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HOA electric sign a waste of money

Q: I recently attended a homeowners association meeting for my community. A good part of our community has a brick wall separating us from neighboring apartments.

I brought up the possibility of putting some sort of bars on top of the walls to keep people from jumping the wall. We are not a gated community. The streets are public, but the crime maps in the newspaper show a lot more crime on the other side of that wall. I have seen bars on other communities.

I was told by the board members that the bars up would be a capital improvement and would require a vote by the homeowners to have this done. Also at that meeting, the board talked about installing an electric sign at the clubhouse that will notify the residents of upcoming events. The cost would be about $7,000 to $10,000.

Two of the board members tried to explain to me why the bars would be a capital improvement and the sign would not. I did not understand. Can you explain why the bars would be a capital improvement but the sign would not? And what is the difference for requiring homeowner ratification or not?

A: In either case, the funds for the bars or the signs cannot come from the reserve accounts as they are not listed on the reserve study. The funds must come from operations or a contingency account. As to whether the bars are capital improvements needing homeowner votes versus the electric sign, you would need to review your governing documents pertaining to architectural changes that require homeowner approval.

As to the bars, depending upon how your wall was constructed, it may not be strong enough to support them and it would require a permit from the city or county to install them.

Some associations have turned to specific type of landscaping against the walls to deter people from the jumping over the walls. Your association may want to look at that option. As to the electric sign, from a personal viewpoint, what a waste of homeowners’ money.

Q: We made two attempts to refinance an investment condo. Our credit scores are 800, and we have 80 years between us of never having missed a single bill payment of any kind. The first attempt, with one of the big banks, died on the day of closing. The bank claimed that the HOA didn’t have a large enough insurance policy, which turned out to be a lie. They only returned the application fee after my own investigation proved otherwise and I threatened to report them to the state banking authorities.

Last month our second attempt yielded the same result. On the day of closing the bank declined the loan, stating that the HOA required nine months of fees to be paid by the bank in case of foreclosure, but the Fannie Mae limits are six months. This bank’s statement seems to be true, and they will not return the application fee. The loan requested is a small one, around $100,000, and we are not underwater. The current mortgage is 5.875 percent, and though we know that rates are higher for an investment property, the rate we would have gotten was significantly less than the current one.

How can we get the HOA to revise that requirement? It seems absurd that people with poor credit, whose homes are worth less than they owe, are being helped, but we, with excellent credit and sterling histories, are mired in this rut.

Thanks for your column, and I sure would appreciate a response.

A: Thanks for your questions. I have never heard of a denial based upon the lack of sufficient insurance by the association. As to the requirement of six versus nine months, Nevada Revised Statute 116.3116 subsection 2c does specifically state that in some cases, depending upon the type of mortgage on the property, the association can only collect six months of past assessments. Someone needs to show this section of the law to that association’s board and management company.

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 email at support@hlrealty.com.

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