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Homeowner caught between two management companies

NOTE: The Las Vegas Chapter of the Institute of Real Estate Management and Southern Nevada Multi-Family Housing Association will sponsor a candidates’ night May 26 from 5 to 7 p.m. at the Greater Las Vegas Association of Realtors, located at 1750 E. Sahara Ave. Participants will be able to speak with the candidates individually. For more information, call Denise Razo at 878-0959 or e-mail her at iae@iremlv.org.

Q: On Aug. 12, 2008, my management company sent me a letter requesting a $75 lease administration fee and a copy of the lease agreement for the rental of my house.

This letter was forwarded to me by my tenants on Sept. 2, 2008. I mailed a check for $75, along with a copy of the lease agreement. The check was cashed on Sept. 11, 2008. The management company then assessed my account $50 per week for 23 weeks stating that it had no lease information during this time period and the fine was $50 per week until they had received the copy of the lease.

After assessing my account over $1,000, my account was turned over to collections where additional charges were assessed. Ultimately a lien and notice of default were levied against my property.

I was unaware of the assessments against my account until Feb. 13 when my February assessment check was returned to me by the management company with a note attached informing me that they were no longer the management company for the association. They returned the check to me at my current address (which is on the check and where I have lived since 2008).

The management company had the rental address in Las Vegas and my address in Hawaii and yet I never received any notifications of any violations, nor did I receive notice that our assessments increased from $132 to $142 per month, resulting in late fees being assessed.

I have been working with my attorney on this matter and he has been in communication with the collection agency. My credit rating has dropped. Can you help?

NOTE: The reader included a copy of the breakdown of what she believes that she owes the association, requesting that the lien and notice of default be immediately removed from her property.

A: The first warning sign for you was when the association used your mailing address for your Las Vegas rental unit for the first mailing on Sept. 2, 2008, when your tenants forwarded the lease violation letter to you.

At that time, you should have taken the extra steps to communicate to the association the correct mailing address in Hawaii.

It is the responsibility of the homeowners to inform the association of their mailing address.

Assuming that the management company had documentation that the warning letters were sent to your Las Vegas address, it would appear that your tenants failed to forward and send any additional correspondence to you.

For the future, you should have some clause in your lease agreement that would require tenants to forward your mail and you should give the tenants prepaid postage envelopes.

There are now two issues.

The association’s records should show that it did receive the lease administration fee, and if so, that there is a high probability that the previous management company did in fact lose the lease agreement.

All of the fines and late fees associated with the lease agreement violation should be waived. The second issues pertains to the increased association monthly fees and that you were unaware of the change. You would owe this money to the association.

The association has the ability to waive the late fees on the monthly assessments but you have now been charged fees from the collection company and the board has no authority to have collection fees be waived or reduced. Someone will have to pay them if the fees cannot be negotiated

You indicated that your check has had the correct mailing address but many associations and or management companies would not change your mailing address based upon the address on your check without explicit instructions.

Unless the association or management company has a policy of keeping a copy of the check in the owner’s file folder, the address of record would not change, nor would the community manager even know of your Hawaii address.

It is regrettable to hear that the previous management company returned your association fee check, as opposed to forwarding the check to the new management company, which is really the responsible procedure when there is a transfer of management.

The association should attempt to negotiate with the collection agency on your behalf to reduce your costs, since there appears to have been an error from the original management company. The association should assume some part of the cost from the collection company.

Barbara Holland, CPM, and Supervisory CAM, is president of H&L Realty and Management Co. To ask her a question, e-mail support@hlrealty.com. To view a power point presentation of the new laws that were recently passed affecting HOAs, visit hlrealty.com, click on press release button on the left side, then click on article title, “The 2009 Legislation for common interest communities.”

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