Columnist throws support to some HOA bills

I am taking another break this week from the regular Q&A format to discuss more homeowners association-related bills to be presented before the Legislature. I support all these bills and think they will be good for our communities.

For a complete breakdown on these bills, e-mail me at support@hlrealty.com. Also, if you would like to voice your opinion to our lawmakers, visit leg.state.nv.us.

*Assembly bill 311 needs our support. It modifies NRS 116.3144 by changing the requirement of audits from once every four years for associations with annual budgets of at least $150,000 to annual reviews conducted by a certified public accountant. The previous requirement of audits was overkill and caused a significant financial burden for associations. Reviews would absolutely note if there were abnormal issues with the association's finances.

* AB 204 would extend the maximum six-month back-assessment that could be tacked onto a new buyer or lender to two years. This would greatly help associations with a growing number of foreclosures that leave them with declining cash reserves.

Paying residents cannot keep supporting delinquent ones, which include banks that do not pay HOA dues while trying to sell the home. Many association fees have skyrocketed to cover required operating costs and contributions to the state-required reserves.

Assemblywoman Barbara Buckley has proposed an amendment that would severely limit the association's ability to recover collection costs. This would in essence negate the entire purpose of this bill. Her amendment needs to be defeated in order to maintain the integrity of this proposed legislation.

*AB 361 Section One requires lending institutions holding a security interest on the home provide the association with contact information, including the department that handles residential mortgages.

The first section also states that if an association is aware of a recorded mortgage default and has provided the unit owner with notice and an opportunity for a hearing per NRS 116.31031, the HOA may enter the grounds of the unit, whether it is vacant or occupied. The association can take steps to maintain the unit in accordance with the its governing documents.

This will reduce blight and deterioration, such as green, mosquito-filled swimming pools and spas, in communities.

Many associations have had some authority in their governing documents to take such actions but -- and this is the big but -- could not because of financial constraints. This proposed law states the cost of the maintenance, including inspection fees, notification and collection costs and interests be charged against the unit.

The association has a lien that can be placed upon the unit for these unpaid charges. In addition, it is to be treated as a coequal with the most recent lien on the unit. It is not subject to extinguishment by the sale of the unit because of nonpayment to the first lien holder.

In addition, a person who purchases or acquires the unit at a foreclosure sale, trustee sale or a foreclosure from an association shall maintain the exterior of the unit in accordance with the association's governing documents.

It is about time that we saw some real positive bills that will have significant financial and aesthetic impact on homeowner associations.

Homeowners, board members and management companies have been absolutely frustrated over the appearance and in many cases over the health issues caused by abandonment. These problems have been aggravated by lending institutions that ignore their responsibilities as owners.

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 support@hlrealty.com.