If in the event

Started by LetA • 10 replies • 234 views

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LetA (Nevada)
Posts: 2,679

Posted:

If in the event an HOA goes into receivership, how much will assessments typically be raised?

CathyA3 (Ohio)
Posts: 6,299

Posted:

Depends on how much you have to pay the receiver, which will depend in part on how much that person has to do. A small community with no amenities and nothing major wrong with it (ie. they're in receivership because nobody will serve on the board) is much less work than a large community with amenities that is having financial or legal problems.

Receivers are well paid and can even earn more per hour than an attorney. It's not unusual to see assessments double, but again that depends on a number of factors.

The other thing to keep in mind is that it costs money to petition the court to get into receivership, and it will cost more money to petition the court to get back out of it. These expenses are often on the homeowners since there will be no functioning board at that point. Aside from these acts, the homeowners will have NO SAY in how the community will be run. They'll just be handed the bills, which they must pay or risk foreclosure.

You really really really do not want to go into receivership if you can avoid it.

DeanJ
Posts: 1,786

Posted:

In a large HOA where the fees are better spread, not as much as in a very small HOA.

CathyA3 (Ohio)
Posts: 6,299

Posted:

The fees may be "spread out", but there is more work to be done. And receivers often charge for their time by the hour (as with a lawyer's billable hours). It's foolish for a professional to quote a flat fee without being fully informed about what the job actually entails.

KerryL1 (California)
Posts: 14,550

Posted:

Are you making any headway, LetA, in convincing other ownrs to be on the Board???

SheliaH (Indiana)
Posts: 6,964

Posted:

As other have said, you want to avoid receivership at all costs. Running the numbers is a good thing, but since that'll vary by community, you might want to see if you can run a few numbers breaking down the court costs, attorneys fees, receiver fees - plus the usual operating costs and reserve funding to keep the community going, and then present that to your neighbors.

Here's a link to an article that may also snap your neighbors out of whatever stupor they're in that's preventing them from taking this seriously - https://www.lanesmgmt.com/hoa-receivership Hope this helps!

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By KerryL1 on 06/12/2024 10:51 AM
Are you making any headway, LetA, in convincing other ownrs to be on the Board???

No and the next step is getting fined by the state for not having a full board, I believe that fine comes from the NV-RED.
I have an inclination to resign because Gibbs slapping the PM would be frowned upon. If I resign there would only be one BOD and definitely
receivership if nobody steps up. I personally feel the community needs an new PMC along with a PM. We have a splash pad that has been broke since
2022. Nobody complained in 2023, this wasn't brought up until two months ago. Mix this with the constant problems at the pool with the electrical issues
and in 2020 the cable company installed a new node tap, jack hammered a sidewalk, installed an in ground vault and above ground box, laid a cold patch
instead of a sidewalk and five years later the cold patch remains despite several reminders to the PM. I've had it and the community deserves better
representation.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Leta

Refresh my memory. Are you or are you not still under declarant control?

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By LetA on 06/12/2024 4:47 PM
the next step is getting fined by the state for not having a full board, I believe that fine comes from the NV-RED.

I am not convinced. The Nevada Condo statute is silent on this point. The Nevada non-profit corporation statute only says that a board must have at least one director. The Nevada CIC Act (if applicable?) requires at least three directors. The NV-RED enforces the statutes and assists with dispute resolution when the governing docs are violated. The Nevada CIC statute says the NV-RED can seek a receiver only under certain conditions. From the statute:

2. The Commission, or the Division with the approval of the Commission, may apply to a court of competent jurisdiction for the appointment of a receiver for an association if, after notice and a hearing, the Commission or a hearing officer finds that any of the following violations occurred:

(a) The executive board, or any member thereof, has been guilty of fraud or collusion or gross mismanagement in the conduct or control of its affairs;

(b) The executive board, or any member thereof, has been guilty of misfeasance, malfeasance or nonfeasance; or

(c) The assets of the association are in danger of waste or loss through attachment, foreclosure, litigation or otherwise.

See https://www.leg.state.nv.us/nrs/nrs-116.html

Notice how the OP, a long-time director, could not search his/her own statutes. The OP is frustrated with important repairs, involving safety, not happening, and rightly so. Directors are not paid. What is expected of directors today is ridiculous.

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By JohnC46 on 06/13/2024 1:38 AM
Leta

Refresh my memory. Are you or are you not still under declarant control?

Long past declarant control.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

LetA

FYI:

https://echo-ca.org/receivership-what-happens-when-association-fails/

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