Can HOA directors accept money for community work?

Q: Recently, two of the directors on the board of our homeowners association accepted compensation for services performed for the association, which we feel may be in violation of Nevada law.

The first incident involves a director painting three gates and charging the association $1,470 for materials and labor. The president of the association, a personal friend of the director, approved the expenditure without the knowledge of the other three board members. The expenditure was not discovered until a later HOA meeting when the financial statements revealed the payment to the director.

The second incident also involves a director doing painting for the association, this time covering graffiti on a wall in our community. The director charged $200 for labor in addition to out-of-pocket expenses for the materials.

It should be noted that both the directors involved own companies and billed through their companies, although neither company is a painting contractor and does not do painting as its normal business. It appears that the actions of these directors, and perhaps the president, are in violation of the Nevada statue forbidding directors from receiving compensation for services to the association. What is your opinion?

Also, if the board members refuse to comply with the law, what would be our avenue of relief? Should we contact the management company, our attorneys, the courts or the ombudsman?

A: According to NRS 116.31185 subsection 1b, the state law would prohibit these board members from performing services to the association for compensation. This section states that a director shall not accept compensation that would result or would appear to a reasonable person to result as a conflict of interest.

Contact the ombudsman office for assistance.

Q: Over the past few years I have had problems with the neighbor's landscaper blowing debris into my yard. I have been advised by the manager that the association cannot take action on this problem since it is considered a neighbor-to-neighbor problem. The neighbor's landscaper blew debris into our private street and it all ended up in front of my home. This same neighbor parks his motor home in excess of minimum time requirements on private streets but association is not doing anything. I contacted the ombudsman's office and it recommended resolving this problem within the association. For further action, I have to go through a complicated process involving certified letters and notarized signatures just to seek protection of my property. Is there any help for me?

A: Neither the board of directors nor the community manager can specifically disclose to another homeowner the status of violations against other homeowners because of the privacy laws, both federal and state (NRS 116).  If you were to complete the paperwork and follow the procedure that you were given by the ombudsman's office, its staff would be able to obtain copies of any enforcement letters and specifically those letters that may have been sent to your neighbors. 

The impression that the "association is not doing anything" could be a wrong impression. Just because a violation letter is sent out or fines being assessed against a homeowner's account does not mean that the homeowner will become compliant. There are hard-core homeowners who just don't want to abide by the association's rules. It could also be the case where the association is doing absolutely nothing, which could be ascertained by the staff upon reviewing the response and documentation from the association in reply to a formal complaint.

As to the towing of cars, even for private communities, the association cannot just tag and tow a vehicle and or motor home. There are very specific state regulations that need to be followed.  Here is a case where the association may be fining the homeowner for the motor home parking violation.

Could the association send a letter to the homeowner whose landscaping debris is being blown into your yard? The answer is yes.

Barbara Holland, CPM, and Supervisory CAM, is president of H&L Realty and Management Co. To ask her a question, e-mail support@hlrealty.com.