Changing economic times also changing the ways HOAs operate

Ten years ago, the biggest issues for homeowners associations in the Las Vegas Valley were things such as portable basketball hoops. Today, they’re facing a more pressing conundrum: how to collect monthly fees from vacant or bank-seized homes so they can pay their bills.

It’s not just foreclosed homes that are not paying their share but those in the foreclosure process, as homeowners often stop paying HOA fees when they know they’ll be losing the house.

“People hear ‘bankrupt’ and HOA in the same sentence and they say, ‘What do I care?’ ” said Nicholas Haley, education and information officer with the O mbudsman’s Office. “When they hear, ‘I can be sued,’ then they care.”

Some HOAs have “bad debt” built into their budgets, but these days the O mbudsman’s Office reports, HOAs are seeing as many as 30 to 40 percent of homes defaulting on their monthly fees.

RealtyTrac reported that 2010’s foreclosure rate for Nevada — one in every 119 units — was more than five times the national average. Its website,, has comparisons by ZIP code.

Such a situation may result in HOAs cutting back on paying insurance, utility bills and upkeep. The community club house and pool may be closed, and common areas may become neglected.

This also can be the case when a development is only partially finished. The developer goes bankrupt and disappears. Those homeowners who bought before the housing collapse now have to make up the difference or decide what to do without and how much insurance coverage they need for crumbling stairs and walkways.

Foreclosures mean money is not coming for current repairs but also for future ones. Murray Goldman is the president of the Sun City Summerlin Neighborhood Maintenance Association. Most of the residents there are not in a foreclosure situation, but when things invariably start costing more with inflation, those on a fixed income find it harder to pay more. Still, delinquent payment of fees is only a minor problem in Sun City Summerlin, Goldman said.

But budget reserves are an issue. Analyses are done so money can be budgeted for things such as replacing water walls and even mailboxes.

“You have to replace roof tiles every 10 to 15 years,” he said. “That’s a million bucks for this subdivision, 459 homes.”

He said being hit with big-ticket items such as that means staying on top of costs and planning ahead.

“It’s easier to sell paying an extra 10 bucks a month rather than going to someone down the road and saying, ‘You need to pay 800, 900, a thousand dollars,’ ” he said.

Contact Summerlin and Summerlin South View reporter Jan Hogan at or 387-2949.

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