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11/02/2010 4:25 PM  
Hello to anyone reading this

Our 4-plex consists of three owners and one unit in foreclosure (since April 2010 and is bank owned).

We have governing CC&R's, By-Laws and are subject to the provisions of the Nevada Revised Statutes relating to Homeowners' Associations and to the laws of Nevada.

My husband and I are currently in a short sale contract with buyers. After we signed our contract, our HOA called a BOD meeting. My husband and I could not attend and only two board members were present. Note: the bank did not have a representative there either. At this meeting, the two board members voted in a special assessment of $2,000 PER UNIT to replenish the reserve money. Total $8,000. According to them, this would be used to replenish the reserve for "future" building repairs and insurance money.

We were never informed this assessment would go to vote. It was listed on the agenda as New Business. The special assessment is due by November 30th. If the assessment is not paid by then, the HOA reserves the right to place a lien on the property and force foreclosure.

Also voted in was a reserve study of $950.00 to be performed. Again, no indication that this was a topic to vote on.

My husband and I are not in a position to pay $2,000 by the end of the month and we can not ask our buyers to foot the bill since the sale has not closed. The buyers have told us they saw on the HOA website an assessment was implemented and asked how and why if a reserve study was never done to determine money needed. Why did the HOA put the cart before the horse? They are now a little skeptical about this HOA..... especially since I have asked a few other questions about the proceedings of the meeting and could not get answers from the President to pass along to the potential buyers.

In order to keep good faith and show that we are good people, we presented a payment plan option to the HOA. We would start paying until the new buyers took possession of the condo and once the new buyers were in possession of the unit, they would continue to pay off the special assessment. (We expect the sale to close by 30 November, latest end of year). The President of the HOA shot our offer down and threaten a lien and force of foreclosure. Note: our buyers, our realtors and ourselves recognize no major repairs (if any at all) will be done over the 8 months because of winter weather so we "assumed" a payment plan would be acceptable. We were wrong

I have called a few attorney's in Nevada for consult. Unfortunately, we must pay to have our CC&R's & By-Law's reviewed ($1,000) so they may see if what was done was ethical. This is a lot for us at this time and we're running out of time.

Does anyone have "any" NRS 166 experience with small HOA associations? I heard smaller HOA's are exempt from certain statutes but I also heard if the By-Laws and CC&R's state the HOA is govern by NRS, then NRS applies. Very confusing for me.

I would like to know if a special assessment for building repair and maintenance can be approved without a reserve study.

I would like to know if the Board of Directors can hold a meeting (legally) with only two board members.

I would like to know if the board of directors can vote another board member to role without the newly voted in member's knowledge. (I was told by the secretary of state that I was put on the board Jan 2010. I did not know this. There was no vote or notification of this action!?!).

I would like to know if an HOA can file a lien on a property while it is in escrow AND force a foreclosure! Note: our mortgage company won't consider paying the lien because 1) it would be applied post contract signing (contract states no liens are present on the property) and they state an assessment of this nature must be validated by a reserve study.

This is a confusing case and I am trying everything possible (short of spending money we do not have) to find out what rights we have and save our sale of the condo.

Thank you for reading and thank you to anyone who might have advice.


11/02/2010 9:14 PM  

A lot of what you ask will depend on the exact wording of your governing documents. Therefore, I can only offer the following:

1. What do the governing documents say about notice requirements?

2. Is there separate notice requirements for special assessments?

3. What do the governing documents say on what makes a quorum?

4. Are there special factors governing quorums for special assessments?

Basically, if you are going to challenge this decision you will need to contact an attorney to write the letter to the board to see if the board will back down. If they do not, you will need to fight the issue in court. All of this will take time, money and energy. Since you indicate in your post that you are short on time and didn't want to pay the $1,000 to the attorney to review the issue, you may be stuck.

You indicated that your buyers are aware of the special assessment. Therefore, I expect that they may back out of the deal if it is not paid in full. You also indicate that you find it difficult to pay the special assessment by the end of the month. Additionally, you indicate that you are in a time crunch. Therefore, the only options I can think of for you is:

Request a meeting with the Board to get approval to pay the assessment out of the proceeds of the sale. Have a written agreement between you and the Board taken to the title office and have the assessment written into the HUD-1 document so the title company will directly pay the Association. This way, the Association gets paid (even if it's a little late), the buyers are happy because the assessment is taken care of and you can settle back that everything is taken care of.

The only other choice I see would be to take the chance on losing the sale and fight the Association.



11/03/2010 9:03 AM  
Thank you for your reply Tim.

I doubt my husband and I can challenge this with legal assistance due to the loss of his job and lack of funds. We put our condo up on the market after he lost his job a second time in 12 months. We received an offer of short sale and know there will not be any funds from the sale that will be able to pay for the assessment (which is why I believe your suggestion above can not work). I appreciate your input more then you know. It's nice to know someone is trying to help.

Regarding the board, I must reiterate that I had no idea I was put on the board, otherwise I would have addressed the BOD meeting.

It's a messy situation and the last remaining board member along the secretary/treasurer who just resigned, will not forgive a late payment of the assessment. They wish to enforce their right to a lien and force to foreclosure. I do not understand why, especially with one condo already in foreclosure.

I suppose the only way we can fight our way out of this paper bag is understanding what sections of NRS 116 apply to this 4-plex, but no one seems to be able to help guide us. Let this be a lesson to everyone out there. Get to know your CC&R's, By-Laws and state statutes.

Thanks Tim. I will keep searching for answers and options as well as keeping my fingers crossed someone out there might know a little bit about NRS 116.


Our CC&R's and Bylaws state the following re: quorum:

Section  5.   Meetings  of  the  Board.    Immediately  following  the  first   annual  meeting  and  each  annual  meeting  of  the  Members  ,the  Board  shall   hold  a  regular  annual  meeting  at  the  same  place  for  the  purpose  of     organization,  election  of  officers  and  the  transaction  of  other  business.     The  Board  may  hold  additional  regular  meetings  as  it  may  determine.  

Section  7.   Notice  of  Meetings.    Notice  of  the  time  and  place  of  all   meetings  and  in  the  case  of  special  meetings  of  the  nature  of  any  special   business  to  be  considered  shall  be  given  to  each  Director.    For  all   regular  annual  meetings,  written  notice  shall  be  given  to  Directors  by   first-­class  mail  at  least  fifteen  (15)  days  prior  to  the  scheduled  time   of  such  meeting.    Notice  of  the  time  and  place  of  all  meetings  of  the   Board  shall  be  posted  at  a  prominent  place  or  places  within  the  Common   Areas.    No  notice  need  be  given  to  any  Director  who  has  signed  a  waiver   of  notice  or  written  consent  to  holding  of  any  meeting.  Whenever  any     Director  has  been  absent  from  any  meeting  of  the  Board  and  notice  of  such   meeting  has  been  duly  given  to  such  Director,  an  entry  in  minutes  to  the   effect  that  notice  has  been  duly  given  shall  be  made.    

Section  8.   Quorum.    A  bare  majority  of  the  Board  shall  constitute  a   quorum  thereof.    Every  act  or  decision  done  or  made  by  a  majority  of  the   Directors  present  at  a  meeting  duly  held  at  which  a  quorum  is  present,     in  person  or  by  telephone,  shall  be  regarded  as  an  act  of  the  Board.


Section  1.   Membership  Assessments.  Maintenance  Assessments,  Special   Assessments  and  Personal  Charges  as  provided  for  in  the  Declaration  shall   be  paid  by  the  Members  of  the  Association  at  the  time,  in  the  manner  and   subject  to  the  conditions  and  limitations  set  forth  in  the  Declaration,   and  the  Board  shall  fix,  levy,  collect  and  enforce  such  assessments     at  the  time,  in  the  manner  and  subject  to  the  limitations  set  forth  in   the  Declaration.    

Section  2.   Enforcement,  Lien  Rights.    For  the  purpose  of  enforcing  and   collecting  assessments,  the  Association  shall  have  the  lien  rights  set   forth  in  the  Declaration,  which  lien  rights  shall  be  enforceable  by  the   Board  in  the  manner  set  forth  in  the  Declaration.    The  Board  shall  also   have  and  be  entitled  to  exercise  all  other  rights  and  remedies  set  forth   in  the  Declaration  or  otherwise  provided  for  at  law  or  in  equity.


11/03/2010 11:13 AM  
Linda, read the conditions and limitations set forth in the Declaration regarding Special Assessments to determine if they were followed. This will probably include holding of a valid meeting (properly called and a quorum present) and obtaining approval of a specified percentage of all owners.

Re: "Section 1. Membership Assessments. Maintenance Assessments, Special Assessments and Personal Charges as provided for in the Declaration shall be paid by the Members of the Association at the time, in the manner and subject to the conditions and limitations set forth in the Declaration,"


11/03/2010 11:22 AM  
Hi Roger.

Thank you for taking the time to reply.

Exactly what I posted in my prior email re: assessments, liens, etc... is all that is written in our bylaws and CC&R's. It's that simple. Sadly enough, it doesn't go any further beyond what I copied over and pasted to the forum.

I am still sifting through everything trying to make sense of it but finding it to be a challenge.

Thanks again Roger!
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