Spouses cannot serve on HOA board at the same time
Q: My wife is currently serving on the homeowners association board (1,500 houses) and I’m considering running for the board. Is there an ethical, legal or moral issue that would prevent me from running and serving on the board with my wife also on the board?
A: You would not be able to serve on the board at the same time your wife is serving, per Nevada Revised Statute 116.31034 (10)(a)(1).
Q: I am a member of two HOAs. One collected a capitalization fee once on each lot sold as the new community was marketed, and that was the end of it. At the Henderson community a capitalization fee is collected every time a house is sold. Regardless of how many times the capitalization fee has been collected. Please comment on this.
A: You would need to review your covenants, conditions and restrictions as many associations have an ongoing capitalization fee with each sale of a home. The capitalization fees for these associations replenish the reserves. It does help to lessen somewhat the financial burden of the existing homeowners who fund the reserves through their monthly assessments.
In addition, think of the capitalization fee in this manner. Let’s assume that you have been a homeowner for seven years and each year part of your assessments is deposited into the reserve account. On the seventh year, let’s say that your association has used a substantial amount of reserve funds and made major renovations to your community. I now move into your community on the seventh year and benefit from these improvements. The capitalization fee that you are charging me will help to replenish these funds.
Note: You may or may not be aware of an April memorandum that was written by the Nevada State Board of Architecture, Interior Design and Residential Design concerning association design review committees.
The memorandum states that there are potential conflicts of interest with the architects or residential designers who are members of your design review committees. The state board does recognize the value of these committee members as their professional knowledge and perspective are valuable to both the association and the residents.
The memorandum listed some potential conflicts which include the following:
■ An architect or residential designer serving on the review committee should not review his or her plans and should abstain from participating in the deliberations regarding their plans. In addition, they should not deny another design’s project in hopes of “poaching” the client and obtaining the project themselves.
■ An architect or residential designer should not review plans that affect the property if he or she cannot remain impartial. “The design professional could have a conflict of interest if the outcome of the decision will affect the value of his or her personal property. In cases like this, if the design professional desires to participate despite his or her interest in the outcome, he or she must disclose the potential conflict and obtain written waivers from all parties in order to participate in the deliberations,” the memorandum said.
■ An architect or a residential designer should not review plans if his or her judgment may be affected by the relationship with the design professional whose designs are under consideration.
For more information, you may contact the state board at 702-486-7300 or nsbaidrd@nsbaidrd.nv.gov.
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.