Estate sales are different than garage sales

Updated June 22, 2018 - 4:56 pm

Q: We are moving out of state and want to have an estate sale in the cool month of January 2019. Our homeowners association rules state that this is a garage sale and must be held in May or September of each year. An estate sale is not the exact thing as a garage sale, and should not be so restrictive.

Can you help on this question? I am past president of two HOAs in California and this a dumb rule.

A: You are correct. An estate sale is not a garage sale. An estate sale or estate liquidation is a sale or auction to dispose of substantial portion of the materials owned by a person who is recently deceased or who must dispose of his or her personal property to facilitate a move. These sales are used when someone is in need of a way to sell items due to downsizing, moving, divorce, bankruptcy or death.

Often the estate sale is required due to a court decision.

In this case, the association can ask you for the proper documentation of this estate sale and grant the sale as an exemption.

Q: We have a self-managed co-op complex. An owner purchased several units a year or so ago. He asked for the names of all the owners in the complex at that time to make possible additional buys. The board refused as the owner information is confidential. Besides, statute says we can’t give out that information. So, he gets elected to the board as a director. He asked for and was given the names and addresses of the owners.

He now demands the phone numbers of the owners. I asked him why phone numbers. He said for communications. I refused to pass on these numbers because its an invasion of owners’ privacy. We have most numbers in our office for emergency calls (water leaks, electrical, drain stoppages, etc.). Most units are rented and many owners are out of state. I have advised him to make contact by letter to see if any are interested in selling and I think the board should have a copy of what another board member sends out to owners.

A: You are correct. There is a conflict of interest. Nevada Revised Statutes 116.3103 (1b) states that board members are subject to the conflict-of-interest rules governing the officers and directors of a nonprofit corporation organized under the laws of this state. Utilizing contact information of homeowners for the purpose of soliciting business would be considered a conflict of interest. In addition, associations are not required per NRS 116.31175 (4b) to provide records relating to unit owners.

The association board may want to have legal counsel write a formal letter to this board of director to establish proper protocol in this matter.

Q: I read and respect your column every Sunday in the RJ. I would like your opinion on this subject:

Our management accompany charged an additional fee of $150 per month for several months, until they were questioned about it. That was after it received a certified letter. The response was that the extra cost represent the fees the management company charges up front, but they are collected and paid back to the HOA when the owners pays their assessments. This is called a pass-through.

I contacted an HOA attorney and it was his opinion that this whole process is illegal for any management company to loan money to the HOA, collect it back, and then keep any late charges. He suggested that I contact the ombudsman’s office. I personally contacted the ombudsman’s office and they would not even discuss it because they had gotten in trouble before for discussing such issues.

Also, I should mention that the management company is not working off an approved yearly budget by the membership. This pass-through, according to the management company, is to be an item on the agenda for the next board meeting, which should be scheduled soon. Since this has been a practice of this management company for a number of months, why is it just now becoming an agenda item, and not until it was brought to their attention?

A: Based upon your email, I am assuming that the $150 fee pertains to your association’s collection policy. A delinquency or collection processing fee is charged to the association for the management company’s services. The homeowner is than charged the fee to reimburse the association. I don’t think this is a case where the management company actually loaned the association funds. This procedure may well be stated in the management agreement with the association. I would assume it is now on the agenda because the issue was raised and hopefully your concerns will be more clearly answered.

Barbara Holland is a certified property manager, broker and supervisory certified association manager. Questions may be sent to holland744o@gmail.com.

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