By Robert Holloway
This page offers some tips in how to fight back if your board or management company has abused your rights. One of the first things to note is that the state has provided some very good laws with which to counter boards or community managers who exceed their authority, something that often happens. These rules and regulations are available on the Internet. Unfortunately the website of the Real Estate Division does a very poor job of explaining the rights that you have. There is some useful information there but the Ombudsman's office would be well advised to revamp its website to provide a clear explanation of how to proceed. What are the methods available to the homeowner to correct an injustice? There is no clear explanation of that, or even an unclear explanation on the State website. Here is a link to that office. The state could remedy that with a few hours work on their website. How about it, Ombudsman?
The first thing to keep in mind is that you can successfully regain your rights if you have actually been abused. But before starting, ask yourself some honest questions. The first is this: have you truly been abused or taken advantage of by the board? Did they violate the association rules or state law? Remember that the board does have some rights to impose rules and regulations and that sometimes they are exercising their obligations properly.
Your chances of success are greatly increased if the abuse is so obvious that it would be seen as such by an impartial referee. Try to view the situation as it would be seen by someone without a direct interest in the outcome. In arbitration that is exactly what will happen. The case will be decided, hopefully, by an objective and impartial arbitrator. Most of the time, the arbitrator will be an attorney and you will have some choice in the selection. This is important because an attorney will normally base the decision on legal principles, which is quite helpful if the opposition has violated the law or the governing documents (as they often do). Look carefully at the qualifications of the attorney and especially whether or not they have a history of representing the industry. And make no mistake, there is such a thing as a management industry and their interests are not identical to yours. A history of representing boards and community managers may mean that they will not represent an owner to the best of their ability.
My experience is that you can almost always assume a considerable amount of incompetence by both the board and the community manager. Look for that, study what they have done in comparison with state and local law and take advantage of their mistakes, if you feel that your rights have been abused. Not long ago I got a call from an unemployed community manager. She had noticed this website and was talking to me in the hope that I might be able to help her get a job as community manager. I had no job to give but in talking to her, I could see that she was not the sort of person who would make a good community manager. Instead it seemed to me that she did not have the diplomatic skills that the job requires nor an adequate knowledge of the law pertaining to associations. Rather she came across as having the personality of a Marine drill instructor. But somehow she managed to pass the state exam and on paper at least was qualified to be a community manager. I suspect though, that her personality was the reason why she was unemployed. Unfortunately, there may be a good many like her who are community managers.
A recent instance in Las Vegas clearly is an example of how often incompetence plays a role. A homeowner got a bill recently from his association. It included a $100 fine for speeding that the owner knew nothing about. The fine was imposed because someone in the association used a radar gun to clock a pizza delivery man delivering a pizza to the owner's residence. As pizza drivers often do, he probably was driving too fast. But it goes against common sense and a thousand years of legal history to impose a fine on someone who did not commit the offense. Now the state legislature is considering a bill to outlaw the use of radar guns by associations. But consider that this fine must have been approved by a board of several people - apparently lacking in common sense and any grasp of legal principles. Unfortunately similar things happen quite often in associations. The board often assumes that the community manager understands what the law allows but with only 60 hours of required training, the community manager often knows very little about what is permitted by the various laws on the subject. The poor training of both boards and community managers is probably the most common cause of mistakes.
The methods of fighting back can be broken down into two categories as follows:
1. Work within the organization of the association
On simple matters you may be able to talk to the board members and resolve difficulties. However, I have always refused to attend hearings on minor violations as a matter of principle. The reason is that this puts the owner in an inferior position that really is not necessary for minor violations such as landscaping disagreements. I know of one owner who had to lose a day's pay because he felt obligated to attend a hearing over some minor violation that should never been the subject of a hearing in the first place. The accusation was not true in the first place. I am acquainted with the particular community manager in his case and I believe she simply enjoys putting a home owner on the dock, so to speak.
In the case of a serious problem, state law allows association members to remove members of the board by means of a recall election. If you want to attempt that, study NRS Chapter 116 very carefully as well as the association governing documents. State law requires that the governing documents have detailed rules for elections. This may be the quickest remedy for cases of extreme abuse where many residents are upset with the board. This requires a majority vote in the election and 35 percent of the unit owners.
I decided to publish a newsletter for residents of the association. At first it was met with a considerable amount of hostility. But after several issues and after several serious mistakes by the board, the newsletter has had a very substantial influence. In considering whether or not to do this, remember that federal and state laws make it very difficult to successfully sue anyone for libel. The laws tilt very heavily toward free speech and freedom of the press. Information is the key to correcting many of the wrongs of associations. My board attempted to try to intimidate me into stopping the newsletter but they were not successful. I simply used that attempt against them.
2. Use the various mechanisms provided by the State Real Estate Office for outside intervention
The most common method is to file an Affidavit of Intervention with the Ombudsman's Office. This is the first step towards the Alternate Dispute Resolution Process. This process can involve either arbitration or mediation. I don't know exactly how these two methods differ and have used only the arbitration process. The owner has considerable influence on this process and it basically involves a hearing that is similar to a trial in which both sides present their case and the decision is made by the arbitrator. The losing side may have to pay all expenses. Naturally the homeowner should be very careful to have a good case before going this route. This can be done with or without an attorney.
If there is evidence of misconduct by either the board or the community manager, the State Real Estate Division has an obligation to investigate. It is not clear to me exactly who conducts this investigation. Unit owners considering filing a complaint on the grounds of misconduct should study carefully NAC 116 as well as NRS 116. There are specific definitions of misconduct given in NAC 116. Boards and community managers are required to abide by state law and failure to do so can be considered misconduct. In addition, there are several other actions that can be considered misconduct. If this route is followed, the decision is given by the Real Estate Division and the owner has less participation in the process compared to arbitration. Nevertheless, it may be the most appropriate route in some cases. For instance if the community manager is not following the regulations on board meetings, this would be more of a misconduct issue than a personal issue that hurts the individual owner. The exact procedures are murky to the outsider and not very well explained on the state website. This may be due in part to the fact that the laws and mechanisms are quite new.
One final tip - There are three things most important when challenging the HOA system. They are (1) Document (2) Document and (3) Document. If you have no facts to present, you will likely lose. Your opinion is usually not as important as the facts. I suggest that in any significant written communication with the board or the manager, you should send it by certified mail, with return receipt requested. This is the first thing that the state requires in order to proceed with the Alternate Dispute Resolution Process.
4. What about lawsuits?
You must first use the Alternate Dispute Resolution Process.
It is possible to sue eventually and certainly a small claims suit can be considered. But the law requires that the alternate dispute resolution process be used first before you can file suit. This apparently was put in place because the courts were being overwhelmed by the number of lawsuits involving associations. Normally the resolution process that is available in state law will make an actual lawsuit not necessary.