Commission says bill would make HOA service even more unlikely

Editor's note: Marilyn Brainard is one of seven governor-appointed commissioners who sits on the Nevada Commission for Common-Interest Communities and Condominium Hotels, which represents volunteer leaders and professionals involved with community associations.

AB 389 was introduced to the Assembly Judiciary Subcommittee April 1 in Carson City by the bill's sponsor, Assemblyman James Ohrenschall, D-Las Vegas.

The CIC Commission opposes the sections of the bill applicable to community associations. The following is some of the testimony that was submitted to the Legislature:

The CIC Commission respectfully takes exception to the inclusion of Nevada Common-Interest Communities under Nevada Revised Statutes Chapter 241, commonly referred to as the open meeting law.

Aside from the obvious legal distinctions between a public body and a private, nonprofit corporation, there are other definitions such as public bodies are supported in whole or in part by tax revenue. Certainly that cannot apply to common interest communities. The latter are solely supported by unit owners who are assessed to pay for common expenses.

Nevada is not the first state where legislatures have tried to bring community associations under open meeting laws or classify nonprofits as "public" entities by private law suits. Fortunately, these efforts have failed due to judicial rulings in favor of the associations, most prominently by the New Jersey Supreme Court in the Twin Rivers decision.

Frankly, the commissioners are alarmed at the safeguards for unit owners provided by NRS 116 that are seriously eroded by placing community associations under NRS 241. Sections 5 & 6 of AB 389 remove very extensive provisions that have developed over successive legislative sessions in response to claims that more protections were needed for homeowners in relation to their elected volunteer board members. AB 389 is, unfortunately, a significant step backwards when it comes to unit owners' rights.

The commission wishes to remind the subcommittee that we are very concerned that volunteers serving on their community association boards would become subject to civil and criminal liability and/or prosecution.

If many associations have had or continue to have challenges in filling their boards of directors with willing unit owners, as they tell us they have, by coming under the onus of these sections might effectively put many common interest communities into receivership. We fail to appreciate how this bill will assist our economic recovery by increasing home ownership. In fact, it will be another road block to creating and maintaining healthy, vibrant communities and neighborhoods.

The commission holds public Friday morning meetings to discuss upcoming bills in the Department of Business and Industry Building, 2501 E. Sahara Ave. Ste 303, in Las Vegas.