I am so confused

Hello, I have been elected (I think) to an HOA board this month. But it is more complicated than that. We have 100 units in our HOA, however there is no HOA board and has not been since 2006, so a property management company has been running things since then. In October 2012 the company sent out election forms to the home owners to run for the HOA board. I as well as three others sent in the forms and a vote was held. There was a tie vote between me and one other person for the three board members. I was told that I would receive an e mail as to what was to be done about the tie vote. I received nothing and my written request to find out what happened with the vote went un answered.

Then on Feb 2 2013 I received an e mail from the company stating that I and two others were elected to the HOA board. No mention of the tie vote. Then suddenly all three "elected" board members were being pestered by the company to sign checks to the State. We all refused as we have not even had a board meeting yet. This went on for 20 days and suddenly "nothing". The company now keeps pushing the board meeting farther into the future and we only have 90 days to have a first board meeting after an election. So even the "election" date is in question.

I have no idea if the election was even legal as there was a tie vote and have no idea how it was broken, if it ever was. Talking to the company is useless as they won't even answer the phone or return e mails. I feel as do the other board members that something is not right. I am asking the forum for some direction. I don't want to resign but I have been thinking about it. Thanks.

I have done that and there is no mention of what to do in a tie vote. Plus it is unclear according the state laws how to procede in an election if there is no HOA board. The state HOA Laws and rules just seem to assume there is an existing HOA board, which there is not. No mention of how an election should be conducted if there is no HOA board or just who is to conduct the election. Seems to be a gray area.

If there is a tie vote, either one of the candidates removes their name from race or a runoff election is held.


Corporate laws, which would apply if you are incorporated (most associations are), typically specify that a Director continues to serve until someone is elected to replace them or they resign. I'll bet on paper, there is someone named to the board.

Check your States Corporation Commission's web site to see who was actually listed as officers/Directors in the last annual report.

They might not have had meetings but they are still responsible.

If nobody was listed, then any member of the Association may petition the court for receivership.
the Receiver will run things until they can organize an election and have new Directors elected.
It's likely that this is what the management company was doing without the court order.

OH - Good call on not signing the checks.

Well, Perhaps one of the first things the new Board should do is solicit bids for management services.

I would also ask to see this agreement the Management company says they have with the State.

Prior to soliciting bids you should get the finances in order.
The Bank account/s should be in the Associations name at a bank of the Boards choosing.
Only Board members should be authorized (via the Banks signature card) to issue checks (not the management company). Note: anyone can make deposits.
An audit by an outside firm (solicit bids) should be done as well (this can be pricy. If you can't afford an audit, have a financial review done. see this thread for more info).

Newton,

This is all uncharted territory for me, but allow me to make a few suggestions:

First, the board runs the association and hires the management company. Your situation sounds backwards, with the management company running the whole show. You and the other persons elected to the board should decide on a meeting date, give notice as required by law, and then hold a meeting. It is not the management company's job to schedule meetings.

Second, the first topic of the first meeting should be hold a real election. I hate to say this, but your claim to being on the board is rather dubious just because of how the election was held. Appoint an election committee, read the statutes, bylaws, and covenants, and then hold the election asap. This will legitimize your position on the board.

Third, the second topic of the first meeting should be to find another management company. The one you have sounds pretty screwed up. Since they claim to be running things under the authority of the state, demand a copy of whatever documents they have to prove this.

Fourth, demand access to your association's funds from the management company. All the funds, including all reserve funds.

Fifth, use some of the funds to hire an attorney to advise you on how to proceed going forward.

Sixth, hire a CPA firm to audit your association's records. I strongly suspect that all assessments the owners have paid have gone into the pockets of the management company.

This sounds like one very messed up situation but it can be remedied. Good luck.

Thanks Larry,

I agree.

There is the problem first off. I don't have much faith in the election as it seems all wrong to me. Nothing makes any sense. I have the feeling that if we were to have a board meeting it may not be legal and that is the last thing anyone wants.

I do think may be the best thing to do is resign and start all over with the help of the state of Nevada. If I don't get elected, then I don't get elected. Do it right or not at all.

I really don't trust the present management company seeing what I have seen.
Yes we really do need a new HOA management company. As you say they work for us, not us for them. I do think the homeowners are getting the short end of the stick here as really there is not much here to take care of.

Everyone has been so helpful here, I feel better already.

Thanks,

Newton

I understand what you are saying, but I would feel better if it was done correct. Here in Nevada the state is very strict about HOAs now and if it is not done correctly, all the hard work could be for nothing. It would not be fair to the homeowners to do it any other way than correct. The law here says in part that the HOA board has a meeting right after the election. It has been five months without a board meeting.

There is a 90 day limit between the election and board meeting which has been exceeded, depending on how you look at it. Plus the election has several problems. A good lawyer could tear into it and the whole thing fall apart. My first duty is to the homeowner to make sure the correct procedure is followed. No HOA is better than a defective HOA. And there are plenty of those here already as some of the largest HOA fraud cases in the country was right here in Nevada. There are a lot of people in prison because of it all because it was not done right.

I agree with Larry. If the election is in question, then everything else is too. I would expect as a homeowner that the election of the Board members be without any questions. The election I and the other two people was involved in is nothing but questions.

I know some people don't trust the state government, but I trust a commercial property management company that has lots of money involved even less. The state has to go by the laws of the state, the management company makes up the rules as it goes along and has everything to gain by twisting the rules and laws, use well meaning people to do their dirty work. There is more to this I can't talk about here, but I can tell you that this company is sleezy at best.

I will take my chances with the state.

Newton

Glenn is correct. It sounds like the court could have assigned this MC to your HOA for failure to do it on your own. Find out first. Another thing is that there are no "state inspectors" who have some kind of ruler in their hand going to smack your wrist for breaking some kind of "HOA law". HOA's are typically managed within the group of owners/members of that HOA. The CC&R's are filed at the COUNTY level. The by-laws internal (or can be filed somewhere else but not required in most states) and the Incorporation documents are filed only at the state level. Those just recognize you are an incorporated HOA and allow you all to work as a corporation.

So go have new elections and a special meeting to sort things out. Hopefully you will get elected and can restart things from scratch. Starting with shopping for a new MC and understanding they are supposed to be a CONTRACTOR to your HOA NOT running things. (unless you let them or the court assigned them).

I think your right Tim...There has to some reason here the state is involved. It is hard to tell if they were officially ever turned over by the developer. It would make sense if the developer had filed bankruptsy and left the HOA in the state's hands. The state connection just doesn't make sense otherwise. However, it being Nevada there could be something to that.

A trip to the courthouse and online may be in order here. A copy of the CC&R's from the County and see what the state has online on their Articles of Incorporation documents. The by-laws may or may not exist as they are not necessarily required to be filed anywhere. They may find the Archectual Control Committee documentation available somewhere instead if it exists.

This is going to be alot of research and work. If you all decide to hire a lawyer, then have one familiar with contractual or corporate laws. You do NOT need a real estate attorney here. HOA exclusive lawyers can be expensive but it's your pockets. Understand though when hiring the lawyer the money comes out of the dues money collected. So be prepared to up the dues if possible or have a special assessment. However, much of this can be done on your own if your savvy enough.

It is a good thing just to get the election portion squared away so the poster feels more comfortable. Even though there's no real paperwork involved in recognizing board members other than maybe the meeting notes. The officer's names may be allowed to be on the bank's signature card. Otherwise most HOA's don't have a formal way of recognizing board/officer positions.

Good luck!!!

The Nevada Ombudsman for Owners in Common-Interest Communities and Condominium Hotels shall:
•Assist in processing claims submitted to mediation or arbitration pursuant to NRS 38.300 to 38.360, inclusive;
•Assist owners in common-interest communities to understand their rights and responsibilities as set forth in this chapter and the governing documents of their associations, including, without limitation, publishing materials related to those rights and responsibilities;
•Investigate disputes involving NRS 116, NRS 116B, or the governing documents of an association, and assist in resolving such disputes;
• Assist persons appointed or elected to serve on executive boards of associations to carry out their duties; and
• Compile and maintain a registration of each association organized within the state which includes, without limitation:

o The name, address and telephone number of the association;

o The name of each community manager for the common-interest community, and any person who is authorized to manage the property onsite;

o The names, mailing addresses and telephone numbers of the members of the executive board of the association;

o The name of the declarant;

o The number of units in the common-interest community;

o The total annual assessment made by the association.

o The number of foreclosures within the common-interest community that have been completed and that were based upon liens for unpaid assessments or fines; and

o Whether or not the study of the reserve has been conducted, and if so, the date on which it was completed.

Good advice.

Lead or follow but at least get the F out of the way.....LOL

Well yes you can reform the HOA. You all just have to reform it and go to the state to request going back to the owner control. Which should take a lawyer and going to court. Then your HOA can choose if it wants a MC or do it on their own.
Another option is to petition the court or state to change MC. That is a better option. No one says you can not still change the MC. Just have to go to who assigned them and request it.

In most states, the only way what you described would happen would be for someone to petition the court for receivership and the court to grant it. It might also be possible for some state administrative agency to assume emergency control of an association. In either case, there will be a record of whatever order the MC claims to have. As an owner, you are entitled to have a copy of whatever order was issued. The previous owner(s) of your home should have been served with some sort of notice and an opportunity to respond before either the court or administrative action took place. Normally, part of a receiver's job is to get the organization back on its own feet. It's hard to imagine that in seven years the MC company has not done that.

Since the MC claims to be acting for the state, I would ask them for a copy of whatever order they claim to be their authority. It does not matter if you are a board member or not; you have standing to make this request as a homeowner. You should also check the county recorder's office to see if any copies of notices or orders were filed. It would seem that if you purchased property subject to recorded restrictions and some branch of state government has removed control from the owners to the MC that there ought to be some sort of public record.

Yes it is a mess for sure and crooks for a MC don't help any. They make plenty from the home owners each month. I am going to try to get with the state HOA department and see what we can do to get things back where they should be. They have people there that their job is to get HOAs going again since the Nevada housing crash is about over and property values are now going back up. (slow, but up)

Thanks for all the help here. I feel better already.

Thanks Elaine,

I just found out from the Nevada State web site that our HOA is in default and has been for a while. The whole thing is depressing Also I don't think the election was valid according to the state laws. We have not even had a board meeting yet either as one board member is already signing checks on their own with direction from the MC.I wished I never got involved with this. I did not know it was such a mess.

Hi Larry,

I don't know what it means. It just says "status default". Without access to the books, I have no idea. I think it will require a lawyer to find out where to go from here. The MC claims that they can't show you the books because there is no board, but now we have a board but can't get a meeting date established because the MC keeps dragging their feet.

Also I have only talked to one other board member so far. The other board member has never talked to me or the other board member so I don't know what that persons status is, but did sign a HOA check on their own.

It looks like April before a board meeting, but I would not bet on it. And now the other board member that was talking to me won't return any e mails. So I am on my own I guess. Never seen anyone in person yet and the election was last year. A hell of a way to start out. I am burning out.

Resigned. Too crazy to deal with.