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State law says HOA should properly fund reserve

Q: My homeowners association is planning for our 2020 budget, and will not meet the minimum contribution requirement as written in our recent reserve study. Our study requires a minimum of $40,000 per month, yet our proposed budget will be $28,000 per month.

There has been no explanation as to why are we not following the minimum reserve contribution and no plan to make up lost payments in the future.

Our current reserve is healthy, yet we have big-ticket items coming up in our reserve plan. I follow the HOA accounts and spending, and recent big projects have been costing notably more than the reserve predicted.

For example, in the near future, we have to refurbish all hallways walls and carpeting in our nine residential buildings. This will cost more than $1 million.

It would be prudent if the board members funded our reserve at the minimum levels as prescribed by the approved reserve study. Following the study recommendations would protect their “fiduciary responsibility.”

My question to you is, if our HOA board chooses not to follow the minimum funding recommendations, should there be a written explanation and executable plan to restore the funds?

Your guidance is appreciated, in advance, also I would be happy to do more research if you would point me in the correct direction.

A: Under Nevada Revised Statute 116.3115, it is the association’s responsibility to properly fund the reserves as noted in section 2b, as follows: “The association shall establish adequate reserves funded on a reasonable basis.”

If your association is not funding the reserves as recommended by the reserve specialist, the association would need to develop a funding plan designed in a sound manner, which will ensure that sufficient money is available when the association is obligated to maintain, repair, replacement and restoration of the major components.

In your case, there should be an explanation from the board as to why it has decided to contribute less reserve funds than what was indicated in the reserve study.

Q: Does a tow truck company have the right to tow a car if the temporary registration was expired; and parked in front of single-family home on a regular residential street, not a private street, but city-maintained street. Can they tow it, or does the city have to come tag the car. My car was towed from in front of my home 24 hours after tagged by a tow company. Not tagged by city parking enforcement.

A: It appears your vehicle was parked on a city street. If this is the case, only the police department can have the vehicle towed. If the street is actually private but maintained by the city, the association could have the vehicle towed, but the vehicle would have need to be tagged first before it was towed.

Q: Residents of my complex are required to take pictures of violations and then fill out a complaint form. I see the president of the homeowner association walking the complex, seeing glaring violations, and still no action is taken. What is the next step as she is obviously not addressing this. Isn’t it her duty to address violations if she sees them? Thank you!

A: The issue with violations is that neither the board nor the management company can explicitly tell you what steps the board is addressing. The most that an association can do for the enforcement of the governing documents is to fine the homeowner. If a homeowner wants to ignore the compliance letter, the board has the right to fine that homeowner each week until compliance. You may see violations and “no actions” but would not know what steps have been taken by the association following the due process of their rules and regulations.

My suggestion is to bring the issues to the board or management’s attention to confirm that they are aware of the violations. If you truly believes the board is not addressing the violations, you can contact the Ombudsman Office at the Nevada Real Estate Division and file a formal complaint.

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

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