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HOAs can buy flood insurance but it’s expensive

Updated September 18, 2023 - 2:20 pm

Q: My town house/condominium complex is not in a 100-year flood zone. However, it is close to the upper edge of the area designated as a high-risk flood zone.

Flood insurance is not required, according to the covenants, conditions and restrictions. Nevertheless, with the recent heavy rains, some residents feel the homeowners association should carry the insurance for the complex. Is it possible for the HOA to purchase flood insurance for the complex even though it is not in a high-risk flood zone?

A: Yes. Your association would have to pay for it. It is expensive and most likely your board would need to include flood insurance on the 2024 operating budget.

Q: I live in a relatively large HOA in Clark County. We have had a volunteer security patrol for about 30 years with no issues. Recently, it was suggested that because of the risk of using the word “security” in the name we should change the name of the community organization. There is a committee of security patrol volunteers looking at this issue and the committee is unable to find any claims or litigation because of the use of the word “security” in the name of the patrol. Are you aware of any known risks to continuing with the name “security patrol.” Thanks for your assistance.

A: You probably should contact your insurance representative to discuss this issue. You need to make sure that your security committee volunteers are covered by your association’s insurance policy as well as under worker’s compensation, in case an accident or some violent action occurs.

You should also speak with your legal counsel as to the liability when a committee member takes matters into their own hands. If you remember in February 2012, an association in Sanford, Florida, was sued when George Zimmerman, a neighborhood watch captain, shot and killed Trayvon Martin.

The word “security” implies a sense of protection. Your volunteers are basically observers. You observe and report. Your committee takes no other action other than contacting the police department. You should have written guidelines as you do not want to have a volunteer become Rambo.

Many community managers and management companies are very sensitive to the words security patrol. Over the years, we have been taught to avoid the words “security patrol.”

Q: My HOA announced in its monthly newsletter that there is a new resident form to fill out along with the information required to received a vehicle decal for residents. Along with this form they require driver’s license, our vehicle registration form and a copy of vehicle insurance to be copied, which they will retain. The CC&Rs do not ask for those three forms. It only asks for make, model, year of vehicle and a driver’s license number.

I believe a photo copy of a driver’s license, vehicle registration and insurance is private information that should not be given to the HOA to be kept in an unsecured office and this is an unlawful request. They can see by the yearly sticker on our vehicles that vehicles are registered and insured. What are the laws concerning this?

A: There are no Nevada Revised Statutes 116 that pertain to how an association can certify whether a homeowner has a valid driver’s license, a valid vehicle registration and current insurance in order for the resident to drive their vehicle on association property. Obviously, the state of Nevada requires drivers to carry a valid driver’s license and a registered vehicle with current insurance.

Rules and regulations should be consistent with the CC&Rs. The association has spelled out in more detail of the documentation needed to obtain a parking decal. A valid license plate which is good for one year does not guarantee a current insurance policy for the vehicle.

There was an association that was clamping down on residents, vendors and guests only to be amazed at the number of drivers that had to be turned away for not having a current driver’s license or insurance for their vehicles.

By strengthening their procedure, this association is attempting to protect all residents from accidents that occur from drivers by requiring the detailed records that would allow a victim of an accident to file a claim against the driver.

As to security of records, with the passage of Senate Bill 378 requiring associations or their payment processors to maintain cyber insurance for online payments, these cyber policies may possibly provide protection against identity theft pertaining to the records being requested by your association.

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

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New law improves online protections for homeowners

Pursuant to SB 378, that was adopted this session and went into law earlier this year, entities processing homeowner payment transactions are now required to maintain a minimum of $5 million dollars in cyber-security insurance “that provides coverage for losses arising out of or relating to data breaches, unauthorized intrusions into an information system, computer viruses, ransomware, identity theft and similar exposures.”

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Homeowner says HOA doesn’t communicate well

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Homeowners can meet to air concerns about HOA

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Columnist Barbara Holland celebrates 25 years of HOA QA

For over 25 years, Holland dedicated her time and expertise to Las Vegas homeowners’s concern through her column, which is published on Sunday in the Las Vegas Review-Journal’s real estate section.