Repeal of Nevada HOA statute?

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)

(link to Nevada AB 233)

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About

Ward Lucas is a longtime investigative journalist and television news anchor. He has won more than 70 national and regional awards for Excellence in Journalism, Creative Writing and community involvement. His new book, "Neighbors At War: the Creepy Case Against Your Homeowners Association," is now available for purchase. In it, he discusses the American homeowners association movement, from its racist origins, to its transformation into a lucrative money machine for the nation's legal industry. From scams to outright violence to foreclosures and neighborhood collapses across the country, the reader will find this book enormously compelling and a necessary read for every homeowner. Knowledge is self-defense. No homeowner contemplating life in an HOA should neglect reading this book. No HOA board officer should overlook this examination of the pitfalls in HOA management. And no lawyer representing either side in an HOA dispute should gloss over what homeowners are saying or believing about the lawsuit industry.

6 thoughts on “Repeal of Nevada HOA statute?

  1. robert

    Nevada is a “right to work” state, that prohibits involuntary membership in a labor union as a condition of employment.

    http://www.nrtw.org/c/nvrtwlaw.htm

    Title 53. Labor and Industrial Relations
    Chapter 613. Employment Practices
    Miscellaneous Provisions
    § 613.130. Unlawful Agreements Concerning Membership In Labor Organizations As Condition Of Obtaining Or Continuing Employment

    “It shall be unlawful for any person, firm or corporation to make or enter into any agreement, either oral or in writing, by the terms of which any employee of such person, firm or corporation, or any person about to enter the employ of such person, firm or corporation, as a condition for continuing or obtaining such employment, shall be required not to become or continue a member of any labor organization, or shall be required to become or continue a member of any labor organization.”

    Since Republicans believe in “right to work” laws — look at the collective orgasm they had a few weeks ago when Wisconsin became the 25th “right to work” state — why don’t Republicans simply introduce legislation to prohibit involuntary membership in an H.O.A. corporation as a condition of home ownership? For example, Nevada’s “right to work” law could be modified to become:

    “It shall be unlawful for any home owner or H.O.A. corporation to make or enter into any agreement, either oral or in writing, by the terms of which any member of such H.O.A. corporation, or any person about to enter the membership of such H.O.A. corporation, as a condition for continuing or obtaining ownership of residential property, shall be required not to become or continue a member of any H.O.A. corporation, or shall be required to become or continue a member of any H.O.A. corporation.”

    In plain English, under my proposal, home owners would have the statutory right to opt-out of their H.O.A. corporation, without having to give up their home.

    Yet during the 2014 election cycle, every Republican I talked to was 1) adamantly in favor of allowing workers to opt-out of labor unions, and 2) adamantly opposed to allowing home owners to opt-out of H.O.A. corporations. Their rationale was that workers are “forced” to join labor unions, but home owners freely, knowingly, and willingly agree to join H.O.A. corporations; and allowing home owners to opt-out would be “government interference with private contracts”.

    I’ll bet Ward money that even his buddy Jon Caldara ( https://www.youtube.com/watch?v=Ya0px16jYoY ), who is a proponent of right to work laws, would not support such a measure extending the same rights to home owners. Jon has a long history of claiming to support home owner property rights, and the organization to get such a measure on the ballot here in Colorado.

    Reply
  2. Cynthia

    This legislators proposal is ridiculous and without merit. I wonder where he gets his information from? Obviously, not from the hundreds of thousands of HOA homeowners in Nevada. There has to be a reason for his marginalizing and minimizing the true HOA issues, atrocities, homeowner abuses, financial abuses and housing thefts. If HOAs did not exist by statute in NV, as they do in every other state, I suspect they would then fall solely under corporation laws as non-profits and many depending on their amenities would be “for profits.” Housing tied to land and unimproved land ownership is real property law in every state that I know of. Without real property statutes, HOAs, COAs and POAs (CIDs), would be nothing more than any other private corporation with the homeowners as employees (indentured servants, etc.) for the benefit of the HOA, etc., board members and their “network.” It seems to me the abuses would be even worse and more secretive (if you can believe that) if they did away with Statute 116. I trust there is more behind this legislation than just trying to discount the significant, disgraceful, and many times criminal HOA homeowner abuses, financial abuses, range of criminality and property thefts.

    Reply
  3. Dave Russell

    And this is why federal HOA legislation is needed. It appears that our state lawmakers have given up on HOA legislation. The NV Legislature is just as insane as Arizona’s. Here in Arizona we only seem to pass HOA laws that hurt homeowners. Not to mention, the most severe consequence for violating any AZ State HOA laws is the loss of lien rights for 6 months. Boo Hooo

    Reply
  4. robert

    And this is why federal HOA legislation is needed. It appears that our state lawmakers have given up on HOA legislation.

    Agreed. See Evan McKenzie’s blog today, “HOA Oversight Bills Die In Florida” at http://privatopia.blogspot.com/2015/04/hoa-oversight-bills-die-in-florida.html

    Either we’re going to need federal legislation, or H.O.A. reform measures are going to have to be put to a popular vote (in states that allow it). Has anyone tried to do so in the past?

    Reply
    1. Deborah Goonan

      I am not aware of any state referendum votes on HOA issues, Robert. Florida does allow, but it’s not easy to get an issue on the ballot.

      Reply
      1. robert

        Florida does allow, but it’s not easy to get an issue on the ballot.

        Colorado also allows citizen-initiated ballot measures. I don’t know how “difficult” it is, but it obviously takes money and organizational skills — neither of which I have.

        If only there was somebody here in Colorado, who is passionate about H.O.A. issues, who has, if not the means himself, at least the connections, to get something like this started in time for the 2016 election cycle….

        Reply

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