Community’s leasing restrictions difficult to enforce

The first is renters. If more than 20 percent of the homeowners are investors, what can be done to correct this issue?

The second is maintenance work. When we request it, our management tells us that they must see what is in the reserves. Does the reserve cover the maintenance? Our budget states that we have $37,000 per year to spend, and nothing has been done except swept around here, which is not a complete job. What are the jobs that maintenance does?

A: If the reader’s association has in its covenants a leasing restriction not to exceed 20 percent, then the association could send violation notices.

Unfortunately, this is not an easy restriction to enforce. First, it would require that the association keep accurate records. How would you know who to send violation notices to if you do not know which homeowners leased their homes after the 20 percent restriction had been reached? There is a potential problem that enforcement letters would be sent to the wrong homeowners.

Second, when the association receives notices of pending sales from the lenders, real estate licensees or escrow companies that request disclosure packages, does it have information about leasing restrictions and state that the limit has been reached? The purpose of the disclosure package is to allow a potential buyer to make a final decision as to whether the buyer wants to continue with the sales transaction. If the buyer is an investor, the investor would then be appropriately informed that he would not be able to lease the unit.

Finally, there has been at least one court case that has reached the Nevada State Supreme Court whereby a leasing restriction amendment was not valid. The reader’s association needs to contact their legal counsel to see if their covenant would possibly be considered invalid as a result of the Supreme Court case.

As to the issue of maintenance and reserve study, according to the state law, reserves are only to be used to repair, replace or restore the major components of the common elements (NRS116.31152).

Examples of major improvements would include roofs, parking lot asphalts, fences, security gate systems, swimming pools and spas, exterior stucco and painting of the buildings.

There are different classifications of maintenance. Routine refers to janitorial or street sweeping, servicing swimming pool and spa (cleaning and chemicals).

The second type of maintenance is emergency, such as a broken sprinkler head and pipe that is shooting water into the base of the building and flooding a homeowner’s unit. The third type of maintenance is deferred and has not been addressed.

Often, maintenance is delayed because of money. Often deferred maintenance becomes a reserve issue. An operator to a security gate system does not work properly. It really needs to be replaced (it then becomes a reserve expense) but the association is not repairing it.

As to your issue of maintenance for your condominium unit, you would first need to review the association’s governing documents to determine if the maintenance repairs are really your responsibility or that of the association.

If it is the association, you may find out that the association does not have the funds to make the repairs because of funding problems. In that case, you may have to notice the association and give them a deadline in which to make the repairs.

In that notice, you would inform the association that if you make the repairs, that you will hold the association responsible to reimburse you and would take appropriate legal action to be reimbursed if the association failed to pay you for the repairs.

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.