By Robert Holloway
Homeowner associations are probably here to stay and in many cases it is almost impossible to find an upscale home that is not in an association. So this site will be directed to those who find that they must live in an area controlled by an association. I plan to provide some ammunition also, for those who are being abused by a dictatorial board or poorly trained "Community Managers". Because Community Managers in Nevada are required to have training consisting of only a few days, the poorly trained manager is a often a major cause of problems in community associations.
Since this site is designed especially with Nevada homeowners in mind, I am especially interested in instances of questionable activity involving some of the individuals with whom I have had conflicts in my association. These include attorneys John Leach and William Paul Wright and community manager Laury Phelps of Taylor Management. You might wonder why I am interested in these individuals. One of these attorneys drafted and one defended provisions in the governing documents that appear to be an attempt to circumvent state law in regard to foreclosures. Laury Phelps of Taylor Management attempted to intimidate me to stop circulation of a newsletter and also conducted closed meetings of the board which seem to be contrary to state law. She called them "workshops" and the effect of these workshops was to make the public board meetings merely ceremonial and to rubber stamp decisions made in the workshops. The intent of Nevada law is to require boards to open all meetings to unit owners with the exception of executive session which are limited by law to only a few topics. Any information along these lines would be welcome.
After having studied NRS Chapter 116 in considerable depth over the past year, I have found that there are several useful provisions in that law and also in the administrative rules that carry out the intent of the Nevada Revised Statutes. Listed below are some of the important principles that I have used in my interaction with a rather incompetent board (and many HOA boards are incompetent). Nevada has a very good set of laws governing homeowner associations. These laws, if fairly enforced, allow a homeowner to bring abusive boards and community managers to justice at reasonable cost. The most costly part of the process is the time and effort that must be expended in learning the various regulations. But the state government has given us the tools for very effective defense against out of control boards and community managers.
1. The Board cannot legally act outside the scope of the governing documents. (See NAC 116.405) This fairly new rule is likely to be one of the most powerful tools for stopping abusive practices. My board has a history of acting without regard to the governing documents.
2. In case of conflict between the HOA governing documents and state or federal law, state or federal law trumps the HOA documents.
3. NRS Chapter 116 has a number of very specific requirements related to HOA meetings, records and financial affairs. Quite often boards and community managers are not well acquainted with these requirements.
4. Chapter 116 provides various mechanisms by which abuses by boards and community managers can be corrected.
5. Meetings of the Board - State law requires that all meetings of the executive board be open to all homeowners, with the sole exception that executive sessions can be held on a small and specific list of issues. Board meetings that are closed to homeowners allow boards to make decisions without input or discussion from the other homeowners and without scrutiny. Sometimes boards have closed meetings under the guise of informal 'workshops" or some similar name. In my opinion, meetings that are closed to homeowers are illegal and contrary to the requirements of Chapter 116.
Recently, our community manager, Laury Phelps, held such a meeting that was not advertised to those not on the board. This was called a "workshop" perhaps in attempt to avoid the watchful eyes of unit owners not on the board. If the issue were pressed, it is highly unlikely that this sort of meeting would be deemed to be in accordance with NRS Chapter 116. Apparently the legality of this type of informal meeting has never been tested in the context of Nevada HOAs. However, identical situations have been contested many times in connection with the open meeting laws of various states. Almost invariably, an informal meeting of a board or commission is deemed to be subject to the same rules that govern a formal meeting, namely, that the meeting should be open and that advance notice should be given.
If anyone notices that their board members have very little to discuss during an advertised meeting and you notice that the meeting has more a ceremonial atmosphere than vigorous discussion, then most likely your board is meeting secretly, contrary to the requirements of Nevada Revised Statutes Chapter 116.
6. Special Individual Assessments - Nevada law is specfic on the issue of foreclosure. With a few minor exceptions, foreclosure by an association is permitted only in instances of failure to pay assessments. Assessments are defined as the basic membership dues of an association. Another type of payment that can sometimes be demanded of a homeowner is in the category of fines and penalties for failure to adhere to the governing documents in matters such as landscaping and similar minor violations of the governing documents. For the most common types of fines and penalties, state law forbids foreclosure based on fines and penalties. There are some minor exceptions to this but this is true in the vast majority of cases. It was apparently the intent of the lawmakers to allow foreclosure (by an Association) only in the case of fairly serious lapses by a homeowner and not allow the loss of a home based on trivial landscaping issues. In spite of this prohibition in the law, a few people, including attorneys and management companies and boards, are attempting to negate the force of state law by a simple redefinition of terms. They are attempting to include in the governing documents, clauses that redefine all fines and penalities as "Special Individual Assessments" apparently in the hope that foreclosure for this new category of financial penality will be permitted. In my view this is a sleezy mechanism that probably will eventually fail in court, although it seems not to have been tested yet. I am interested in hearing of other instances of Special Individual Assessments in Nevada.
I am also interested in hearing of other instances of informal board meetings in Nevada associations where there is no notification to all unit owners. In the case of this association, the board has agreed to avoid such "workshops" in the future, under pressure from me. The board simply has run out of money to defend their often questionable actions. What I have found is that this board, if they believe they have the upper hand, cannot be swayed from an improper action unless they are confronted with superior force. In this case, the superior force is the knowledge that I will certainly contest the issue and that I have been successful in several past contests.
I am interested in hearing about other problems in homeower associations, in particular situations involving some of the people and organizations mentioned on this site. These include Patricia Taylor and Laury Phelps, both of Taylor Association Management and attorneys John Leach and William Paul Wright (Wright is with Angius and Terry law firm). These individuals, in my opinion, do not have a proper respect for state law and for individual homeowners in relation to homeowner associations. However, the increasing restrictions on boards and management associations offer good propects for bringing them into compliance and forcing them to have more respect for the rights of individual homeowners.
By banding together and sharing information, a great deal can be done to stop dictatorial boards and incompetent community managers. For questions or comments, use the email address inside the following brackets: [robert.holloway@ntanet.net]. The brackets are put on to prevent automatic harvesting of the email address.