HOA salaries: Homeowner wants to know who gets paid for what
Q: Thank you for your interesting weekly column. It is good to know that our homeowners association is not the only one with “situations.”
Our HOA of approximately 7,000 homes has many employees. A few homeowners are claiming that the manager and his/her top employees are paid too much. The budget mailed out to residents has a line item of the total salaries. No breakdown by job description or name. Are they required to provide me this information if I request it? Who is the proper information to ask?
A: A qualified, no. In most cases, the employees are that of the management company. It is not unusual to see one line item that includes salaries, benefits and overrides for such items as employee payroll taxes, worker’s compensation insurance, etc. The employee information is confidential. Although you may not see a specific description for each staff member, your management contract does list the functions of the staff by categories and by topics.
Q: Ms. Holland, I read your column regarding HOA issues every Sunday and find it most informative. Our HOA has issues, too. Here are a few questions:
1. During our monthly board of directors meeting, members surface community issues during the Homeowners Forum on both agenda and non-agenda items. The problem is, the board never provides a response, verbal or written. Is this acceptable?
2. Homeowners were distributed a draft of the 2023 budget. The president of the executive board stated that if there are any questions, refer them to the management contractor as they are well versed in the budget process. Are not our elected board members the membership’s first line of communication? In my contracting experience, I learned that one does not approach a contractor, personally.
3. The executive board also determined that a special assessment was necessary. The membership understood the reasoning for the assessment, though it was not well-accepted. However, the board could not/did not provide an explanation for the amount, in this case $3,000 Again, is this acceptable?
A: Here are my answers in order of how they were asked:
1. Under Nevada Revised Statutes 116.31083 (6), the agenda must schedule a homeowner forum at the beginning and at the end of each meeting. The beginning forum must be devoted to the agenda topics. Technically, the board does not need to respond. The community manager should note the comments in the minutes. Only in an emergency can the board take any action on the items mentioned by the homeowners. As we all know, some questions are just rhetorical, some require research and some may pertain to a violation which normally should not be discussed at an open meeting. In your case, whenever possible a short response to the homeowner, without getting into a debate.
2. Many associations have their community manager respond to budget questions as the community manager normally has notes for each line item. Often for board members, it is just a matter of being more comfortable to have the manager respond.
3. The board should have explained the reason for the special assessment and how the amount was calculated.
Q: This particular HOA has a clause in the covenants, conditions and restrictions regarding selling a property within the community. Not sure if this clause would hold up with the Nevada real estate laws.
Prior to the new management company, homeowners were given notice when a property was going to be for sale and that they had the first opportunity to submit an offer within 21 days of the notice. After the 21-day period, the property would go on sale for the general public.
What are your thoughts?
A: The 2021 legislative body passed a bill known as SB 186, which prohibits certain persons from buying a unit at foreclosure. This bill includes the following people who are prohibited from purchasing a foreclosure home:
■ Any person who was involved in the process of foreclosing the association’s lien per NRS 116.3116 to NRS 116.31168.
■ Any person who exercised discretion in any decision relating to the foreclosure of the lien or any person employed by such a person.
■ A collection agency used by the association to collect an obligation relating to the unit.
■ A community manager of the association and any of their assistants.
■ A member of the board.
■ An attorney who provided representation to any of the parties with regard to the foreclosure of the lien.
■ Any person who is related by blood, adoption, marriage or domestic partnership within the third degree of consanguinity or affinity to a person who was involved with the foreclosure.
■ The person conducting the sale of any entity in which that person holds an interest.
For a number of reasons, this association should allow the normal foreclosure notification process and not provide any early notice to its membership. Besides the problem where an owner has mistakenly purchased a unit, contrary to the new law. From a policy position, the board could find itself in a controversy between two or more buyers with offers.
Barbara Holland is an author and educator on real estate management. Questions may be sent to holland744o@gmail.com.
