December 23, 2021 - 3:10 pm
Q: We have a new management company and two new members to the board and a myriad of problems and questions have come up. Our complex is on the east side and has 18 building with a total of 176 units.
1. One of the new elected board members does not use either email and does not text. She says that she only communicates by phone and it seems like she cannot perform any board member function. She also has a problem with walking, which makes it (hard) for her to assist with any problem on the property. If she cannot perform board functions, would that disqualify her from being on the board. She also advised the new management company that she would give the other new board member her approval/disapproval that needs her vote by having the other new board member add her vote to his email. Again, she does not email or text.
2. The new management company has sent two “Petitions to Remove” naming the two board members that have served the longest. The document cites: “Failing to carry out fiduciary duties as a board member,” and contains innuendo but no facts or documentation of wrong doing. It did include a list of 18 signatures they obtained and the management company said that only 10 percent of the owners need to sign the petition. I would assume a majority would be needed to actually remove the board member.
There have been a few incidents with the management company that I thought were questionable, but not 100 percent sure, but that may be another issue. My feelings are that the new management company wants to work with the new board members and eliminate the previous board, which would give them more control over the property. Again, that is just my opinion as I have nothing I can show as fact. We have had this management company only a couple of months and I think we should have done a little more research before hiring them.
My reason for contacting you is to ask if you could tell me which state and/or Nevada Revised Statute statutes would pertain to all of this. The other reason, is that I have gained some insight on homeowners associations with the Las Vegas Review-Journal column you write. I have only been a board member for a year or so and I am trying to educate myself on the in’s and out’s of being on a board. I have taken several classes and I am looking into taking some more as soon as possible. I do have some real estate knowledge from my residence in Arizona, but no two states have the same laws.
A: I will address each question separately.
As for the first topic, I would assume that if you are serving on a board that you would be prepared to participate in various board functions. Unfortunately, that is often not the case.
As for your question, whether she is qualified or not is a decision that the homeowners must make as to her being removed from the board or by not re-electing her. By statute, the board does not have the authority to remove this board member. As to having her name to be added to an email of another director either approving or disapproving, the association would need specific documentation that shows her vote that she gave to the board member. This is not a good practice and it really should be discouraged as disputes can arise later on as to her vote.
As to your second question, by law, a board member can be removed for any reason and, technically, no reason need be given. As to the petition, the law requires 10 percent of the unit owners to sign the petition, per NRS 116.3108. Now, the petition does not remove the directors. The purpose of the petition is to have the board send a recall meeting at which time, homeowners would have received a secret recall ballot (similar to the election process).
NRS 116.31036 addresses the removal process. The law has two requirements. The first is that at least 35 percent of the total number of voting members submit their ballots.
Second, assuming that the association met the first requirement of the 35 percent, at least a majority of all the votes cast voted to remove the directors. Both requirements must be met in order to remove directors.
Q: I was hoping that you could help me understand how our HOA is implementing a new short-term rental policy. I want to give you some quick history on our situation. We live in Incline Village in a condominium complex in which the covenants, conditions and restrictions have always permitted short-term rentals. Over the past several years, the HOA board has expressed concern about the impact (these rentals) have on the property. The board recently sent out a new policy, which was written and approve in executive sessions with no input or vote by the homeowners.
1. Is it appropriate for the HOA board to have written and approved a new policy that limits these short-term rentals without a homeowner vote since the CC&Rs allow them?
2. The new (policy) notes that using your home as a short-term rental is considered a commercial use, but the Washoe County website on short-term rentals classified such use as residential use? Which one is correct?
3. Do you know if the HOA board can meet and discuss a short-term rental policy in executive session since it is not on the four topics that can be discussed in executive session under NRS 116 sections?
4. The new policy requires that the fire department do a home inspection and submit the inspection report as part of the HOA short-term rental permit process. The local fire district has been contacted and will not support or complete such inspections. Since the new policy has such sections that cannot be completed does that mean the policy needs to be modified or is it considered void because of these incorrect statement and requirements.
Thank you for reviewing my questions and I hope to hear back from you soon.
A: I will tackle each question individually.
First, rules and regulations must be consistent with the CC&Rs of your association. Any changes proposed by the board of directors must be noticed as an agenda item to be discussed and voted upon by the board before the changes can be implemented. Under NRS 116.12065 , if any change is made, the association shall deliver a copy of that change within 30 days from the adoption of the new rule to the homeowners.
You are correct that normally any amended change to the CC&Rs are to be voted upon by the homeowners in order to be approved. Depending upon the language of the new policy, it could be possible the change made by the board of directors clarified the CC&Rs and would be consistent.
You did not send me a copy of the CC&RS nor of the new policy, but based upon the your last comment and question, it appears that the association is requiring a home inspection report as part of their application policy. In this case, without any further documents, the policy change did not prohibit short-term rentals, but just added a process for inspections.
As to the second question, technically, both would be correct. The county has its own regulations pertaining to short-term rentals separate from the association’s regulations. The association can have stricter restrictions than the county. The association cannot have restrictions less than the county.
As to the third question, the changing of any rules and regulations must be discussed and voted upon at an open board meeting. It should not be discussed at the board’s executive session, which by law is restricted to specific topics.
Finally, the fourth question pertaining to the fire department. If the policy is explicit that the fire department must do a home inspection, it would need to be modified as there are professional home inspectors who could perform and submit an inspection report.
Barbara Holland is an author and educator on real estate management. Questions may be sent to email@example.com.