weather icon Clear

Inexperienced HOA board can cause damage

Q: We purchased a home in a community roughly seven years ago and were satisfied up until earlier this year.

The association attorney is a friend or distant relative of a board member. In a recent decision he advised a few of them that in an emergency situation, a homeowner vote was not needed. Our covenants, conditions and restrictions are pretty clear about informing homeowners and what is required for approval.

Projects they got involved with ran severely over budget. One or two involved safety because electricity is likely involved. They were Band-Aided but not finished correctly. And some vendors are vanishing one by one, being replaced with, what a lot of us fear, cheaper, which usually means underinsured or substandard workmanship.

I need help as I am now acting president of a HOA after we fired the last president. In the past 18 months, our community management company and the former president have drained our reserve account for more than $421,000. I have gone to the Metropolitan Police Department, and they said it was a civil matter and to get a lawyer. I went to the Nevada Real Estate Division, and they said they could only pull the community manager’s license.

A: You have several concerns. The first being the lack of experience of the current board of directors. Associations that are having problems finding homeowners to serve should review how they operate and make modifications.

As to the attorney, NRS 116.31084 requires board members who stand to gain any personal profit or compensation of any kind are to disclose the matter to the board and are to abstain from voting on any matter. Regardless of the relationship, the attorney does have fiduciary responsibilities to the association, as a whole.

Generally speaking, in cases of emergencies that require spending, most governing documents would allow the board of directors to make that decision. The law has changed as to the soliciting of bids. If the association has fewer than 1,000 units, the board can make purchases up to 3 percent of its annual assessment budget, and if more than 1,000 units, up to 1 percent of the annual assessment budget.

If there are board members who are not aware of events or decisions, I highly suggest that they have a workshop meeting with the entire board, community manager and legal counsel to have a major discussion as to the operations of an association and what procedures are necessary.

You are assuming new vendors are not properly insured or that they provide substandard workmanship. To learn more, you could contact Nevada Contractors Board at 702-486-1100. It can provide specific information as to whether a contractor has proper insurance and licenses.

You have the legal right to ask for an appointment at the management company to review the financial activity of the reserve account. You can ask for copies of the invoices that were paid from that account with a copy of the reserve study.

By law, neither the community management company nor the community manager can sign a reserve check. Also, please note that there are no state licenses for community management companies, only the community managers and provisional managers are licensed.

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

Don't miss the big stories. Like us on Facebook.
Yes, HOA’s can be sued that’s why they carry insurance

Yes, associations can be sued, which is why associations carry multiple kinds of insurance. In your case, the lawsuit should be forwarded to the insurance company who provides the directors and officers insurance policy.

Bids for work must be opened at board meeting

When bids are requested, the law requires them to be sealed and opened at a board meeting at which time the amount of each bid is to be announced.

Rude neighbor frays everyone’s nerves

Sorry to hear that you have such a rude neighbor. The association’s only recourse is to fine the homeowner. Based upon the amount of the fines if they totaled over $500, the board may consider placing a lien on his property.

State Legislature should review HOA disclosure policies

The law does require disclosure, unfortunately, it does not state that the candidate can be disqualified by the association, nor does the law state the association has the right to inform the membership of information that should have been disclosed by the candidate that would deem that candidate ineligible.

Homeowner thinks planned clubhouse too expensive

Generally speaking the management company would not be involved in any manner as to the construction of the proposed clubhouse, including the “sales presentation,” unless specifically directed by the declarant board of directors.

Find out what financial resources could help your HOA

This week, we are turning over the column to the Nevada Chapter, Community Associations Institute’s Community Interests magazine staff. This column, which first appeared in the online Community Interests magazine , cai-nevada.org, looks at little-known financial resources for your homeowners association.

HOA residents need to be responsible dog owners

Q: I recently found your column in the Sunday paper and wanted to ask a question. My homeowners association states in the community rules that there are to be no pets over 25 pounds, as there is a two-dog limit rule, with having both dogs at a 45-pound limit for two pets.

HOA and county agree: take in your garbage cans

Q: I used to own a condo and always found your articles on a variety of subjects helpful and interesting. My question relates to garbage cans in non-condo developments. I have neighbors who leave them in front of their garage doors 100 percent of the time. Now, many of the other residents are doing the same thing.

HOA board has armed guards attend meeting

As to the first question, I would not say security is common per se, but there are associations that have security guards present at their association meetings.

HOA board members should take care in communications

Every day we communicate, be it our telephone conversations, our emails and our letters. As community managers and homeowners association board members, we communicate when we send governing documents, budgets and financial reports to our residents.