Call Now: 775-322-3666

Who Does the HOA Attorney Represent?

The homeowners’ association’s (HOA) attorney represents the HOA as an entity. The HOA is separate and distinct from the individual directors, homeowners, and community managers. Typically, the HOA attorney is charged with looking out for the best interests of the HOA, such as by reviewing the HOA’s rules, regulations, and governing documents to make sure that they are up-to-date and do not violate existing laws. If there is a dispute between the HOA and an unhappy homeowner, for example, the HOA attorney advises the Board on the best interest of the entity and the entity’s obligations to its members. Should formal mediation or litigation be necessary, the HOA attorney may represent the HOA during the proceedings.

An HOA Is a Separate, Distinct Entity

The homeowners’ association is a separate entity, much like Walmart is a separate entity from that of its shareholders, board of directors, and corporate officers. The board for the homeowners’ association – like the board of directors for Walmart – acts on behalf of the association by, for instance, creating regulations and rules that protect and further the interests of the homeowners’ association and its community. The HOA can own property, have a bank account, enter into contracts to buy goods or services, and to sue or be sued.

HOA Attorneys Represent the Association as an Entity

The HOA attorney represents the homeowner’s association as an entity, rather than the individual board members or directors.

An HOA attorney is the legal counselor for the HOA. The HOA board members are charged with ethically acting on behalf of the HOA, such as by voting for regulations and rules, and subject to the Business Judgment Rules. The HOA general counsel (another name for an HOA attorney) legally advises the HOA board on the governing laws that may impact the association. An HOA attorney will also assist the HOA board in amending governing documents for the HOA. The HOA attorney is additionally responsible for reviewing the homeowner’s association’s governing documents to make sure that the HOA complies with its own rules and regulations.

General counsel for the HOA may also evaluate decisions that are made or contemplated by the board to ensure that the decision is in the best interest of the HOA as an entity, rather than the board members as individuals. For example, if the board is voting on whether to raise the HOA fees and the compensation for the board members, the board members have an inherent interest in raising the fees and the compensation for the members. The board members can still vote on these matters; however, an HOA attorney can act as a neutral third party to make sure that the proposed terms of the resolution for the increase in the HOA fees and board member compensation is fair and in the best interest of the HOA, not any or all individual board members.

Further, as the Nevada state legislators pass new state laws in Nevada and society changes, it may become necessary for the HOA board to update its rules and regulations. For example, some common regulations for HOA’s include prohibitions against homeowners running businesses out of their home and restrictions on noise. If the legislators pass a new law prohibiting homeowners’ associations or landlords from restricting a homeowner’s ability to run a remote consulting business out of his or her home, for example, an HOA attorney might help the board understand the new law and amend the HOA’s documents accordingly.

Additionally, one of Nevada’s new laws makes it so that from May 1st through September 30th of each year, the State and City laws about the hours during which construction may commence takes precedence over an HOA’s rule about construction hours. If the HOA’s regulations and rules prohibit construction after 3 pm, for instance, but the State or City law says that construction should stop at 8 pm, then the State or City law may apply, not the HOA’s regulation.

Having an HOA attorney review the HOA’s governing documents, rules, and regulations, in part, serves the goal of protecting the best interest of the HOA as an entity by making sure that it remains compliant with new laws. Without an HOA attorney, an HOA might be subjected to a lawsuit by a homeowner because the HOA’s restrictions are contrary to the law. An HOA’s attorney might help limit the HOA’s liability, thus protecting the interests and purpose of the HOA.

Does an HOA Attorney Represent Directors Individually?

The HOA attorney does not represent directors individually; however, the HOA attorney can – and should – advise the HOA board and have conversations with the individual HOA directors about the legal rights and responsibilities of the HOA board and the HOA.

The board of directors for the HOA have obligations to act in the best interests of the HOA by, for example, making sure that the individual members are making business decisions or voting for or against something because it would help the HOA, rather than the board member’s personal interests. As discussed above, an HOA attorney represents the HOA as an entity, but, as part of that representation, may review contemplated resolutions or proposed changes to ensure that the action would not unduly harm the HOA’s interests (such as by excessively increasing the compensation of the board members when the HOA is in financial distress).

Does an HOA Attorney Represent Individual Homeowners?

As discussed earlier, the HOA attorney represents the HOA as an entity; however, the attorney may act as a buffer between the HOA board and an unhappy homeowner. Furthermore, the HOA attorney may attend meetings where homeowners are present and are expressing their concerns about the HOA. Following these meetings, the HOA attorney may recommend that the HOA board take steps or actions based on the homeowner feedback or concerns.

As of 2013, it is the law in Nevada that, in disputes involving a homeowner’s association, the “disputing parties must complete the Alternate Dispute Resolution (ADR) process” before commencing a lawsuit. If the HOA’s governing documents have a process of resolving disputes in-house, that process must be fully followed before participation in ADR. At all times, the HOA attorney will typically represent the HOA, rather than an individual board member or homeowner. HOA boards are encouraged to communicate with an HOA attorney openly and clearly about what the HOA attorney can provide to the HOA and any limitations on the terms of representations.

Does an HOA Attorney Represent the Community Manager or Management Company?

No, the HOA’s attorney does not represent the community manager or management company. The HOA attorney can, for example, field questions that the community manager or management company has, with the permission and knowledge of the HOA board.

During the COVID-19 pandemic, for example, the HOA attorney may be directed to explain to the community managers the social distancing, masks, and sanitation rules for indoor and outdoor common areas, such as what notices must and can be posted. In some cases, the HOA may be subject to fines or other penalties for not complying with these rules, so the HOA might be responsible for advising the board on these obligations as well.

When a Nevada HOA Fails to Make Repairs

A homeowner’s association’s board is generally responsible for maintaining and repairing common areas in its community. The board should be aware of its responsibilities and the consequences of failing to meet them.

What Are an HOA’s Responsibilities for Maintenance and Repair?

An HOA’s responsibilities differ for each community. However, most communities require the Association through its Board of Directors to maintain, repair, and replace common areas. The board’s duty to maintain common areas typically includes the upkeep of common pools and parks, or the repair of a community clubhouse, among other things.

The board’s annual budget should include the anticipated costs to maintain common areas. They should also keep a reserve fund for repairs and replacements depending on the useful life of each common element. The HOA  typically creates its budget based on the periodic dues paid by homeowners. If unexpected repairs require additional funds, the Board may consider a special assessment, requiring homeowners to pay a one-time fee to cover the cost of repairs. 

What if an HOA Fails to Maintain and Repair?

If the HOA and its board fail to maintain and repair common areas, they face several possible consequences. If the board is failing to meet its obligations, homeowners may pursue remedies such as:

  • Removing a board member: If homeowners find that the board’s failure to maintain and repair is due to a board member’s incompetence or non-performance, they can seek the removal of that member.
  • Amending the HOA’s governing documents: The board and homeowners may seek to amend the community’s governing documents if they fail to give the board adequate authority to make necessary repairs. 
  • Suing the HOA:  Homeowners may be able to sue a board member if they believe the HOA’s failure to maintain and repair is due to the member’s breach of fiduciary duty or failure to properly manage the HOA’s finances.  However, there may be pre-litigation requirements that the Homeowner must engage prior to filing suit. 
  • Additional Consequences: If poorly maintained property becomes a nuisance or health risk to surrounding properties or the public, the board may also be cited or fined by city, county, or state officials. 

If the board is aware of needed repairs or maintenance, it can head off homeowner complaints by providing a plan of action and timelines for the repairs. If it becomes clear that the community requires extensive repairs, the board members should make a proactive plan to address any problems as quickly as possible. An HOA lawyer can help the board navigate its obligations to the community.  

Security Camera Usage in an HOA

Before installing a security camera in a homeowners’ association community, homeowners and associations should consider federal, state, and local laws, as well as the community’s governing documents. In the last decade, security cameras have become smaller, less expensive, and easier to use increasing their popularity with homeowners and businesses but their installation should not be done without consideration. 

Can Homeowners Install Security Cameras?

Homeowners who live in an HOA community may want to install a security camera to monitor their property. However, homeowners should be aware that their HOA’s governing documents may limit their ability to install cameras. Almost every HOA has a section in its governing documents that require owners to obtain approval before making improvements or changes to the exterior of their property, which may include the installation of a security camera. 

Further, any homeowner planning to install a security camera should be aware of their neighbors’ reasonable expectation of privacy. A reasonable expectation of privacy means that homeowners may not position their cameras so that they record the backyards or interiors of their neighbors’ homes. Homeowners should consult with their association to ensure that they adhere to all relevant rules and guidelines before installing a camera.

Can HOAs Install Security Cameras?

Associations are usually not required to install security cameras in common areas. However, if the association decides to install security cameras or the homeowners request cameras, an HOA lawyer can help the association review aspects of security camera usage that can protect both the association and the homeowners. 

Before installing security cameras, an association should:

The association’s security camera policy should be put in writing and homeowners should be made aware of the policy. The association can share the policy with homeowners by posting a physical notice or posting it on an online community forum. Homeowners need to be aware of the policy so no one is under the impression that the camera feed is constantly monitored. Further, the association should ensure that the footage is stored professionally and that no one can access the footage privately or from their personal computer. A policy regarding storage and access can help protect homeowners’ privacy. Consulting the association’s lawyer will help associations navigate any issues associated with installing security cameras. 

When Security Walls Come Tumbling Down: Is the HOA Responsible?

HOAs often have security walls around their perimeters, and the Nevada Legislature passed a law in 2009 that requires the HOA to repair these walls when necessary. However, the law raises questions for the HOA when they need to make these repairs. An HOA lawyer can review their covenants to ensure that it is clear who is responsible and that Nevada law is followed.

The HOA Must Handle Security Wall Repairs Under Most Circumstances

The Nevada law mandated that the HOA has legal responsibility for any security wall located inside the community that borders on a common area. This is not the same thing as a wall that encloses a gated community. Instead, the wall must be inside the community. These walls are often owned by the individual property owner, and the responsibility for their maintenance can be confusing.

For the HOA, it means that they will need to increase their financial reserves in case they need to make these costly repairs. However, the homeowners are often the owners of these security walls through their deeds. Under Nevada law, it is possible that an HOA does not have to foot the bill for these repairs if the governing document states that the homeowners must pay for it themselves. The HOA also has the ability to petition the county to take over the responsibility for these walls. 

The HOA May Encounter Legal Issues When Repairing Security Walls

There are numerous legal issues involved with the potential fixes. First, an HOA may need to enter onto private property to make these repairs and may need specific permission from the owner. The HOA must maintain the walls when they do not own them or the property on which they are located. 

Second, the HOA may need to increase its financial reserves and its operating budget. If there are extensive necessary repairs, it could mean that the HOA must pass the expense along to all homeowners in the form of a dues increase or special assessment. This will be very controversial because the walls are not commonly owned. 

Finally, the HOA must repair the damage to the walls, no matter who caused it. This could include vandals. There are also instances in which the homeowner themselves could have done the damage, and the HOA must pay for the repairs because of this law. 

These New State Laws Will Impact HOAs in Nevada

In the latest legislative session, Nevada lawmakers passed several laws that impact Homeowner Associations. The laws range from what cars can be towed to clarifications on the imposition of fines for continuing violations. The full implications of these laws for HOAs can be difficult to determine at first glance.

Which New Laws Affect HOAs?

Although the legislature passed several new laws impacting HOAs, the most urgent ones relate to:

  • Construction Hours
  • Towing Regulations
  • Account Set-Up Fees
  • Electronic Access and Payment Options
  • Foreclosures
  • Continuing Violations

Constructions Hours

State and City construction hours now supersede HOA restrictions. Even if the HOA would like to limit construction hours in their communities, contractors may work longer hours if allowed by State and City ordinances. However, this law only applies from May 1st through September 30th each year.

Towing Regulations

HOAs of apartment buildings and townhome communities with common parking areas may no longer tow vehicles based on an expired registration. However, associations will no longer be held liable for excess unregistered vehicles in their community. 

Account Set-Up Fees

As of January 1, 2022, laws regulating fees for account set-up will change. Associations may charge a reasonable fee, up to $350, for the opening or closing of any file for a unit. The fee must be based on the actual costs incurred by the association. The association may automatically increase the fee each year based on the Consumer Price Index. However, the increase may not exceed 3%. If an association fails to respond to a complaint about fees within 30 days, it may be fined $250. 

Electronic Access and Payment Options

According to Nevada legislation, as of January 1, 2022, some associations, depending on size, will need to establish electronic access to paperwork for clients. Further, as of January 1, 2023, some associations will need to establish an electronic payment system. Although many associations may already have such digital systems in place, those that do not may incur a significant cost establishing such a system.

Foreclosures

New legislation has established that no one involved in the foreclosure of a property may purchase the foreclosed property. Based on this law, HOAs are prohibited from purchasing homes in foreclosure in their communities.

Continuing Violations

Continuing violations are no longer capped. The fines charged by the association for a violation may accrue for as long as the violation continues. However, the association must allow the homeowner a reasonable time to cure the violation after receiving written notice before imposing fines.  

What You Should Know About Inheriting an HOA Property

Every HOA should be aware of how its governing documents treat transfers of ownership due to inheritance. The new owner has an obligation to follow HOA laws just the same as the previous one did. The requirement to follow HOA rules passes along with the property. HOA membership is not optional when one inherits a home within a common-interest community.

New Owners Must Pay the HOA Fees

HOA owners are required to pay the monthly or quarterly fees when they are due. If the previous owner did not pay HOA dues before they passed, the new owner will be liable for the shortfall because the bill goes along with the property instead of the person. Those who do not pay HOA fees could even face foreclosure. HOA fees apply to ownership of the property no matter whether it is occupied.

Depending on the governing documents, the HOA could try to charge a fee for the transfer of ownership because an inheritance does mean a new owner. This may be allowed. Anything that the HOA does must be supported by its own governing documents and state law. Accordingly, the HOA should take some time to review its rules before it assesses any fees.

Any Changes to the Property Could Require HOA Approval

The new owner may want to renovate or make other changes to the property to either move in themselves or ready it for sale. The HOA will have the right to decide whether certain changes to the property are allowed. The rules could be very detailed, and they must be followed. HOAs have the power to fine people who do not follow the rules, and they could file lawsuits for violating covenants. That is not to say that everyone who inherits property will have issues with the HOA. For an owner, the best way to deal with an HOA is to communicate with them to know the rules and how the HOA may react to certain changes.

At the same time, the HOA’s power is not unlimited. They could face legal issues if they overstep their rules. Many associations contact an HOA lawyer if they are having a dispute with an owner to ensure that whatever they are doing is allowed by the governing documents. In the end, the best situation is avoiding any legal issues before they could even arise. 

Do You Need to Amend Your HOA Governing Documents?

Before embarking on the process of amending covenants, conditions, and restrictions (CC&Rs) and Rules/Regulations that govern homeowners’ associations (HOAs), HOA boards must have clear reasons for amending the governing documents. They should also keep in mind that amending HOA governing documents can be time-consuming and expensive. Once they have performed their due diligence and carefully deliberated on the matter, they can then start the amendment process.

Why Should HOA Governing Documents Be Amended?

HOA CC&Rs and rules and regulations lose their relevance with time. Some changes in the community and society at large might necessitate the amendment of HOA governing documents. New state laws may also force associations’ boards to amend their covenant and bylaws to stay compliant.

Massive demand from homeowners might also push HOA boards to change the bylaws and CC&Rs. If most members want to change the minimum number of people required for a meeting to happen, for instance, then the board should carefully consider that demand. The decision to amend the governing documents should, however, be based on good judgment and logical thinking.  

Although there is no standard timeline for amending HOA CC&Rs and changing HOA Rules and regulations, it’s best practice to inspect the governing documents after every three to five years. An HOA lawyer can help the board identify outdated provisions or stipulations that no longer adhere to the law. The lawyer can also guide the HOA on the best ways to ensure CC&Rs are equally and non-prejudicially enforced within the community.  

Steps for Amending HOA Governing Documents

Proposal of Amendment

The amendment process starts with a proposal describing the modifications to the governing documents.

Review Meeting

The board holds a board meeting to review the proposed amendment. Homeowners are allowed to offer their views regarding the proposed amendment.

 Voting  

After the review, the whole membership votes to either pass or reject the proposed amendment. The voting period may be prolonged in case an association experiences low voter turnout.  The current governing documents dictate what percentage of members need to vote to approve an amendment.

Tallying of the Votes

Vote counting may happen during an open meeting so that homeowners can keep an eye on the vote-counting process.

Amendment Approval

Depending on the governing documents, HOAs generally require votes from either a simple majority or two-thirds of the membership to approve the amendment.

Recording and Effectivity

Upon approval, the county recorder’s office must be notified of the changes for recording purposes. Bylaws don’t require recording. Members must, however, be notified of changes before bylaws become effective.

Construction Penalties in HOAs

Homeowners should always confirm HOA rules prior to commencing construction or alteration on their home. Whether installing a patio or building an addition, most HOAs have strict guidelines about what can be built, where it can be built, and how it must look.  Most HOAs also require HOA approval prior to building and/or altering landscape or home. Homeowners who fail to follow the established approval process may be required to remove the structure at their own expense.

Standard Considerations

The first thing every homeowner should do is review HOA governing documents. Most will require submission of the plans to the HOA for the board to review and approve. This process varies from HOA to HOA, so it is wise to confirm the process and factor this into the building schedule.

Once the plans are approved and the required permits are secured, homeowners must work closely with builders and contractors to ensure that the work is performed in accordance with HOA rules. This includes scheduling work during approved periods and ensuring that waste and construction debris are properly removed from the property. It also requires confirming where construction trailers, portable toilets, etc. can be positioned during the construction process. During construction, the homeowner is responsible for ensuring that the contractor and their teams remain compliant with HOA policies. 

Special Circumstances for Condos and Common Areas

Whether it is an easement within a subdivision or a common area in a condo community, these create special circumstances that every homeowner should know before initiating improvements. Most interior work is not prohibited as long as they do not change the structure or outward appearance of the community. However, any structural changes such as knocking down walls, rerouting electrical, plumbing, or heating systems are likely prohibited without prior approval.

In communities where homeowners can modify common areas, such as by placing landscaping within common areas, it is imperative to comply with the required approval procedures and selection of landscaping materials. HOA’s are required to enforce CC&R’s equally and homeowners who do not comply can find themselves in a situation where the condo manager removes the improvements, restores the landscaping within a common area, and then sends the homeowner the bill for the work.  

Property Liens are a Steep HOA Penalty

HOA’s can issue fines and significant penalties against homeowners who fail to comply. If a structure is built that does not comply with HOA regulations and guidelines, these penalties can result in a lien being placed upon the property for any prohibited improvements similar to liens placed for unpaid assessments.

10 Things HOAs May Regulate

Nevada HOAs are allowed to regulate many things in their neighborhoods as long as they comply with their own governing documents as well as state and federal laws. People who plan to purchase homes located in neighborhoods controlled by HOAs should make sure that they know the rules before buying. HOA rules can help to preserve the value of homes in their neighborhoods, but they can also affect the quality of life and finances of the people who live within them. Here are 10 common examples of HOA regulations in Nevada.

1. Pets

An association shall not and the governing documents of that association must not prohibit a unit’s owner from keeping at least one pet within such physical portion of the common-interest community as that owner has a right to occupy and use exclusively but an HOA may be able to restrict the number of pets and/or enforce rules about picking up after pets.

2. Exterior Paint Color and Siding

Some homeowners might be dismayed when they learn that they cannot paint their homes in the desired color or add siding or shingles that fail to comply with the HOA’s regulations. Homeowners should make sure that they understand these restrictions before buying homes in the neighborhood.

3. Fences 

HOAs often regulate the types of fences that can be installed by homeowners. This might include restrictions on fence heights and materials used in their construction.

4. Children’s Play Structures

Parents whose homes are regulated by HOAs need to check before erecting play structures. Some HOAs restrict swing sets, slides, jungle gyms, and basketball hoops.

5. Landscaping Choices

Many HOAs have rules regarding homeowners’ landscaping choices. These might include things like the types of shrubbery, hedges, and flowers that are allowed to be planted.

6. Mailboxes

HOAs place restrictions on the mailboxes that their residents install. This normally includes requirements that all of the mailboxes in the neighborhood are uniform in appearance and style.

7. At-Home Businesses

Some HOAs restrict individual homeowners from running home-based businesses. This can be a problem when an entrepreneur decides to start a new business and wants to run it from home.

8. Noise

Noise restrictions are common in HOAs. These often include prohibitions on loud music, parties, and engine revving, and limits on the hours during which people can make noise.

9. Sheds

While sheds are handy for storing garden tools, some HOAs restrict their construction and appearance.

10. Maintenance

Most HOAs have maintenance standards. Homeowners must maintain their properties in a good condition to preserve the value of the homes in the area.

What HOAs Can Do About Unpaid Assessments

When homeowners fail to pay homeowners’ association dues or assessments, HOAs have several options for enforcement. Dues are assessed to pay for the amenities and maintenance needs of the community. When an owner refuses to pay, it can cause dues for everyone else to go up or cause the HOA to fall into disrepair. People who own homes and fall behind on their assessments or dues may face collection efforts. If they still refuse to pay, the HOA can engage in other actions, including liens and foreclosures. Following the HOA’s rules and staying on top of assessments and dues can help prevent problems.

Common HOA Collection Actions

An HOA will normally begin with common collection actions when a homeowner falls behind on his or her dues and assessments. The HOA might try calling the homeowner and sending letters in an attempt to collect what it is owed. It might send a notice that includes the total amount that is owed, the number of days by which the payment is late, late fees and interest, and an offer of a hearing.  

A payment plan might be offered to the homeowner by the HOA. The homeowner’s privileges may be suspended until the amount is paid.  The Owner may no longer be in good standing if there are past due assessments and may be prevented from voting on HOA matters, including elections for the Board of Directors. If the owner proposes a payment plan, the HOA must accept it.

Liens and Foreclosures

An HOA will have a perfected lien against a delinquent homeowner once the assessment becomes past due. The HOA can then pursue collection actions against the homeowner. If the homeowner still does not pay,  a lien placed by an HOA on a home has a super-priority. If the HOA enforces its lien through a foreclosure action, the HOA’s lien will have priority over other liens, including those held by the homeowner’s mortgage lenders. Through a foreclosure action, the HOA can force the property owner’s home to sell and collect what it is owed before the other lienholders can recover anything. If this occurs, the homeowner may be on the hook to repay the difference between what the mortgage lender receives and the total amount owed. To avoid these types of enforcement actions, it is best for homeowners to stay current with their dues and assessments.  This is an ever-evolving area of law and, more often than note, deed of trust holders are stepping in to pay past due assessments to the HOA to protect their interest in the property.

GET EXCLUSIVE LEGAL NEWS
Receive our free eNewsletter with the latest legal news.