HOA can require homeowners to buy extra insurance

Q: Can a homeowners association board require condo unit owners to obtain and carry HO-6 insurance policy?

A: Depending upon the association’s covenants, conditions and restrictions, yes, the association could require a homeowner in a condominium to obtain additional insurance. The CC&Rs would probably not specifically name a type of policy, such as the HO-6 policy, which is a supplement insurance policy to the association’s primary insurance policy.

Q: I am a homeowner in a local HOA and saw your article on speeding within an association’s property. But, I have a question for you. I realize that we are considered private property, but we all pay the same taxes to our police department — as those who don’t live in an HOA, but they get police monitoring, and we don’t. A lot of us feel that is unfair and being taxed for a service that we do not get. We need to start a process in Carson City next Legislature season to get what we pay for, need your help.

A: It is a known fact that associations that are either gated or that have roads that are private are “double-taxed” as the homeowner pays assessments as well as property taxes. The property tax dollars, which include multiple services, do not always include homeowners associations’ major expenditures on streets, lights and sidewalks, even though the county or city is responsible for these costs in other residential neighborhoods. You need to reach out to your representatives in the Senate and Assembly to discuss this financial issue. Being a financial issue, there would be significant hoops to jump through for this proposed bill to even be considered.

Q: Before we purchased a house in a local Pahrump HOA community in July 2016, we asked the real estate agent, the association manager and the seller (who was the secretary of the HOA board) if there were restrictions in the community for short-term vacation rental usage. All of them said there were no restrictions. Included in the CC&R package that we received for the property was a sheet of paper entitled, “Association Disclosure Form and Acknowledgment of Receipt of Documents,” among many other papers making changes to the CC&Rs. This sheet had the written statement. “Currently there are no restrictions related to leasing or rental of a unit,” which indicated that there had been actions by the board to that effect.

Therefore, we proceeded with the closing of the sale, purchasing furniture and appliances to fully furnish the house, making minor repairs and landscaping, purchasing insurances, etc., and joining a vacation rental servicing company to advertise the property, etc., to begin short-term rentals there.

The board has recently hired a professional management company out of Las Vegas, and they have published the first newsletter that we have received. In it there is a “friendly reminder” that states, “vacation rental property Airbnb is prohibited.”

Can the HOA just now arbitrarily decide that these short-term rentals are prohibited after we have spent considerable time and expense doing this? Wouldn’t the board have to discuss and make changes to the CC&Rs, and/or send it to a vote of the community? Wouldn’t our property be grandfathered in if we purchased it under the “no restrictions” clause? We have rented to some very nice people who have been very clean, considerate and have not used the property as a noisy party house. There have been no complaints to us of any problems. We do not know of any other properties in the HOA being used as short-term rentals.

Thank you for your information about this problem.

A: Assuming that the CC&Rs do not restrict the leasing or renting of a home, including Airbnb, the association cannot apply this new regulation, retroactively. If there were no restrictions at the time of purchase, you would be grandfathered in as to this prohibition.

The association board cannot pass such a regulation if the CC&Rs are silent on the topic as the board would have to initiate an amendment process to restrict rentals within their community.

Barbara Holland is a certified property manager, broker and supervisory certified association manager. Questions may be sent to holland744o@gmail.com