guest blog by Deborah Goonan
From the state that brought us the largest HOA federal fraud investigation EVER, now this:
Ira Hansen, a Nevada Republican Assemblyman, recently filed AB233, a proposal to repeal NV Statute 116, the statute governing homeowners’ associations. The intent, according to Hansen, is to delegate regulation to a lower level state agency, such as a commission on HOAs. Nevada HOAs are currently regulated by the Nevada Real Estate Division (NRED).
The reason for this proposed change? Essentially, according to Hansen, HOA disputes are too much trouble, the issues too “minor” to bother with! If you read the attached news release, the insinuation is that all HOA issues involve rules over flying the flag or other aesthetic concerns.
Really? Tell that to the thousands of members of 37 HOAs affected by a massive construction defect fraud scheme! Ask them if they think HOA election fraud is a “minor” issue that does not deserve the attention of state lawmakers. Ask these owners if dealing with the aftermath of crooked attorneys, property managers, and fraudulent straw buyers are other “minor” issues that continue to plague HOAs. Does NRED lack jurisdiction to handle these serious matters? If so, then what’s the point of having a regulatory agency with limited authority?
Of course, most would agree that HOAs have some rather unrealistic restrictions, oppressive covenants, and crazy rules that often do result in overblown disputes over trivial matters – mainly because they can. Restrictive Covenant “contracts” can say just about anything a Developer’s Attorney can dream up. Let’s face it, a lot of these claims that Hansen finds so time-consuming would qualify as frivolous, because the rules themselves are often petty, vague, and unnecessary.
But, rather than wash their hands of HOAs as inconvenient annoyances (despite the fact that all of the owners pay substantial property and various state taxes), why won’t NV lawmakers take a stand and simply declare such trivial “keeping up appearances” restrictions and rules unconstitutional and therefore invalid? Why not return full control of individual lots or units to individual owners, instead of the Association? Or how about repealing the authority of NV HOAs to fine or otherwise unilaterally penalize owners, without the benefit of due process?
Think about it, if the HOA Board had to initiate a legal suit over the color of window shades or a flag display – before the alleged offender could be fined or otherwise penalized – I suspect there would be very few lawsuits filed, and more effort to work out disagreements amicably. That would be especially true if either party – HOA or homeowner – had to pay stiff penalties for bringing frivolous claims that waste the court’s time.
And, truthfully, if HOAs are really that troublesome, why not just stop creating more of them?
(link to news release about NV AB 233)