HOA board without a community manager

Q: This is the second or third time I have asked you for advice over the years. I hope you know how superb you are.

A member of our homeowners board of directors recently resigned, making an even number of elected officials left on our board. According to Nevada Revised Statutes, is it necessary to appoint someone to fill this position?

Also our community manager resigned in the same time frame. The chair of the board is taking over the duties of that position with the assistant without proper credentials.

The thoughts from the board is that they have too many projects in the works to address any of the additional administrative issues.

We think this might be an error in judgment. Are we wrong?

A: Under NRS 116.3103 (2c), the board may fill vacancies for the unexpired portion of any term until the next regularly scheduled election of the directors. Some governing documents state that if the board does not fill a vacancy, the membership following the specific procedures can call for an election. You should review the association’s bylaws as to the process of filling a director’s vacancy.

Assuming that the remaining directors do constitute a quorum, the board could delay appointing another homeowner, but that is not advisable. Your association board should appoint a director or call for a special election to fill the vacant position. With an even number of directors, important decisions could be delayed because of a tie vote.

Technically, the board should not be involved in administrative affairs, which is the primary reason for boards to either have an association management company or a licensed community manager to provide that service.

The best advice: Appoint another homeowner to the board and hire a professional licensed community manager to conduct your administrative affairs or hire an association management company.

Q: Nevada Revised Statutes 116.3115 (2b) states that associations shall establish adequate reserves to be funded on a reasonable basis. This section of the law also states that associations may establish a funding plan that is designated to allocate the costs for the repair, replacement and restorations of the major components of the common elements over a period of years. The funding plan must be financially sound and must ensure that sufficient money is available when the repairs, replacements and restorations are necessary.

OK, my question relates to the “lifespan” of the portion of condo complex that is used to calculate the funding: Is there any law that requires a portion of the complex (say, asphalt) to be replaced after those lifespan years is reached when the asphalt is still in great shape? And this assumes that the reserves have the recommended funds in the bank. (I don’t see any such law).

A: There is no specific law. Reserve studies are projections based on interest rates, investment time, life expectancy and cost of the capital expense. Before deciding not to follow the timeline on your reserve study since the asphalt appears to be in good shape, you should have an outside contractor agree in writing of your assessment of the condition of the asphalt. You need to protect the association. Too often such a comment that the “physical condition” looks good has turned out to be a way to avoid spending the money on the improvement or delaying the work because of the lack of funds.

Barbara Holland, CPM, CMCA, is an author, educator and expert witness on real estate issues pertaining to management and brokerage. Questions may be sent to holland744o@gmail.com.