Q: We are a community of 247 homes, of which the oldest homes are about three years old. The builder has finished building homes, and is in the process of leaving. The board asked my husband (due to his construction experience) to head a transition committee to identify areas they felt the builder/developer needed to repair before they left the development. My husband spent many hours creating a report and told the board that it needed to act ASAP.
For some reason, our board president is unable or unwilling to make demands on the builder or anyone else and this report sat for almost three months without anything being done. We are now afraid that the county is going to release the bond and we will be unable to have the necessary repairs done at the builder’s expense. Since some of these repairs include curb, gutter and streets, we are afraid that, as a private community, we will have to make these repairs and pay for them at a later date. Some of these repairs may effect the resale value of our homes.
This present board also refused to give my husband a copy of the management contract until he read Nevada Revised Statutes 116 and sent them a copy. This is just the tip of the iceberg with the board and the management company. We are going to do out best to get rid of the present board and elect people who are willing to follow the covenants, conditions and restrictions and bylaws.
We would appreciate any help you could provide.
A: One of the most important functions that a board of directors has pertains to the transition of control from declarant (the developer) to a homeowner-controlled board of directors. One of the functions is the community walk whereby the homeowner association has the opportunity of noting any common areas/element deficiencies that are noted on a punch list for the declarant to review before the association signs off. This punch list is presented to the declarant and lists work that the association directors believe should be repaired and or replaced.
Apparently, this was a responsibility of the transition committee to perform this function. For whatever reason, it appears that this report has not been presented to the developer. You are correct that failure to deliver the report would shift the potential costs to repair/replace from the declarant to the homeowners.
You have a few choices: from asking the board to place him on the agenda with the report; or two for you to address the board during the second homeowner forum at the next board meeting.
There is nothing specifically in NRS 116 that states that an association must do a community walk or create a punch list, but to not perform this function could be in violation of the association’s fiduciary responsibility. Directors have a fiduciary responsibility under NRS 116. 3103, as well as being subject to the business judgment rule and the exercising of ordinary and reasonable care of the community. Based upon this section of NRS 116, you could contact the Nevada Real Estate Division and file a formal complaint.
Barbara Holland is a certified property manager, broker and supervisory certified association manager. Questions may be sent to firstname.lastname@example.org.