Barbara Holland reviews proposed bills affecting associations

EDITOR’S NOTE: This is a two-part series reviewing proposed bills before the 2009 Legislation that will affect Nevada homeowners associations.

After the 2007 legislative session had ended, Gov. Jim Gibbons vetoed Assembly Bill 396 pertaining to homeowner associations. Because the veto occurred after the adjournment of the legislative body, this bill will revert back to the 2009 legislative session to either sustain the veto or override the veto.

Today’s article will highlight some of the proposed changes that could become law if the legislature overrides the governor’s veto. Please remember that the following sections are proposed and would not become law if the legislature does not override the veto.

NRS 111.239 pertains to the right of an owner to obtain solar or wind energy on his/her property. Subsection 2 proposed that under certain specifications, the association would have the right to enforce the color of the system.

The same proposed language would be included in NRS 278.0208. An association’s governing documents could specify the color of the system as long as it is manufactured in that color, and the specifications were in existence in the governing documents since July 1, 2007, or contained in them while they were in effect at the close of escrow of the very first home sale in the community.

The following paragraphs pertain to proposed legislation that would be either added, deleted or modified in Chapter NRS 116.

The first proposed addition would be that a member of a board who stands to gain any personal profit or compensation of any kind from a matter before the board must disclose that fact and must abstain from voting on any such matter. This section would exclude the declarant’s employees who serve on boards, as it relates to their employment with the declarant.

The board shall not, and the governing documents must not, restrict, prohibit or otherwise impede the operation of a motorcycle if the motorcycle is operated on any road, street, alley or other surface intended for the use of a motor vehicle.

Associations would still be able to reasonably restrict the parking or storage of a motorcycle. Motorcycle is defined as a motor vehicle designed to travel on not more than three wheels in contact with the ground and is required to be registered per NRS 482.

A member of the board, a community manager or any other representative of an association shall not use a radar gun or other device designed to gauge the speed of a vehicle for the purpose of imposing any fine or penalty or taking any other action against an owner.

This particular proposed change had many opponents who argued that the use of the radar gun was in the best interest for the community because of the speeding vehicles that could cause harm to people and property. By using a radar gun or other device, the association would have an objective procedure in calculating the speed of a vehicle within a community as opposed to subjective observations which often caused conflicts between the boards and homeowners.

Under current law, an association created prior to Jan. 1, 1992, which consists of at least 1,000 units, may allow the voting rights of the individual homeowners to be exercised by the delegates or representatives of the association. The proposed modifications would prohibit the use of the delegates or representatives to exercise individuals’ voting rights to elect or to remove a member of the board.

There is an exception. This form of voting by the delegates or representatives may occur during the period that the declarant is in control of the association and during the two-year period after the declarant’s control is terminated.

There is a further exclusion of this proposed change as master associations which govern time share plans pursuant to NRS 119A would be allowed to continue using delegates or representatives to exercise the voting rights of the time share owners.

Existing law provides that covenants containing certain information (NRS 116.2105). The proposed change would require covenants to contain any restrictions on the ability of an owner to rent or lease his unit, including the required approval from the association.

The covenants would also have to contain specific obligations, duties and responsibilities of the association with respect to the maintenance, repair and replacement of specific common elements and specific limited common elements. These would be, for example, your patio or balcony and other specified areas within the community. The law reads the obligations should be “a clear and conspicuous statement written in plain English in bold type and in a font easy to read….”

The problem with the proposed language pertaining to describing the maintenance responsibility of the unit owner is two-fold. First, most associations already have specific sections in their governing documents pertaining to the maintenance responsibilities of the unit owner and of the association. The fact that the legislature now wants bold print and easy font is a little silly as one could argue that there are so many sections that we could print in bold that it would eventually become meaningless.

Second, the problem is that it is more difficult to describe every type of maintenance problem that could potentially exist, especially in townhomes and condominiums. For example, plumbing issues — from pipe breakages, water leaks to sewer back-ups are probably the most difficult to describe as there are many different scenarios. If such specific language does not exist in an association’s governing documents and if the group wanted to comply with the new regulation, the change would require an amendment approved by the homeowners, which is extremely difficult to obtain because of voting apathy by the homeowners.

Another proposed change, which caused much discussion in 2007, pertained to the use of shutters, rolling shutters, changing the appearance of a window, exterior or interior wall, roof or other surface that is not part of an owner’s unit, but is a common element, or a limited common element and is adjoining, or in close proximity to his/her unit.

This proposal would expand a unit owner’s right to alter his/her unit as the association may not unreasonably restrict, prohibit or withhold approval. (NRS 116.2111).

Homeowners be careful what you wish for with this proposed change. It is one thing for an owner to install shutters, but read carefully. An owner could alter the exterior of the property that is adjoining or in close proximity to his/her unit. If I lived in an end unit and there was space that would allow me to expand my patio to the end of the building’s structure, the association would not be allowed to unreasonably withhold approval. It would not matter if one of the basic premise of associations, “improvements be consistent with the architectural style of the community” would disappear.

Can I build a storage shed since it is in close proximity to my unit? This is a Pandora’s box and one that homeowners would come to regret if this section became law.

The legislature did not take into consideration the maintenance of the common area.

For example, if owners are allowed to make improvements on the top of the roofs, what happens to the integrity of the roofs when it comes to leakage? Cost to replace roofs? Does the homeowner have to remove his improvement from the roof when it comes time to replace the roof? What happens if the current owner inherited the improvement and has no money to remove the improvement? How much more money will homeowners have to acquire in reserves as these improvements are attached to the buildings.

This proposed change was not probably analyzed as to its negative impact upon the community. The proposed law explicitly states that if an owner adds shutters that they will be responsible for the maintenance of them. The proposal is absolutely silent as to the responsibility of the unit owner to maintain any other of the additions or changes to his property, or to the adjacent common area that he/she has now incorporated for private use.

This concludes part one of a two-part series on AB396, with the second part to follow next Saturday. It is important for all board members, community managers and homeowners to contact their state representatives in our Assembly and Senate as to whether they should sustain the governor’s veto or override it. Even if the bill is not overridden, many of the proposed changes will be resubmitted for consideration by the Legislature.

It is imperative for all to comment about the proposed changes. As you will note, there are some changes that should be adopted and others that should not be adopted. It is important for the Legislature not to adopt changes for the sake of changes, especially in cases where the proposals would cause more harm than good. The Legislature needs to be adequately informed of both the positive and negative impacts of their proposed changes. This cannot happen, if those involved in association management and in association living do not contribute to the process by remaining silent.

Barbara Holland, certified property manager, broker and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to Association Q.&A., P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759, or she can be reached by e-mail at support@hlrealty.com.