Termination of HOA is complicated

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Q: Is it possible to leave a homeowners association? I have details if you are interested in my situation.

A: As an individual homeowner, the answer is “no.”

The termination of a homeowner association is complicated. Sections pertaining to termination include Nevada Revised Statute 116.2118, NRS 116.21183 and NRS 116.21185. First, an association may be terminated only by agreements of the units owners to whom at least 80 percent of the votes are allocated or any larger percentage the declaration (CC&Rs) specifies. There may also be other approval requirements found within the declaration.

In the case of a condominium or planned community containing only units having horizontal boundaries described in the declaration, an agreement to terminate may provide that all of the common elements and units of the community must be sold following termination. In this case, the agreement to terminate must set forth the minimum terms of the sale.

In the case of a condominium or planned community containing units not having horizontal boundaries described in the declaration, an agreement to terminate may provide for sale of the common elements, but it may not require that the units be sold following termination, unless the declaration as originally recorded provided otherwise or all of the units’ owners consent to sale.

I could continue to summarize the various sections of this law pertaining to the agreement to terminate, but I think it is obvious to any reader that this is a complicated process. There are many additional issues such as the individual loans that homeowners may have whereby the lending institutions would have a part in this decision, as the termination would be considered a “material change” and additional procedures would need to be followed.

There are practical issues, especially for the condominiums, as to the servicing of the common areas, both maintenance as well as utility expenses. Needless to say, if any association seeks to terminate, you would need the guidance of your legal counsel.

Q: I live in a community that requires assessments be paid to the association. In short, the dues cover the use and upkeep of community amenities, landscape, tennis courts and two swimming pools.

For the past two summers, and again this year, our board has only opened one of the pools. When questioned, they said they were waiting on parts. Since our dues cover the use of two swimming pools are we, as owners, owed a rebate? Or, what can I, as a homeowner, do to compel our board to live up to the bylaws and covenants, conditions and restrictions?

A: You did not indicate what parts the association pool needed. Swimming pools are not inexpensive amenities; just installing the automatic chemical feeders can cost as much as $13,000 per body of water. There could be some major plumbing issues. I know of one association under 100 homes that has three swimming pools. Why three? The developer was more interested in a marketing his community than the costs to operate them.

There are associations with multiple pools that have made formal decisions to alternate which pools will be open for the season because of the cost to operate them. In those associations, the boards had the swimming pool expenses on their board agendas to discuss the finances of maintaining them. Their operating budgets for the year reflected that decision.

It should be noted the budget still had to reflect funding the reserves for the unused swimming pools and had to reflect the reduced operational costs, as you cannot just stop maintaining these pools.

Your board should openly address the issue of the closure of the second pool to their homeowner and to address the finances. There could be legitimate answers as to why a reduction in assessments during the pool season have not been made.

Barbara Holland is a certified property manager (CPM) 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.