Looking further into new laws that affect HOAs

EDITOR'S NOTE: This is the second in a three-part series looking at how laws passed in this summer's state legislative session will affect local homeowner's associations.

Last week, we looked at seven recent laws that affect our Las Vegas communities. This week, we will look at

• SB 39 — Effective Oct. 1. Associations that were formed under Nevada Revised Statutes 82 or NRS 84 had been exempt from paying the state business license fee for years. For whatever reason, the Legislature forgot to include NRS 81, which is another nonprofit organization body of law. This new law now includes associations formed under NRS 81 to be exempt from the business license fee, which was $200 a year (under the new tax laws passed this legislative session, the fee has substantially increased).

• SB 483 — Effective Oct. 1. This law applies to only a few homeowner associations that have an operating budget of more than $4 million. You will need to meet with your certified public accountant or your attorney, as your association will not be exempt out of the gross income tax.

• AB 386 — Effective Oct. 1. This was a very important bill for most of the associations, especially in Southern Nevada, pertaining to squatters. Many readers sent in questions pertaining to squatters living within their communities, asking how they could be removed. The problem was that civil law was not in sync with criminal law. The new law establishes the criminal offenses of housebreaking, unlawful entry and unlawful re-entry. This new law does not cure all but it is a good start. The owner of the home has to file the complaint. The association cannot, which means in some cases, the association will have to hunt down the homeowner, some of whom have abandoned their homes and have left the state. If a complaint is filed, the police will be able to arrest the squatters. The law carries penalties from a misdemeanor to felonies for those squatters who return to occupy the same home. For more information, email officer Malcolm Napier of the Metropolitan Police Department at M14459@LVMPD.com.

• AB 192 —Effective Oct. 1. I know that some of my readers will not be happy with this new law, which pertains to the developer's control over associations. The new law changes the period of time for this control. For homeowner associations with less than 1,000 units, the builder's control terminates 60 days after the conveyance of 75 percent of the units. This does not change the law whereby after the conveyance of 25 percent of the units, that at least one member of the board and no less than 25 percent of the members of the board must be elected by the unit owners other than the developer

The builder would hand the HOA over to the homeowners in associations with 1,000 units or more, 60 days after the conveyance of 90 percent of the units have been delivered to homeowners. To offset such a potentially long period of time the developer is in control of the homeowner association, 60 days after the conveyance of 15 percent of the units to homeowners, at least one member and not less than 25 percent of the members on the board must be elected by the unit owners other than the developer.

• AB 141 — Effective Oct. 1. This is one of a series of laws passed as a result of the Nevada Supreme Court decision pertaining to the extinguishing of a mortgage. The previous law required that a copy of the notice of default and election to sell a home be mailed only to holders of certain security interests if the holders had notified the association of their security interests 30 days before the notice. This requirement has been rescinded, and now places the burden on the association and its collection company to mail the notice of default and election to all holders that have a security interest on the home (loans, equity loans, lines of credit, mortgage, etc).

It should be noted that the state legislators did respond to the multiple testimony of the difficulty of associations in finding out which lenders and which contact persons needed to receive their notices.

• SB 306 — Effective Oct. 1. Lenders who are licensed, registered or authorized to conduct business in Nevada that are the mortgagees or beneficiaries of deeds of trusts under residential mortgage loans shall provide to the Division of Financial Institutions the name, street address and any other contact information of a person to whom an association can contact in order to serve notices per NRS 116.3116 to 116.31168 inclusive (foreclosure processes).

The Division of Financial Institutions will be required to maintain on its website, this information, prominently displayed or a link to the information being provided by the lenders. One caveat to all is that your collection company should make a copy of the information on the website, especially as to date copied from the website in order to show that the servicing of the notice to the lender was based upon the information provided by the lender, as a precaution since lenders can and do change their website and could claim that the notices were improperly served.

• AB 183 — Effective Oct. 1. This law establishes a penalty up to $500, plus attorney fees and any other actual damages, to the grantor or any senior lien holder if the grantee for a deed in lieu of foreclosure sale fails to record the deed within 30 days. There are cases whereby the lender does not complete a foreclosure sale but accepts a deed from the borrower, in which the borrower, in essence, surrenders ownership of the property. The law requires the lender to record that deed.

• SB 377 — Effective July 1. When a homeowner pays her property taxes, it includes the percentage of the taxable value of the common elements, such as land (parks) and buildings (clubhouses). This law requires the association to provide information to the county assessor to assist in identifying the community units to which the taxable value of the common elements is to be allocated. If the association fails to provide that information, the property taxes on the common elements must be paid by the person or the association that is the owner of the common elements.

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