49°F
weather icon Clear

Can my HOA demand NDAs for committee volunteers ?

Updated September 9, 2024 - 1:36 pm

Q: Our homeowners association is requiring a four-page NDA (nondisclosure agreement) signed by any resident who is interested in volunteering to serve on our various committees. We are an active-adult (age-qualified) community with very talented, experienced individuals. Many residents are now either quitting the committees they served on or refusing to volunteer.

Consequently, we have lost many in our pool of talented residents because of the concern they could jeopardize their retirement funds if there was a a legal issue in which their committee may become involved in.

Our governing documents do not require the NDA to be signed. What can be done to rid our community of this nonsense?

A: An NDA is a legal agreement that defines information that the parties wish to protect from dissemination and outlines restrictions on use. NDAs are also valuable to protect the ability to patent an invention, something that can be compromised if a disclosure of the invention becomes public knowledge.

Not all associations utilize the NDA agreement for their board of directors and committee members. The NDA agreement is often used for the board of directors, the Covenant Committee (violation) and for the Finance Committee. Although the NDA may not be specifically noted in the covenants, conditions and restrictions, association boards generally have the power to develop criteria for serving on their committees.

You mentioned legal concerns as one of the reasons for volunteers deciding not to serve on the committees. Generally speaking, committee members are covered under the association’s insurance policy, as committee members could be named in a lawsuit, with or without the NDA. The NDA does have a more direct impact on homeowners serving on committees since it outlines what is acceptable and unacceptable practices.

This policy is a board decision and would most likely have to be rescinded by the board.

Q: I am the treasurer of my association. My board has been debating with each other and with our management company as to what constitutes adequate funding of our reserves. I have been told that Nevada Revised Statutes 116 does not have a specific percentage of what the reserve balance should be. Please advise.

A: NRS 116.3115 pertains to the funding of reserves. There is no specific percentage that is required to be in compliance with this law. Under subsection 2b, the association shall establish adequate reserves, funded on a reasonable basis, for the repair, replacement and restoration of the major components of the common elements and any other portion of the community that the association is obligated to maintain, repair, replace or restore.

Under NRS 116.31151 (1b), the association’s budget must provide adequate funding of the reserves which should be based upon the reserve study.

There has been much discussion of what is adequate reserves. In 2022, the Commission for Common-Interest Communities and Condominium Hotels amended NAC 116.245 to define adequately funded to mean the association had funds sufficient to maintain the common elements as described in the governing documents and most recent reserve study.

Sufficient funds means “without using the funds from the operating accounts and without special or reserve assessments except for occurrences that are a result of unforeseen catastrophic events.”

The CCICCH has been citing associations that do not have adequate reserves. There are penalties for associations who are underfunded.

NRS 116.3115 (2b) does allow an association to establish a funding plan that is designed to allocate the cost for the repair, replacement and restoration over a period of years if the funding plan is designed in an “actuarially sound manner,” which will ensure that sufficient money is available when the repair, replacement and restoration of the major components are necessary.

Q: We live in a rural area in Nevada. Our board hired a self-employed landscaper who lives in our area. Is there any special license that he should carry to service our community?

A: Yes, if your landscaper plans to provide more services other than cutting the grass. There is a C-10 license for landscapers (see Nevada Administrative Code 624.280) who plants and maintains gardens, lawns, shrubs, vines, bushes and trees. In order to work on drainage, irrigation, installation, you would also need a C-10 license.

Your board should check to see if this individual has workers compensation, injury and liability insurance as well as a business license.

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.

MOST READ
Don't miss the big stories. Like us on Facebook.
THE LATEST
Disabled vet’s wife upset about flags improperly displayed

You may want to contact one of the local branch offices of the United States Armed Forces for assistance. Perhaps you could obtain a formal letter from them concerning the flying of the United States flag.

Here is what the law says about service animals

Your board can contact the local Department of Housing and Urban Development office to discuss the specifics of your association, such as these dogs who may possess a possible threat to another individual.

Pahrump community has questions about new development

Under Nevada Revised Statutes 116.3108 (2), an association shall hold a special meeting of the unit owners to address any matter affecting the community if at least 10 percent or any lower percentage specified in the bylaws of the total number of votes in the association request that the secretary call such a meeting.

HOA assessments keep increasing

You would need to review the governing documents of the association as to the percent increase the board can assess, with or without homeowner approval.

Legal action continues over Corporate Transparency Act’s reach

Thomas M. Skiba, CAE, is the CEO for Community Associations Institute. In today’s column he gives a very important update regarding Community Associations Institute v. U.S. Department of Treasury. This challenges the Corporate Transparency Act and its applicability to community associations nationwide.

Trash days always seem to be windy days

You could write a personal letter to each board member asking them to address the trash issue by proposing a regulation that all trash must be in containers or in proper trash bags.

HOA board cannot arbitrary enforce violations

Under subsection 4 of this law, the board’s decision to enforce one set of circumstances does not prevent the board from taking enforcement action under another set of circumstances but the board may not be arbitrary or capricious in taking enforcement action.

HOA board members must disclose conflict of interest

Under the law, each HOA board candidate must make a good faith effort to disclose any financial, business, professional or personal relationship or interest that would result or appeal to a reasonable person to result in potential conflict of interest in serving on the board.

Community Association Institute offers HOA information

The CAI chapter in Las Vegas offers monthly meetings with speakers. In addition, seminars and classes are offered on a regular basis. Published materials can be found on the national CAI webstite at caionline.org .

MORE STORIES