I am taking another break this week from the regular Q&A format to discuss a homeowners association-related bill to be presented before the Legislature.
There are other bills before lawmakers this week that I support. For a complete list, e-mail me at firstname.lastname@example.org. Also, if you would like to voice your opinion to our lawmakers, visit leg.state.nv.us.
* AB 350 is a dangerous bill that would absolutely cause significant harm to homeowners associations valleywide. It is not a question of amending it. It needs to be killed. There are several sections in it that I have problems with, particularly sections 11 and 15. There are too many to list, but I have given a breakdown of a few.
Section 5 is very unrealistic. If the community consists of 50 or fewer units, no person may serve as a member of the board for more than two consecutive terms, and a period of six years must elapse before he or she can be on the board again. If anyone wants to know why some of these directors are the same people over a period of time, it is because that no one else is stepping up to the plate. If this proposed law passes, we in the community management profession will have a major problem.
Section 9 would not allow an association to charge late fees until the homeowner is 60 days delinquent and the interest on the late fees could not be more than 5 percent simple interest per year. Is this fair to the homeowner who pays his or her assessments on time? Many associations are trying to help their delinquent members with payment plans.
This section also would change how an association could levy any special assessments by requiring at least two-thirds vote of approval. This vote would be needed for repairs, replacement of major components, funding for the reserves and capital improvements. Then to further micromanage, the law would dictate how payments would be made. The payment plan range from $750 a month if the assessments is $750 or less $500 per month for assessments of $ 3,000 or more. The first payment is due within 120 days. Any special payments after 90 days would bear an interest of 3 percent per year.
This is ludicrous. The average association offers a better amortized plan.
Section 11 is even better. It totally prohibits an association from foreclosing for nonpayment of assessments. Does the state Legislature have a special “bail-out” funding for homeowners’ associations? Would you like to see an association become a blight area to the community real fast? Let’s all stop paying our assessments and save money since the association will have no means of collecting what we owe. Wait until you see all services begin to come to an end, from landscaping to paying the water bill.
If you thought Section 11 was wild, wait until you see Section 15, which states that in the resale package the association at its own expense would provide a presentation conducted in person or through the use of multimedia technology containing a description and summary of the governing documents. Where is this money to come from? This is not an inexpensive proposition — and its timing is outrageous.
Section 18 would change the administrative fines assessed against an owner, tenant, any board member, employee or agent of the association by the Commission for Common-Interest Communities and Condominium Hotels. For those associated with the board, the administrative fines could be as much as $6,000 total during any two-year period. If this person committed three violations within a two-year period, the fine could be $4,500 each with no cap for the amount of fines that could be imposed.
Finally, if the commission found in favor of the owner, the association would pay his or her attorney fees. If the commission found in favor of the association, the owner would not have to pay attorney fees unless the owner’s affidavit was filed in bad faith or for a vexatious purpose.
Barbara Holland, certified property manager, broker and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to Association Q.&A., P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759, or she can be reached by e-mail at email@example.com.