Proposed HOA bills draw mixed reviews from columnist

NOTE: There will be a Southern Nevada Health District meeting on the Virginia Graeme Baker Pool and Spa Safety Act today from 9 a.m. to noon. at the Ravenholt Public Health Center, 625 Shadow Lane. For those of you who missed the March 18 meeting, you must go to this one. It is very informative and explains the additional requirements of the federal law, which requires pools and spas to be refitted with new drainage systems for safety concerns. Communities risk hefty federal fines if they open their pools and spas this summer without having the work done.

This Saturday I'm taking another break from homeowners association questions to address new bills to be presented to this legislative session. There are three -- assembly bill 251, senate bill 183 and SB 182.

In short, I support AB 251 and think it should live; SB 182 needs to be killed; and SB 183 need some work or it should be killed.

As of press time all three bills are still in the Judiciary Committee.

I can only cover a few highlights of the proposed laws. If you would like a more detailed breakdown of them, which includes my opinion, e-mail me at support@hlrealty.com. Also, if you would like to voice your opinion to our lawmakers, visit leg.state.nv.us/75th2009/Legislators/Senators/slist.cfm or leg.state.nv.us/75th2009/Legislators/Assembly/alist.cfm. Rather long addresses, but they will get you right where you want to go.

Let's start with what I like, AB 251.

Each year, thousands of dollars are wasted on labor, paper, envelopes and stamps to send out ballots when no one is running for re-election other than the current board of directors. This bill would save much money and waste by eliminating this requirement.

Now, on to what I don't like.

Unfortunately, many of the bad ideas in AB 396, which Gov. Jim Gibbons vetoed in the 2007 legislative session, have been reincarnated in Sen. Mike Schneider's, D-Las Vegas, SB 182 and SB 183.

Let's start with the bill that should certainly die -- SB 182.

*NRS 116.3103 subsection 3 would state that the executive board may not waive or refuse to enforce any provisions of the governing documents. Now this sounds great on paper, after all the rules and regulations should be enforced. But this doesn't give the associations much room for variances to work with homeowners.

For example, right now many homeowners have not completed the landscape for their backyards. Their original covenants could state that they had six months to a year to have them completed. The common sense thing to do would be to let the associations have the authority to extend that period to allow the homeowners to catch up on their finances.

Other examples of variances that would be useful in these tough economic times when lots of people are losing their jobs would be payment plans for homeowners that are behind in their association dues and are in danger of being foreclosed upon by the HOA.

Another good temporary variance that would relieve pressure upon homeowners would be to allow them to rent or lease their homes.

The legislature has to stop micromanaging associations. If individual associations flagrantly ignore the enforcement of their governing documents, homeowners do have options such as recalls, elections of new directors, ombudsman intervention and arbitration/mediation.

*NRS 116.310305 subsection 3 deals with construction penalty fines. Say you bought a vacant lot and were required to build a home on it in a year. If you did not, the association would impose a penalty, which is different than a violation fine. An appeal would automatically occur and the issue would be sent to the Commission for Common-Interest Communities and Condominium Hotels. The decision by the association would be stayed until the commission, after reviewing the appeal, made a decision.

This same language is essentially repeated in another section of this bill under NRS 116.31031 subsection 6. It provides for a fine for causing imminent threat of causing a substantial adverse effect on the health, safety or welfare of the community.

This is overkill. It would be costly to enforce and create a need for additional staffers to deal with complaints about everything from incomplete homes to domestic violence to green, slimy ponds in bank-owned homes.

It would absolutely require an increase in the $3 per unit per year fee from associations that are now facing a severe economic crisis from the non-payment of assessments from delinquent and foreclosed homeowners and lending institutions. This is a nonissue and does not need to be legislated.

If homeowners feel they have been unfairly fined by the HOAs let them file their complaint with the ombudsman in the Real Estate Division.

*For those homeowners who have issues with renters, the proposed changes to fining an owner who has a renter has been greatly watered down by this bill.

An owner could not be fined for a violation caused by his or her tenant or guest unless the unit owner (now get this) participated in or authorized the violation (let's face it, half of the owners do not even live in our state) or had prior notice of the violation. The law already requires the owner be notified of the violation and he or she has an opportunity for a board hearing.

The bill continues to state an owner can only be fined if he or she had an opportunity to stop the violation and failed to do so (since most owners who are investors do not live on property this section is just ludicrous).

There are many other proposed changes in this bill that I do not believe are necessary and will raise HOA fees throughout the valley.

SB 183 is a near dead ringer for AB 396 and includes many of the same topics that I have discussed at great length in previous columns. There are some sections that can be applauded and others that either need to be eliminated or significantly reworded. If such changes cannot be agreed upon, then the entire bill should be defeated.

Some highlights include:

*Section 3 of the proposed bill would require a member of the board who stands to gain any personal profit or compensation of any kind from a matter before the board shall disclose his or her conflict of interest and abstain from voting on the matter. There is an exception to this rule and that is if board member is an employee of the home builder. I believe this is an appropriate change.

*Section 27 is the section that kills this bill for me.

Simply stated, this part of the bill would allow a homeowner to redeem his or her home within 120 days after it was sold as a foreclosure.

The original homeowner would have to meet a lot of requirements, such as repaying the sales price and taxes to the new owner, and the process would take place before the title was transferred to the new purchaser.

This sounds to be fair but there are lots of problems. For example, how many prospective buyers could afford to wait 120 days to see if they have title of the home? Also, would the new owner be reimbursed for home improvements?

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 e-mail at support@hlrealty.com.