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HOA board candidates must be homeowners in good standing

Q: My question is: If someone did not disclose if they are in good standing on their board candidate nomination form if that form is legal.

On his (the candidate’s) Facebook page someone asked him why he did not fill that part out. His answer was:

”As for my form not listing me as being in good standing, does anyone seriously believe I’m not in good standing? OMG, I forgot to fill in one line.”

He has taken that off his Facebook page. What he doesn’t like he takes down.

He also has sent in more than 62 complaints about our homeowners association board to the ombudsman Our HOA company and the board had to hire an attorney to handle all his complaints. The HOA has to pay for the lawyer. The fees are adding up. My question is if he got on the board wouldn’t that be a conflict of interest if the ombudsman comes back and asked a question about the complaints.

To understand all his complaints (you can) go on (his) Facebook. Please help us. We do not want him on the board. We live in a very nice neighborhood. He made his neighbor’s life a living hell with all his complaint about them.

A: Under NRS 116.31034 (4a and 4b), each candidate is to make a good faith effort to disclose any financial, business, professional or personal relationship or interest that would appear to be a potential conflict of interest if the candidate was elected to the board. In addition, the candidate is to disclose whether he or she is a member of good standings. The law defines a member of good standings to be one that does not owe any assessment and or construction penalties.

The law does not allow associations the right to refuse placing them on the ballot, or to even comment, even though the board may know that the candidate is not a member in good standing. If the candidate is elected, a complaint could be filed with the Nevada Real Estate Division if the candidate was not a member in good standing.

Under NRS 116.31031, a member of the board shall not participate in any hearing or cast any vote relating to a fine being imposed if the director has not paid all of the assessments due to the association. Completing the forms in its entirety and accurately is most important as the “penalty” for electing a director who is truly not in good standing only hurts the association when it comes to conducting hearings, especially for the three-person board.

Your association could talk to the candidate’s neighbor to determine whether his actions violate NRS 116.31184, which pertains to harassment. If so, you can file a complaint against him with the Nevada Real Estate Division. In addition, perhaps, your manager and board need to have a sit-down meeting with the ombudsman, especially if the complaints are truly frivolous.

Q: I thought I would give you an update on the landscaping. They went ahead and (revamped our) landscaping, saying it was to save water. Part of the new plants were trees, four per community.

Because of this our reserve funds are about 51 percent funded. The community manager stated that an assessment would be needed to bring the account up to state limits. She stated (it would need to be) about 75 percent funded. I asked her to show me where the state required this but she hasn’t got back to me and is no longer our manager. I have looked at the Nevada Revised Statutes and haven’t been able to find it. Do you know if the state requires a certain amount of funding? A prior manager stated if the fund got so low she would need to submit a letter to the ombudsman’s office.

A: There is no written percentage in NRS 116 pertaining to the minimum amount of money that should be in your reserves. The Nevada Real Estate Division would certainly want your association to be funded at least 75 percent.

The law allows an association to have a realistic funding program so that when the projects are due the association has the funds. Associations should try to fund the reserves as recommended by the reserve specialist.

As to a letter to the division, we actually have an annual form that has to be completed concerning reserves where an explanation and a game plan of what the association plans to initiate to rectify low reserve balances.

Q: Our HOA has decided to subject us to a special assessment. It turns out we have not had an adequate reserve since prior to 2005. Part of the assessment is to begin work on the pool and roofs and various other areas. I requested a list of vendors and the owners of the companies to ensure there is no conflict of interest with anyone on the staff. I was told under no uncertain terms that the owners of the companies would not be provided. I am not sure why that would be allowed under Nevada law as it is my money they are using.

I am also curious, what constitutes an adequate reserve? This has been a long time coming and in my opinion our HOA is failing to do its job properly if they wait over 10 years to engage in this activity.

A: Under NRS 116.31175 and NRS 116.3118, you are entitled to a list of the vendors that will be performing the reserve work at your community.

NRS 116.3115 states that the association is to establish adequate reserves, funded on a reasonable basis in order to make repairs, replace or restore the major components within the association. This law also states that an association can establish a funding plan if the funding plan is designed in an actuarially sound manner, which will ensure that sufficient money is available when the repair, replacement or restoration is needed.

Under NRS 116.31152, there is no “magic” number as to the necessary percentage of what constitutes adequate reserves. Instead, the law requires a reserve study every five years by a specialist that will determine the life cycle of the major components and determine the cost to replace or repair and when the work should be done.

In addition, the reserve study is to provide an estimate on a yearly basis of what funds should be in the reserve account based upon their analysis of the association’s major components.

You should obtain a copy of the reserve study from your association and especially the sections pertaining to the annual recommended reserve contribution and the recommended five-year planned expenditures.

Q: I have a HOA question for you that I hope you can help with.

In the new (used) house we moved to up north the original owner took out the recreational vehicle gate to put in an 8-foot gate. We want to install a 12-foot gate in that space and the HOA is asking that we get an engineering/contractor certification. Is this typical or required by NRS statutes?

A: It is not an NRS 116 law. I am assuming that the board wants the 12-foot gate certified by an engineer to insure that it will be sturdy enough and not fall down.

Barbara Holland is a certified property manager and holds the supervisory community manager certificate with the state of Nevada. She is an author and educator on real estate management. Questions may be sent to holland744o@gmail.com.

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