HOA board protection doesn’t extend to cases of malfeasance
Q: I do read and enjoy your column in the R-J every week and I would like to ask a question about my homeowners association board of directors' actions.
I know that there is a clause in the covenants, conditions and restrictions that gives immunity for actions that are in good faith taken by the HOA. However, is this immunity also granted for acts of willful malfeasance?
Thank you for any help that you may be able to provide in this matter.
A: Most insurance companies will defend the members of an association when a lawsuit has been filed claiming that the association failed to act in good faith. But the insurance companies will send a letter of reservation that they have the right not to pay for any damages awarded to the plaintiff if the courts find that the association's act was one of malfeasance.
Q: I have a question about your column on recalling HOA board members. What if the community's bylaws state a majority of the voting membership must vote affirmative. Would that then be 51 percent of the total memberships?
A: First, a comment. You no longer can nominate directors from the floor of an annual meeting because the law requires that candidates for the board must first complete a disclosure statement per Nevada Revised Statutes 116.31034 subsection 8.
The candidate must make a good-faith effort to disclose any business, financial, professional or personal relationships or interests that would result, or appear to result, in a potential conflict of interest if elected. The second part of the disclosure is that the candidate states that he or she is a member in good standing.
As to the removal of directors, state law supersedes your governing documents. NRS 116.31036 has two parts. The number of votes cast in favor of removal constitutes at least 35 percent of the total number of voting members of the homeowners association and at least a majority of all votes cast in that removal election.
Secret written ballots for the removal election must be sent to the homeowners not less than 15 days or more than 60 days after the date on which the recall petition is received.
The board sets a meeting date on which the secret written ballots will be opened not less than 15 days or more than 90 days after the date the petition is received.
On a personal note, I would like to say I'm back at my desk typing replies to my readers' questions after this past weekend's surgery. Thanks to my surgeon, Dr. Jonathan Sorelle of the Minimally Invasive Hand Institute, the growth in my right arm has now been removed. No cancer.
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.
