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Day: July 2, 2010

Las Vegas Homeowners’ Association Issues

There are a number of issues in which a  Las Vegas Property Manager becomes involved when working with a Homeowners Association, issues that involve tact, people skills, communication and thorough knowledge of – in the State of Nevada – NRS 116 – Common Interest Ownership (Uniform Act).  The manager is often called upon to interpret different aspects of NRS 116 to guide the HOA Board of Directors in decision making or to suggest a consultation with the HOA attorney, if necessary.

One situation which frequently causes emotional reactions by homeowners in Las Vegas relates to xeriscaping of grass areas in front of condominium units.  While these areas are actually not owned by each individual homeowner and are considered common elements, those homeowners who prefer retaining the grass feel that a vote should be taken and no changes made without majority decision.

However, Homeowners’ Association Boards believe that planting drought tolerant landscaping saves money and that xeriscaping is strictly a Board decision.

In this matter, the property manager has to put aside his or her own personal preferences and either guide the Board to the appropriate section of NRS 116 or refer them to their attorney for a legal opinion.

The decision almost always causes one faction of the community to be resentful and the manager must help the Board to present the ruling to the homeowners in a tactful manner to avoid creating long lasting hostile feelings among dissenters.

Another often emotional issue relates to removal of one or more of the members of the Board of Directors.  This occurs when either an unpopular decision is made by the board in its entirety or if the actions of one or more officers are found to be offensive by a number of the homeowners in the community.

This is not an action to be taken lightly and requires a good deal of planning by the aggrieved homeowners who must obtain a specified number of signatures on a petition calling for a special meeting for a removal election.  Experts in Las Vegas Residential Property Management have stated that  recall of a board member is usually difficult.

The property manager is responsible for guiding the homeowners through the intricacies of a removal election.  In the latest 2009 update to NRS 116 Community Association information, it has now become easier to remove members of the executive board.

In order to remove a board member, if at least 35% of the voting members (homeowners) vote in favor of recall, then the board member or members are removed.  To be specific, if there are 100 voting members in a community and 35 of these individuals vote – with only 18 homeowners voting in favor of removal, then the recall process is successful.

Working with Las Vegas Homeowners’ Associations

Las Vegas Residential property management companies provide managers who are assigned to work with several homeowner associations and consequently, must be familiar with the specifics of each HOA Community.

One of the many important responsibilities of the manager is to attend the association meeting which may be held monthly – usually in the evening – and remain for the Executive Board meeting.   This may be held after close of the HOA meeting to possibly meet with homeowners who are in violation of the CC&R’s (Covenants, Conditions and Restrictions) and who have not cured the violation.

Depending on the degree of involvement of  the manager in accordance with the requirements of the Las Vegas HOA Board of Directors, he or she will help guide the direction of the meeting by clarifying legal issues based on association documents and responding to some homeowner questions.  Sometimes managers will have to help maintain order when homeowners respond to emotional issues related to decisions made by the Board.

Some managers take Minutes of the meeting and subsequently provide them to Board members for approval.  The Minutes are then read at the following HOA meeting for comments from homeowners.

Some of the skills necessary to homeowner association managers include:

  • Logical problem solving
  • Communication ability
  • Customer service skills
  • Conflict management
  • Effective time management
  • Group decision making
  • Understanding budgets
  • Multi task oriented

The manager must be familiar with the association documents and be knowledgeable of  the State of Nevada regulations governing homeowner associations.  He or she should guide the Board in the decision making process so that they are in compliance with State and Federal regulations.

When a problem arises that is beyond the scope of the manager’s expertise, it should be recommended that the association attorney is contacted.

The manager is required to maintain an inventory of all records of each client.  If the relationship between the residential property management company and the client is terminated, the manager will turn over all records to the new Las Vegas management company.

The manager is required to attend classes and obtain ongoing CEU’s (continuing education units) in order to stay current with changes in rules and regulations pertaining to HOA’s including (but not limited to) new developments in law, insurance coverage and accounting principles.

Some residential property management companies offer classes to their staff members and members of their client Boards; State agencies provide training to community mangers, Board members and interested homeowners wishing to be knowledgeable regarding HOA updates.

The manager must be careful to reveal any personal connection with service vendors or professionals to avoid any appearance of inappropriate business dealings and must not accept any gifts which will influence his or her acting in self interest or gain in HOA decision making.

The manager must ensure that financial transactions of a client are current, accurate and properly documented and maintained in compliance with applicable State laws and regulations which govern financial records.

Working with Las Vegas HOA’s

A Las Vegas residential property management company can work with HOAs (Homeowners’ Association) to help the Board of Directors manage the myriad details – both large and small – that are involved in the daily decisions of community life.  Since the Board is responsible for determining the policy of the association, the property managers act as advisers to the Board providing the value of their experience and expertise.

The manager may take on the responsibility of carrying out the directives of the Board which often includes daily operations of the HOA such as:

  • Providing routine inspections of the property
  • Noting and reporting violations of the CC&R’s (Covenants, Conditions & Restrictions)
  • Providing notice of violations to homeowners regarding lack of compliance
  • Helping homeowners resolve issues of property violations

Las Vegas Residential property management companies will maintain a list of vendors who are carefully and thoroughly screened to provide a high level of service to the HOA clients.  They can help the association by suggesting and obtaining three required bids from vendors in areas of pool maintenance, landscape gardening, plumbing repair and electrical work.  They also maintain a list of professionals which include attorneys and accountants.

In communities that maintain security services, the management company can provide a list of security companies.  When club houses need to be redecorated, the management company will locate vendors who will paint, wallpaper and install carpeting or new floors.

When emergency repairs are needed, a designated staff member of the property management company can be reached 24/7 to help solve the problem by finding and dispatching the appropriate repair person.

All vendors are required to complete specific forms and attach necessary documentation before being considered an approved vendor for goods and services:

  • Independent Contractor Information Form
  • Vendor Agreement Disclaimer of Liability Form
  • W9 Request for Taxpayer Identification Number
  • Secretary of State Trade Name Registration Form
  • Liability Insurance  Certificate from vendor’s insurance agent stating minimum liability coverage of $1,000,000
  • Certificate of Workers Compensation for company with more than one employee
  • If vendor is sole proprietor, an Independent Contract Workers Compensation Indemnity Agreement.

Residential property management companies also provide business and financial services to the HOA.  These financial reports include – on an interim as well as an annual basis:

  • Operating budget
  • Balance sheet
  • Accounts Receivable report
  • Bank reconciliation of all accounts
  • Cash disbursement report
  • Budget comparison report.

Las Vegas Neighborhood Communities that are governed by HOA’s are required to pay a monthly fee for maintenance.  Depending upon the services covered, the fee can be anywhere from the high $xxs to the low to medium $xxxs.

Of course, homeowners may pay these monthly fees  by sending a check to the management company or by paying in person at the company office.  Some companies have arranged to allow homeowners to pay their dues by automatic withdrawal payment.  They provide an ACH form which must be completed and given to the company along with a voided check so that the maintenance fees are conveniently paid each month.

Las Vegas Real Estate Investing

Investing in Las Vegas Single Family Homes

If your real estate investment focus is primarily on the Las Vegas single-family home market, there are a number of options to consider, any of which could prove quite profitable, provided your investment strategies are on target.

  • Purchase/rent or resell
  • Purchase/repair (fixer-upper)-rent or resell
  • Purchase fixer-upper/ sell to renovator as-is
  • Lease/option rental
  • Purchase/sell to investors

As in any money-making endeavor, the old saying “buy low/sell high” is the ideal scenario for any profitable venture; however, there are few simple money-making scenarios in the Las Vegas real estate investment game, particularly considering current market conditions.

In order to find the most profitable deals, you need to locate motivated sellers, including lenders with an inventory glut of deals gone bad, and adapt your methods to concur with the marketplace.

Since finding the properties that can make you money is the key to your real estate investment success, you have to know where to find the deals most suited to your investment goals, for example: Las Vegas Short sales, foreclosures, “underwater” homeowners, homes for sale due to divorce, death, relocation, etc.; these offer many opportunities for the astute investor to capitalize on.

Don’t forget the MLS. That may seem obvious, but the MLS allows you to quickly evaluate a property to see if it fits your profile of targeted properties. The MLS can be a shortcut to finding the particular kinds of housing that suit your investment strategies best. Check with the county recorder’s office as well to keep up to date on realty transactions.

Network with your business associates, attorneys, Realtors, accountant, etc., even your mailman. Let everyone know that you are in the market to purchase Las Vegas single-family homes. You may be surprised to find that some of your best deals can originate from many an unlikely source.

Another form of generating new business can be from Yellow page ads and flyers targeted at specific neighborhoods which work well in some cases, and not in others. However, you won’t know if they work for you unless you try them.

Once you have found a property or properties of interest, don’t make a move until you have determined the property’s current market value. Seems like a no brainer, but this is where your Realtor comes in. He/she will have access to the up-to-date information you need in order to determine how much you are prepared to pay for the property, as opposed to the asking price.

Once you have concluded a deal, it is imperative that you have given equal thought to formulating effective strategies to attract buyers or renters, in order to generate profits as soon as possible after purchase.

Always keep in mind that reliable information and advice is the foundation upon which every successful real estate venture is based.

Investing in Las Vegas Real Estate

Condominiums

Investing in Las Vegas condominiums is no different than any other real estate property investment. Knowledge of current market conditions, working with an experienced, knowledgeable Realtor, and having a real estate attorney and CPA on your team will certainly help to ensure that intelligent investment decisions will be made.

In the recent past, certain cities, such as Miami and Las Vegas, for example, experienced explosive growth in condominium construction, and condo homes were being sold as fast as they were being built, with even pre-construction units being quickly snapped up.

Current market conditions, particularly in these two cities, reflect an entirely different scenario. Despite a glut of willing buyers, and an equal glut of distressed condo units on the market, many selling at “bargain” prices, sales are not overwhelming, and the inventory of unsold units remains high.

Does that mean that investing in Las Vegas condo units as rental investment properties should be avoided, particularly during these difficult economic times? Certainly not! Many of these kinds of investments can still become profitable, if careful planning and forethought are the guidelines used before making a purchase commitment.

Forecasting the future of any investment is never a sure thing, particularly in a downside marketplace, with no firm indications as to when and to what degree an upturn will occur. However, investment knowledge and skills, backed by reliable advisers will certainly maximize the chances of an investor making the right choices.

Condos are still popular with young professionals and retirees, and offer many amenities not available to the average apartment dweller or single-family homeowner, such as workout rooms, spas, swimming pools (sometimes more than one), tennis courts, concierge services, secured parking, building and condo unit security systems, libraries, card rooms, a clubhouse, and, balconies, city,  or mountain views, and more.

Another big plus for many condo dwellers, is they do not have to deal with the many maintenance issues involved in single-family home ownership. Some condos are part of a mixed-use development complex, with retail shops and restaurants on the premises.

Investing in condo conversions, however, are unlikely to offer the same profit potential as complexes designed and built as condominiums. Condo conversions are simply apartment buildings, with units originally rented on a lease basis, and are now tenant owned.

Cosmetic changes, simply painting the premises and possibly landscaping the property may be the only upgrades from apartment complex to a condo conversion the owners are willing to make.

Chances are, the building is an older structure and may have expensive plumbing, electrical, heating, cooling and structural problems in the near future –or sooner.

Overall, although a condo investment may not realize the future value appreciation of a single-family home, they are normally less expensive an investment, and with careful investigation and planning, a good way to leverage your real estate investment dollars.