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Judge may have to decide if lease meets law

Q: I am a real estate broker and property manager. I follow your columns in the Las Vegas Review-Journal and was wondering if you can relate to my question.

One of my clients has a rental property with a Section 8 tenant. Initially, the tenant signed a one-year lease and thereafter requested to stay on a month-to-month basis.

That homeowners association considers this as a violation and the board does not allow a month-to-month even if the tenant started a 12-month lease…

Is this allowed?

A: This is such a fine line and obviously subject to interpretation from both sides. The purpose of the regulation was to avoid a hotel and motel rentals. Longer leases help maintain stability of the community. Your initial lease agreement fulfilled that requirement. It is not unusual for a tenant to either renew on a six-months lease or month-to-month agreement.

From the association’s position, you need to renew the lease for another one-year.

Who has the correct interpretation? A judge or an arbitrator will make that call. You can contact the Nevada Real Estate Division to find out the various alternatives you have to dispute the association’s ruling.

Q: Our sub-association is now requiring a $2,000 cash deposit with any landscape application. The majority of the board is still comprised of the builder’s representatives.

The homeowner’s check will be cashed and deposited into the homeowner’s account until all work is completed and reviewed. I have lived in many HOA communities in my 22 years in Las Vegas, and none have ever required such a hefty deposit to be held for anywhere from six to eight weeks (or longer) especially if you are installing a pool. The most any other community has required is a $500 deposit, and some of these are only held in escrow, not cashed.

Unfortunately, I do not have an extra $2,000 to give up for two-plus months. I finally found a reputable pool company (one of the top three in Las Vegas for well over 20 years) that is willing to put up a $2,000 bond for us. They do this for all their customers, and have had no problems with their HOAs. Again, unfortunately, my HOA states that they will not accept any bond. My question to my community manager was, “What difference does it make?” If the pool company is willing to put up a $2,000 bond as they have done in the past, and other HOAs have had no issues, why are they being so stubborn?

As an aside, the builder has already slurried streets before the community is completed. Homes are still under construction, and heavy equipment is running through the community daily. In fact, the streets already have ruts in them, and I predict there will be many more as there are still several more homes that need to be completed. Hopefully, the builder will re-slurry our private streets in the gated community before turning the HOA over to the homeowners. If street damage is the reasoning for a $2,000 deposit, how hypocritical is that?

My question is this: Can the builder-driven HOA require such a hefty deposit to be cashed and held for more than two months? Also, if a contractor or pool company is willing to put up a cash bond, shouldn’t they accept that?

A: The short answer is yes; the association’s regulations can require construction deposits. There are no NRS 116 laws that regulate the amount of the deposits or how a construction deposit can be in the form of a bond. I would agree that a performance bond is an acceptable alternative to a cash deposit. You should check the association’s governing documents to confirm that the requirement specifically states cash deposits. You may want to appear before the board to discuss this issue and suggest that the regulation be modified.

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 the Association Q&A, P.O. Box 7440, Las Vegas, NV 89125. Fax is 702-385-3759, email is support@hlrealty.com.

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