Q: I was recently re-elected to our homeowners association board of directors after having served on our board a few years ago. At the same time, our president was not re-elected, primarily because the homeowners did not approve of how he and our community manager formed an alliance with one another to the exclusion of everyone else, including the remaining board members. It seems our manager is doing much of the same now with a new board member.
As a first order of business, one other board member and I, plus many homeowners, wanted to start fresh with a new community manager, but we do not have a majority vote of our five-member board. Most times, our manager does not answer my emails with simple questions regarding ongoing HOA issues. Also, he never comes to our community except for board meetings. Someone else does a walk-through once a month.
My questions are: What is the responsibility of a community manager? Is he obligated to act in accordance with the entire board, and is there anything in the Nevada Revised Statutes 116 that states this? If he continues to work solely with the one board member, what recourse do the other board members have at this point? I cannot see where the interests of our HOA will be met without the entire board being informed of all ongoing issues and our input. Is our manager obligated to personally do a periodic walk-through, and should he be available to come to our community when needed?
A: NRS 116A.630 lists the standards of practice for community managers. A community manager acts as a fiduciary in any client relationship. That includes not just board members but also homeowners. The manager must exercise ordinary and reasonable care in the performance of his duties, which can be found within the management agreement that is signed between the parties (generally the contract is signed by the management company with the board of directors). Managers have a legal obligation to comply with all federal, state and local laws, ordinances and regulations. Some of the more specific standards include providing reasonable assurances in the reliability of the financial reporting such as proper maintenance of accounting records, documentation of the authorization of expenditures and verification of the integrity of the date used in business decisions. Other requirements pertain to obtaining bids, developing collection policies, providing timely updates and reports.
In addressing your specific concerns about relationships, this section of the law states that the community manager complies with the direction of a client unless the directions conflict with laws and the associaiton’s governing documents. The client is the board, not just one director. Typically what does happen is that the community manager works closely with the president and committee chairs, such as finance or grounds and property, as these are the people who speak with the manager or a more regular basis than the other directors.
The law does not state that the community manager must inspect the community. This is where the management agreement comes into play as to the specific functions of the community manager. You would need to review this agreement to see if it meeting the needs of the community and to determine if the functions listed are being performed by your community manager. There are management companies which hire specific inspectors whose sole function is to inspect the physical common elements of the association as well as recording any of the association’s governing documents of the residents within the community. Regardless, a community manager should have working knowledge of their community and its issues.
If you believe that the current manager is ineffective, you need to have consensus with the majority of the board members. If that is the case, you would want to speak with the management company of the board’s concerns and ask that another manager be assigned to your community.
Barbara Holland is a certified property manager, broker and supervisory certified association manager. Questions may be sent to firstname.lastname@example.org.