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Management company did not pay HOA water bills

Note: The Nevada Real Estate Division issued a statement about Senate Bill 186, which addresses how HOAs communicate with their homeowners. The changes went into place Oct. 1.

By allowing for email to be the default means of communication for certain correspondence, the goal of the bill was to make methods of communication more efficient and less expensive for homeowners and associations. A review of the final bill language revealed inconsistencies with the conceptual amendment and legislative intent behind the change. The Legislative Counsel Bureau, under its statutory authority, will review SB186 in a manner consistent with the legislative intent and make necessary corrections before the language is codified under NRS 116.

To avoid any short-term fiscal, procedural and administrative costs associated with the application of the bill as it currently stands, the Nevada Real Estate Division will pause enforcement of section 1.7 of SB186 for 120 days or until certification of the revised statute.

The division, through the Ombudsman’s Office, will keep associations and homeowners informed and will provide additional guidance on the final revised statute when available.

Q: From April 2, 2020, to Oct. 5, 2020, the water bills for our homeowners association were not paid by our management company, which resulted in late fees. They also showed an extraordinary use of water during those months. The management company claims they never received bills for those months. The utility bills are automatically paid by the management company so the board had no knowledge of the situation until Nov. 3, 2020. When contacted, the Las Vegas Valley Water District stated their records showed the usage was taken from the meter and was correct. No explanation for why the property management did not receive the bills was given. One of our board members believes the management company should be held accountable for not taking action when water bills were not received.

This individual believes if we had known about the excessive water usage at the time, we could have taken immediate action to discover if there was a problem and correct it before it cost us an excessive amount. This person intends to personally take legal action (small claims court) against the management company claiming their negligence resulted in unnecessary late fees to the HOA. The board has not approved any such action at this time. Can this be done without involving the HOA board?

A: I do not believe that an individual homeowner, regardless if he or she is on the board, has the authority to sue the management company in this matter. I don’t think he or she has “legal standing.” The individual director should be pressing the board of directors to take action against the management company to resolve this matter.

Q: Thank you very much for your enlightening column every week. It’s a great addition to the Sunday R-J.

I am an owner and recently received an offer to refinance my unit through my bank at very favorable terms. I had planned to use this offer to upgrade my unit, etc. Unfortunately, after I submitted my application and went through the lengthy interview process my loan was denied by the lender, through no fault of my own, but rather based on questions emailed to the management company that my HOA has hired to manage the property.

The lender sent me an email stating: “Our review team asked if your HOA had deferred maintenance within the project that may negatively impact safety, structural soundness, habitability or functional use of the project as a whole or any individual unit.”

To which the owner of the management company replied: “There are some issues with the walkways on the second and third floors. The association is in the process of obtaining approval from the owners to obtain a loan to do all the work that has been put off over the years. We are hoping to begin the work by the end of the year as long as the homeowners vote accordingly.”

Firstly, the walkways to which management was referring had actually been updated fairly recently and that information was not disclosed. My impression is that the management company is holding my vote “hostage” to approve a large jumbo loan, which will result in an additional dues assessment for approximately the next 10 years. I am supportive of the property improvements, however, it seems unfair that the management company would obstruct current and potential future owners from obtaining financing to buy into our community. Any insight or advice is greatly appreciated.

A: Management companies are often faced with a “no-win scenario” when they have to answer this kind of question. They have a legal obligation to truthfully inform lenders and buyers when responding to the various questionnaires that they are required to complete. No management company wants to jeopardize the sale of homes within their community.

If there was additional information as you stated, the management company should have clarified its answer to your lender. I suggest you send a written response to the management company and the board, requesting that future responses concerning construction and capital improvements are clarified and/or approved by the board of directors. In addition, you should attend the next board meeting to address this issue under the second homeowner forum.

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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