Law has requirements for executive sessions

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Q: Our association consists of 32 owners. Our board holds an executive session after each monthly meeting with no attorney present or informing the membership about the session. In my opinion, the board has developed into a clique. Unfortunately, most homeowners do not attend meetings so the board runs the association as they see fit. The executive session rules in NRS 116 appear quite clear and have been brought to the board's attention. They continue to ignore the requirements. Please clarify what is an executive session and how the homeowners should handle this situation.

A: According to NRS 116.31085 subsection 3, a board of directors may meet in executive session only to consult with the attorney of the association on matters relating to proposed or pending litigation, discuss the character, alleged misconduct, professional competence or physical or mental health of the community manager or employee of the association and discuss a violation of the governing documents including the failure to pay assessments. The board does not need an attorney present during the executive sessions. A board may not meet in executive session to open or consider bids for an association project and the board cannot enter into, renew or modify or terminate or take any other action regarding a contract.

NRS 116.31083 subsection 4 requires the association to notify the homeowners with the time and place of its executive meetings. In most cases, the executive meetings are held either before or after the board meeting.

You can file a formal complaint with the Ombudsman but you would need to be very specific as to decisions being made in executive session that should have occurred at the board of directors' meetings.

Q: We are a small homeowners association with a board of directors. We have been using a particular collection agency to collect past-due assessment fees and I believe their charges are outrageous. They charge the homeowners the same amount as is owed to the association. Is this legal?

A: The issue of the collection fees for delinquent homeowners has been a topic of conversation since the legislative session in 2009 and a lawsuit that had been filed against some of the collection companies and associations. The legislative session in 2009 authorized the Common Interest Communities and Hotel Condominiums Commission to hold hearings and to determine what fees would be acceptable and what would be considered excessive. As of this date, I have not seen any communication as to the resolution of fees from the commission.

There are two different ways that a collection company can operate. The first is to require the association to pay the collection costs during the foreclosure process. The second is the collection company advances the funds during the foreclosure process. Obviously, it is to the benefit of the association for the collection company to front the money as there is a time limit that could be more than one year before the collection cost is reimbursed either by the current owner or future owner.

The collection process is labor-intensive. In addition, the collection companies have no control over the fees that must be paid to the courts, recorder's office, newspapers (for publications), etc. Over the past legislative sessions, the legislators have added more steps in the foreclosure process, which adds to the collection costs. Finally, the collection companies must have good liability coverage that is not cheap in an atmosphere of lawsuits that exists in our society.

Having dealt with many collection companies, the company being used by your HOA has competitive fees when compared to the other companies.

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.