Chances are very good at some point you will live in a community here in the Las Vegas area that is controlled by a homeowner association (HOA). There are about 2,300 associations here. If you live in a single family home built after 1995 there is a very good chance it belongs to an HOA.
What is the Purpose of an HOA?
HOA’s are set up as non-profit corporations in most cases and their purpose is to establish and enforce standards. These standards are meant to protect the assets and living experience of all the members of a particular community. Can you imagine someone in Sun City Anthem tearing down their home and replacing it with a double wide trailer? Obviously, the trailer would be incongruent with the standards of the community and if you were the next door neighbor imagine the effect of that homeowner’s decision on the value of your house!
HOA’ also are charged with maintaining records of the community, handling the finances, budget, and maintaining common elements, as well as their long term replacement.
How are HOA’s Organized?
As previously mentioned, HOA’s are set up as non-profit corporations and generally governed by Nevada State Statute (law) provisions named NRS116 and the accompanying code written primarily by the Nevada Common Interest Community Commission and Nevada Real Estate Division. HOA’s are also subject to relevant Federal statutes.
Once the HOA is filed with the State they have corporate documents known as “governing documents”. These include Articles of Incorporation, bylaws, rules and regulations. HOA’s also employ a representative government in the form of an elected board. This board has specific duties and powers to govern the community in accordance with the governing documents. Board members are unpaid volunteers and have legal responsibilities to uphold the duties of their office. Being the work associated with many associations is far more extensive than the time a board member can generally commit, so boards often contract with management companies to perform much of the work needed to run the HOA.
Here are Some Tips to Make Your Life Easier in an HOA
- Once a home is a part of an HOA, the occupants (including all tenants) are subject to the rules of the community. If you don’t like the rules don’t live there or try and work with the board to resolve issues. First, you will have to get educated on how an HOA works. Sometimes people who initially disagree with how a community is run come to understand why some things have to be accomplished when they come to know the totality of issues involved.
- Pay your assessments on time, even if you are in a dispute. Unlike rent where you can withhold rent in certain circumstances, not paying your HOA will only subject you to grief and fines. State laws provide avenues to address legitimate grievances. Did you know an HOA can actually foreclose on your home if you don’t pay your assessments?!
- Understand assessments should increase incrementally over time. Assessments that never go up may appear on the surface to be a good thing, but as inflation makes the cost of services more expensive, assessments that don’t keep pace forces the board must scale back on the upkeep of the community’s assets in order to stay on budget. This can lead to components of the community needing replacement sooner, increased legal liabilities such as slip and fall hazards. The possibility of large special assessments to pay for unexpected costs in later years can end up costing far more in the long run than regular small increases to the assessments.
- If you get a notice of a violation don’t ignore it, deal with it directly. Most HOA’s just want compliance. Good communication is welcomed in a good HOA to get problems solved quickly, and at a minimum of inconvenience to all parties. Nobody likes paying fines, so if you receive a courtesy take action right away. Delaying will usually just end up costing you more in the end.
- Seek out a few neighbors and the board members. Having direct relationships can really help you when issues may arise.
- Do not make any architectural changes without first checking to see what the HOA’s policy is on changes. Nobody wants to pay for changes to their home only to have the HOA force them to remove the changes. Yes, they can legally do this, so be careful. Again, simple communication is the key.
- Know the basics of your HOA: parking restrictions, rules about noise, rental restrictions etc. Most of the important rules governing use are usually located in the governing docs and outlined in a table of contents. You don’t have to be a legal scholar to understand your governing documents.
Paul Rowe is co-owner of Shelter Management Group (SMG) and a licensed Provisional Community Association Manager (CAM). For questions about HOA’s and related management services you may call him at 702-818-4780 or email: info @ sheltermanagementgroup.com