Sorry, you just can’t quit your HOA
Q: I stumbled across two articles of yours in the Las Vegas Review-Journal while researching a subject for my father. I’m hoping you might be a good resource to confirm something both my father and I remember hearing about in the last maybe three to six months.
We both recall seeing something in the news that (said) if you’re an original homeowner (who had) owned a home in a homeowners association for 20 to 25 years or more, that you can opt-out of your HOA. However, I’m unable to locate anything related to this. Does this subject sound familiar? If so, can you direct me to where I might find more details? I know I wasn’t dreaming this because we both remember hearing about it. I live in Las Vegas and he lives in Sparks.
I would appreciate it if you have a moment to let me know if this rings a bell. Thank you in advance!
A: Sorry, an individual homeowner cannot opt out of a homeowner association. Under Nevada Revised Statutes 116.2118, an association can be terminated, which is a complex process that requires the support of the membership.
Q: Thought I’d take a minute to let you know I enjoy your columns and have been reading since moving into my HOA community about four years ago. Because of various issues in the complex that were not being resolved and questions going unanswered, I ran and was elected to the board. Now, with visibility into the inner workings, I have a good idea of what has been going on (or rather not going on). As it stands now, it will be an interesting and likely challenging two years.
A: You took the plunge. Congratulations. If you need assistance, I’m happy to help.
Q: Is there a minimum number of homes in an HOA that would make them exempt from having to have a reserve study done?
I live in an HOA that was started in 1994. We have only 10 homes, and we follow NRS. We have had a reserve study done per NRS a few years back, and are following its schedule.
A homeowner has said that those rules applied to HOAs of 12 or more homes and that HOAs fewer than 12 are exempt.
Our covenants, conditions and restrictions say we need a reserve account, and we do have it. But there is no mention in our CC&Rs of having to have reserve study done.
So is our small HOA exempt from needing or following the reserve study recommendations?
A: Regardless of the state law, which does have some exemptions for smaller associations, the fact that your CC&Rs state that you need a reserve account would imply that you would need a reserve study. How else could you properly fund the reserves without a reserve study? Based upon your email, your association did have a reserve study. It is worth the cost. The purpose of the reserve study is to allow an association to properly fund for capital expenditures in order to avoid large special assessments.
It is also a marketing tool when selling your home as it informs a potential buyer as to the strength of your association based upon your finances and your reserve account balance in relationship to the reserve study.
Barbara Holland is an author and educator on real estate management. Questions may be sent to holland744o@gmail.com.