August 12, 2022 - 12:26 pm
Q: Does a homeowners association state law say that people who don’t vote on a referendum are counted as a yes vote? In our age-qualified community, only 10 percent voted on a recent critical issue. Our community has many very old people, who have no means or motivation to get involved in these votes. This law gives boards of directors unlimited power. This egregious law leads to board corruption. Do you agree?
A: There is no Nevada Revised Statutes 116 pertaining to this issue. Under NRS 295.00, state initiatives and referendums, if requirements have been made, are placed on a ballot for the voters to respond. You have to vote in order to be included in the tally. In addition, Robert’s Rules states that an abstention is neither a vote for the motion or against the motion.
Your association should not count a yes vote for homeowners who don’t vote.
If your association is stating that an abstention is automatically deemed as a yes, have them send you a copy of that law. I would like to see it. From my research, you don’t count as a yes vote for those owners who do not vote.
Q: My condo association has a severely underfunded reserve. The board has reached a point that there’s a lot of “can we afford that?” conversations during the recorded board meetings. Their contracted maintenance company stated on a recorded board meeting that they stopped doing their scheduled maintenance for several months because the board hadn’t paid them. The maintenance company also was hesitant to become fully staff to continue maintenance because of the fear of future unpaid bills and the board’s inability to give direction on project priorities and deadlines. During that recording, (later) I heard the board members “discussing” which projects were most urgent and whose project should take priority. The board members argued over sharing maintenance hours on projects because then projects take years to complete. One board member was angry because there was an identified safety hazard and the other board members wouldn’t acknowledge that it should be top priority because of legal liabilities of not fixing a known safety issue (for over six months).
Here is some history:
All the buildings’ exteriors are HOA common area, so the financial burden is great on the HOA. A few months ago, I heard a board member mention on a meeting recording that the buildings hadn’t been painted in 18 years! I’m shocked but they look shabby, so I shouldn’t be surprised. A few years ago, I asked the HOA board when they’d repaint the buildings and I was informed that it was “too expensive” and wouldn’t be done. I protested because it needed to be done, someday. But I was asked: “Do you know how much it costs to paint just one building?” My reply was: “It must be done eventually.”
I asked for the board to raise the annual assessment amount, but they said that some owners couldn’t afford an increase that would allow the HOA to cover the costs of maintenance.
I’m tired of worrying about what the board is doing. I just want to get myself in a legal position in which the HOA board’s actions don’t put me in a financial situation in which I end up owing more to the HOA than my property is worth and I can’t sell because mortgage companies won’t finance because of the condition of the HOA common areas. The board recently stated that the HOA insurance premiums went up $10,000 per year because the board did not properly maintain the buildings.
Would placing my condo under a LLC allow me to walk away from my property without further financial obligations created by the HOA board’s failure to maintain common areas? I own my condo outright. I pay all my taxes, HOA assessments and other related obligations. I feel that they’re steering the community into a future of great individual owner financial obligations to cover the delayed maintenance. I don’t fully understand how deep into monthly obligation the HOA might send us and it frightens me. What if the assessments go up from approximately $250 per month to $6,000 per month (absurdly large example to display my potential fear)? At that point, I wouldn’t be able to afford the monthly expenses and no one would buy my condo.
What should I do and am I worrying too much? Is an LLC the solution to living without fear of not being able to walk away in a break-even point if the HOA navigates into the iceberg on the horizon?
A: If you are that concerned about the liabilities of the association being passed onto the owners, you may want to sell your unit. As to an LLC protecting your personal assets beyond your unit, please consult your attorney.
Barbara Holland is an author and educator on real estate management. Questions may be sent to firstname.lastname@example.org.