percent of associations over 1,000 units.
6.) Educational courses are recommended but not required of board members.
7.) You must have solid documentation of the events and be prepared to go to District Court.
Barbara Holland, CPM is an author, educator, expert witness on real estate issues pertaining to management and brokerage. Questions may be sent to firstname.lastname@example.org