HOA smackdown: 27 guilty pleas entered so far

Regulators responsible for overseeing the state's homeowners associations lowered the boom on the Autumn Chase board in North Las Vegas. On Oct. 9, the Nevada Real Estate Division ousted the board's three members, fining two of them $86,200, and banned all from serving on any HOA governing board in the state.

All it took was some 250 violations of state law by the husband-wife tag team that state officials said dominated and possibly victimized the third board member, and a four-year fight by disgruntled homeowners to expose the trio.

It was the first time the Nevada Commission for Common-Interest Communities and Condominium Hotels, which is part of the Real Estate Division, has removed an HOA board.

The commission's action against Joseph and Barbara Bitsky and Hellen Murphy found they had charged more than $10,000 on the association's credit card on personal expenses, failed to prepare financial statements or conduct board elections, and retaliated against homeowners who complained to the Real Estate Division.

Last year, Joseph Bitsky pleaded no contest to coercion in North Las Vegas Municipal Court after he blocked the front door of his home to keep other homeowners from leaving a contentious meeting. He was upset the meeting had been recorded.

Autumn Chase has 46 homeowners and operates on a $9,000 annual budget. Although the board's conduct has been outrageous, the community looks like Lake Wobegon when compared with an ongoing, unrelated federal investigation into a scheme to take over 11 valley HOA boards and steer lucrative legal, construction and association management contracts to the conspirators. Guilty pleas have been entered by 27 people thus far, and prosecutors expect to charge at least a dozen more suspects by year's end in a massive case they allege involved more than $8 million funneled through secret bank accounts.

Make no mistake: Many homeowners associations in Nevada are run well - or at least as well as any organization trying to represent the best overall interests of people with varied values and disparate interpretations of community restrictions and covenants. Serving on an HOA board, particularly when so many property owners have been hammered by the housing market collapse or unemployment, is often a thankless task.

Equally true, however, is the dismal record of state and local authorities in investigating and enforcing state laws governing homeowners associations and their boards. That this month's action to remove the Autumn Chase board was described by regulators as "unprecedented" is proof enough. There have been thousands of complaints to authorities about boards and members, yet this is the first board removal?

Remember: It took the feds to step in and move against the multimillion-dollar fraud involving 11 local associations.

In discussing the state commission's action against the Autumn Chase board, Terry Johnson, director of the Nevada Department of Business and Industry, stated the obvious: "It is critically important that homeowners associations operate with transparency and accountability in carrying out their duties."

Equally critical is a healthier state and local appetite to investigate, remove, fine and prosecute HOA criminals.