Ultimately, HOA board is responsible for association

Q: Almost by definition, homeowners association board members are amateurs, dependent on the community association manager to handle maintenance, accounting and rule compliance. But how deeply must the board be involved to verify contractor work and HOA finances? Who is responsible for making sure the gate was correctly repaired, street lights working, irrigation not running into the street?

Our 50-home HOA board abruptly changed from a hands-on approach to now forcing all homeowner contact only through the CAM, going so far as canceling the email address homeowners previously used to message the board and CAM.

Frankly, the CAM has not demonstrated competence, unable to handle simple analysis like projecting our end-of-year reserve for example. Should homeowners expect the board to take more direct oversight of our neighborhood, and expect accessibility to the board?

Thanks for all you do for Vegas communities.

A: Ultimately, the board of directors are responsible for the operation of their association. Boards can delegate some of their responsibilities to a community manager or association management company, but the bottom line requires the board to be diligent, as they are the responsible party.

Many associations have standing committees such as landscape, pools and maintenance that work in concert with their community managers.

Though it may be different with your board, there are many experienced directors. As a reminder, there are many seminars that are offered on a monthly basis for directors both at the Nevada Real Estate Division and at the CAI, Community Association Institute.

As to your issue with the current manager, the board should discuss this issue with their community manager or their regional manager or director to remedy the situation.

Q: As a board president who may be faced with the task of replacing our management company, I have a few procedural questions I’m hoping you can address.

1. Does a decision to seek proposals from potential management companies require a majority vote of the board and if so, is such vote required to occur in a posted board meeting?

2. While requests for other vendor proposals are made through the management company, I assume we would not request our current management company to do that solicitation our behalf. Correct?

3. Are board members allowed to interview potential management companies to determine a short list of potential companies to consider, and are there open meeting laws that must be adhered to if a majority of the board members partake in the interviews?

4. Proposals would be required to be opened during a board meeting and would thus be submitted through the current management company. Are there provisions in the Nevada Revised Statutes that require the current management company to provide services related to its replacement in a timely manner?

5. We understand the contract cancellation provisions within our current contract. There would be a “lame duck” period between our written notice of cancellation and the actual termination. What services can or should the new management company perform during these 60 days?

A: Thank you for your questions. Let me take them one at a time.

1. Yes, the motion to seek proposals for a management company must be on the board’s agenda at a regular scheduled board meeting. A majority vote to seek proposals must be made.

2. Yes. Often the board will form a search committee to solicit proposals. Prior to seeking proposals, your board needs a specification list that needs to be included as part of the management companies’ bid.

3. Yes the board may interview potential companies to develop a short list. Open meeting laws do not apply to homeowner associations, as they are not required by law.

4. The management company must perform its normal responsibilities and obligations as listed in their management agreement with the association.

5. The new management company cannot perform any services during the 60-day period as they are not officially the managers until their commencement date on the contract. They will need the 60-day lead time to begin receiving documentation from the current management company to input into their system.

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