Many sections of AB 448 would make poor law

Editor's Note: Barbara Holland is taking a break from her question-and-answer format to address some upcoming bills the Legislature is considering in the next few weeks. This is the first column in a special three-part series.

Last Friday I testified before the Assembly Judiciary Committee on AB448. I would like to share some comments on this legislation. First off, there are too many sections that make for poor law. Some things proposed are already on the books. One particular section makes absolutely no sense and complicates the election of board members for associations with vacated positions. The best action to take on this bill is to let it die in committee.

• Page 5- Section 1 -- The first section allows the administrator to take action if he or she has reasonable cause to believe that a violation of Nevada Revised Statutes 116 is about to be committed. This could lead to a petition for a hearing with the state's Commission for Common-Interest Communities and Condominium Hotels.

The problem with this section is that it is totally unrealistic. The commission is so far behind in hearing actual complaints that it has no time to hear complaints of events that have yet to take place. Given the financial crisis, don't you think that its time could be better spent with actual issues and events? In addition, this proposed section does not take into consideration the wonderful work and accomplishments of the state's ombudsman's intervention program.

• Page 6-Section 2 - Subsection 2e -- Apparently, some owners complained that their association charged them for changing the exterior appearance of their unit or landscaping. A survey of management companies would show that this is abnormal and does not need to be a law. This is law by anecdote.

• Page 10- Section 3 -- More than one section in this proposed law violates the Federal Privacy Act, as well as privacy rights under NRS 116.31175 Subsection 1.b. This would allow a HOA member to have a copy of correspondence between a unit owner and the community manager. This should be deleted.

This section also allows an owner to have copies of records without being charged. What needs to be noted is that not all records are on computer. A homeowner may request copies of records that are in a storage facility. A staff member has to access those records and copy the information. Even state and local governments charge for copying certain records.

• Pages 10, 11, 12 -- This proposed law takes a simple process and makes it more complex, costly and actually takes the owners' rights backward.

Right now, if a board has vacant positions, most governing documents allow the board to appoint replacement directors to finish the term of the vacated position. In some cases, associations are required by their governing documents to call for an election.

The proposed law would first prohibit a board to appoint directors for vacated seats, if the board has less than a quorum of directors. This modification would not be much of an issue, as the current law requires the association to send out candidate applications. Homeowners who wished to serve on the board would have 30 days to complete the applications, and ballots would be sent to the homeowners who would need to return them in 15 days.

What the proposed bill states is as follows: The association would hold a meeting within 30 days for the purpose of conducting an election. The unit owners would be present either in person or by proxy. With proxies, membership would nominate candidates and elect directors by secret ballot.

The only major problem with this section is the proxies. It was the Legislature that eliminated voting to elect or recall directors with the use of proxies. Homeowner advocates sponsored the elimination of proxies in elections because they felt that the boards had advantages over homeowners in obtaining proxies and, therefore, would vote on members who they wanted to serve on the board.

This proposed law becomes more complicated when you turn to the top of page 12 section d1, d2, d2 (I) and d2 (II).

Without being impolite, I would challenge the drafters of the legislation to explain these sections, as they are a linguistic nightmare.

This section starts by stating that the election is for a 90-day period. Why? It should be for the unexpired term of the vacated seat. Instead, the proposed law states that if the next regular scheduled election is not for 180 days, the person who was just elected at the required meeting would serve the unexpired term.

If you continue to read the balance of the law, these three pages could be so easily condensed to state: "If there is no quorum on the board, the association will send out the candidate applications and follow the current procedure for the holding of elections."

Next week I'll talk more about this bill and others.

This is a summary of my analysis on the bill. For a complete copy, email support@hlrealty.com.

Barbara Holland, certified property manager, is president and owner of H&L Realty and Management Co. To ask her a question, email support@hlrealty.com.