QUESTIONS YOU HAVE ASKED ...
The information provided on this site is designed to help you deal with managing the association. It is not meant, however, to replace the advice of your associations' professionally certified community association manager, attorney, CPA or others engaged by the association. Since all association documents are different and circumstances differ, you should always check with your legal counsel. This information is intended to provide you with different approaches to the many problems and issues that you face on a daily basis. Of critical importance is that you ensure that the professionals you engage for the association are experienced and practicing (preferably specializing) in the Community Association Industry.
Submit your questions to "I Have a Question" and they may be posted on the site. If you would like a response sent to you, please provide a return email address.
User Questions & Answers (below)
USER QUESTIONS & ANSWERS (Sent in or called in )
If a homeowner not in good standing (behind on assessments) votes for a person running for the board....can his/her vote be denied because of the "not in good standing" situation? Or, does that vote have to be counted regardless? ... UNLESS the documents state that a member has to be in good standing to run for the board they can run for the board, but the board has to have held a hearing and notified the owner in writing that they are not a member in good standing AND the owner disclosed it when running for the board that they were not in good standing. If the documents don't say they have to be in good standing, they can still run for the board, but must disclose it to the owners. If they don't disclose it, they cannot be prohibited from running for the board, but someone could file an affidavit with the Ombudsman's office as that person violated the law.
Is there Life after Living in an HOA? ... I don’t know as I haven’t wanted to try it. I like living in an association and find it protects my property values. See my article on Why I Live In AN HOA in the Library section of the website.
Where do I find what is required to have a recall of our board? ... There are two spots that you need to check for this question. One is for what is required to call a special members meeting and the other is the specific requirements of what must happen at this meeting, etc. See 116.3108, Section 2 and 116.31036.
Does the law require that our reserves be fully funded? ... The law requires that your reserves be adequately funded. It further defines what adequately funded is in NAC. 116.425.2. As used in this section, “adequately funded reserve” means the funds sufficient to maintain the common elements:
(a) At the level described in the governing documents and in a reserve study; and
(b) Without using the funds from the operating budget or without special assessments, except for occurrences that are a result of unforeseen catastrophic events. “ [Emphasis Added]
In my experience, however, the question you should be asking is what the method was used to prepare the study. As adequate is defined as “without special assessments”, baseline studies are totally based on special assessment at some point in the study. Threshhold and full funding studies are the preferred methods by knowledgeable professionals as long as the threshold is not set too low and is set at least above 70%.
What does it take to dissolve the association? ... What do your documents say? It is normally buried in one of your governing documents (not the rules). If the association is a condo, it is next to impossible to dissolve as how will the units be divided up and who will pay for the maintenance of the areas jointly used, i.e. stairs and landing, etc.
Unless the City or County will take responsibility for any streets, parking lots, parking structure, landscaping, signage, and other maintenance responsibilities how will the costs be split in ownership against the title. An attorney should be able to walk you through the process, but will most likely point out the areas of concern above and MANY more.
The manager of our HOA keeps asking me if I have talked to my neighbor(s) when I call to complain about violations, etc. Is he just being lazy? ... Having managed associations for 20 years and worked in the industry for over 30, I know that once you “rat out” your neighbors and he or she gets a letter from the association, things escalate. The manager will try to verify those violations that can be verified so that “a neighbor reporting the issue” doesn’t come up. At times, however, that is not possible. If it is clear that neighbors are complaining, one of the first things that I used to hear from owners was “why didn’t my neighbors just come over and talk to me?” If the association can’t validate a dog barking in the middle of the night, the complaining party needs to be prepared to testify as a witness if necessary, if the association takes enforcement actions. You can’t be shielded totally. In our work environment with 24 hour work shifts, the owner of the dog may not even know it is happening.
Sent in by DW ... Question? Regarding Bids and Board Actions ... Is it allowable for a Management Company to solicit and receive email votes from a Board for a large landscape maintenance expenditure? It was not for a health or safety matter it was for thatching and re-seeding. Following a reported majority voting affirmatively the work totaling in excess of $20,000 was preformed. There were no bids or estimates solicited from other companies. There have been two attempts to ratify this expenditure at subsequent Board Meetings which failed to pass.
Response ... NO! ... If it is so important to do outside of a meeting, talk to your attorney & see if he or she can support it.
Question? Regarding Meeting Notices ... I was reading with interest your web page article regarding common interest community meetings. You stated an association cannot combine the meetings of the board and the meetings of the members. I cannot find the section regarding this in NRS116. Can you direct me to the correct article? Also what can be done after the fact if the two meetings were combined?
Response ... Because there are laws for the two different types of meetings with notices and distinctly show them as separate, you have to treat them as separate as they are different bodies. The Board and the Members. NRS 116.3108 talks about Members Meetings (Owners) and 116.31083 talks about meetings of the board. Their notice requirements are different, the requirement to mail the agenda with the notice is different, etc. If it was done wrong in the past, unless someone challenges it, just don't do it in the future. If someone does, you should go back and make sure that the notice requirements (times and copies) were followed for both meeting types and if not followed, redo.
Question: Can a properly noticed board meeting be adjourned or suspended to complete the agenda without it being noticed again ?
Response ... Yes! As long as no other items are discussed that were not on that agenda and the date, time and place were decided before the meeting was recessed (not adjourned, but recessed)
Sent in by SB ... Question? Regarding Practicing Law Without A License ... Is it legal for the manager to give legal advice to the board and/or to owners in the HOA?
Response ... In Nevada it is unlawful to practice law without a license. Only licensed attorneys can give legal advice, and anyone relying on the legal advice of their manager is certainly setting themselves up for potential problems if they do so.
Do members of the Board expect their manager to give them legal opinions? Yes! Is it appropriate? No, and the manager could get in trouble on several levels. There are attorneys out there just waiting to file a claim with the Nevada bar against a manager who they feel has "taken business away from them" in giving the advice.
What if the Board relied on the advice and had legal issues? It has happened when a manager told the board that they didn't need to involve the attorney in arbitration as it was a really casual event. When statute of limitations were missed because the board failed to appeal the arbitrators negative decision in time to take it to court, the manager was blamed for their not getting an attorney involved early on. The association did not get the results they wanted, presented no witness and did not provide the information that the very knowledgeable arbitrator could have used in reaching the decision.
Another situation can arise when the manager calls the associations attorney first vs. involving the insurance company for defense. Care should be given on any potential litigation as many insurance policies may have issues with their getting involved after actions have been taken by any one other than their insurance lawyers.
Have the conversation with the insurance broker and the attorney before a claim arises not after to eliminate problems.
GENERAL TOPICS (back to TOP)
WHERE CAN I FIND PROFESSIONAL HELP ... We are a small self-managed townhouse development in a small town. We don't seem to have a wide choice of industry professionals in our area, where can we get the help we need?
ANSWER ... There are a considerable number of help sources. (1) Locate a professional community association manager through CAI, CAMEO, or NACM. (2) Membership in industry groups such as CAI, ECHO (Ca.) or other similar groups that may be local to your city or area. (3) Internet HOA help sites such as HOASupport.com. (4) A Management Audit.
WHAT IS RISK MANAGEMENT ... I keep hearing the term Risk Management used and I would like to understand what it really means.
ANSWER ... Risk Management used to be used in reference to having proper and current insurance protection for your association and board. Now, due to the over-litigious society we live in, it literally encompasses everything you do and, possibly don't realize you do, as a member of the board. The way you write your meeting minutes, the way you word board correspondence to owners, the way you negotiate contracts with vendors, who signs the contracts, who signs the checks, who mails the checks, how you conduct your board meetings, etc, etc. There are even professionals who now do nothing but Risk Assessment for community associations. Many insurance companies have people who do this for their company. The best approach is to have an independent Risk Manager do a Risk Assessment Audit of your association independent of the insurance company.
WHAT IS THE CPA LOOKING FOR? ... What is the Association's CPA looking for when he or she reads all of the minutes during a review or audit?
ANSWER ... The auditor is looking for proper documentation and authorization of financial transactions, compliance with the State Civil Statutes, authorization from the Board for reserve transactions and authorization from the Board to enter into contracts, among other things. For more details on minutes and what they should and should not contain, please check our library page.
WHO DO WE GO TO IF WE SUSPECT BUILDING DEFECT ISSUES ... I am a new board member in an association that is 5 years old. The board has not been very pro-active in dealing with developer problems in the development. Who is the appropriate person to call first if we suspect building defects?
ANSWER ... If you are contracting with a manager, your manager should be your first point of contact. They will guide you in that process. If you are board-managed (and the owners are in control of the association), your attorney should be able to provide direction. Be sure that your attorney is familiar with community association law and, if construction litigation is involved, that he/she is experienced in HOA construction defect litigation. Some things to consider .... (1) Statute of limitations for your state, (2) Degree of construction problems vs the cost to litigate vs the money you may already have to correct those problems if they are not severe. A good attorney will help you work with the developer to correct problems, where they can, before just taking legal steps. The law changed in 2015 to limit how and when you can take action so quickly consult with you attorney.
WHY DIDN'T THE REAL ESTATE AGENT TELL THEM? ... Why don't real estate agents tell new buyers more about the realities of living in community associations?
ANSWER ... For the same reason that developers usually don't oversell the concept of community associations, real estate agents and others involved in the home sale process prefer to accept the fact that it's there and only expose it when necessary. Developers tend to keep initial assessments artificially low since assessments are not an attractive "plus" in the sales transaction. Usually, they are explained by the presence of a pool, tennis court, paths or attractive entry gate. It becomes a necessary cost to "maintain" the "physical assets" of the community. Little is said about the administrative or restrictive side of association living and management.
Real estate agents who deal in your area can be contacted and provided with information regarding your association. The information that you provide to the escrow company should also contain specific information about your association. Most states require that owners disclose certain information at that time. Since that task is usually passed to the board or manager, it is a very opportune time to provide all rules and regulations and other relevant information that can help the new owner better understand the ins-and-outs of living in your association in a convenient usable format such as a binder. Other ways of informing owners once they live in your community are ... (1) Welcome meeting/event for new owners, (2) Newsletter articles detailing responsibilities and risks of not disclosing information when selling your home, (3) Continually reinforcing rules and policies in newsletters and mailings throughout the year, (4) Town meetings or open houses, (5) Welcome committees & packages for new owners.
WHAT IS PROPER INSURANCE? ... How do I ensure that our association has proper insurance coverage and that our insurance company is qualified and industry knowledgeable to manage our insurance needs?
ANSWER ... (1) Have a Risk Management Audit performed on your association, (2) Check CC&R's & By-Laws for any stated insurance requirements, (3) Check current state law for any mandated requirements, (4) Request certificates of insurance from your association's insurance company, (5) Meet with the insurance agent and ask pertinent questions, like ... (a) How many other association's do you insure?, (b) Do you specialize in association insurance?, (c) Walk the development with your agent and/or their risk manager, (6) Purchase CAI's GAP report on Community Association Insurance. (7) Attend industry classes on insurance.
If you don't have proper or adequate insurance, your association (the owners) is self insured. (See the Insurance Checklist on the Forms Page (under Insurance heading).
CAN I THROW THESE RECORDS AWAY NOW? ... When is it time to throw away old records? Do we have to keep them indefinitely?
ANSWER ... All of the various documents that are involved in association governance and accumulate over the years have different retention requirements. Check your state laws as some states (Nevada for one) require ALL documents to be kept for 10 years. In other states, some documents can be discarded after only a year, others may need to be kept indefinitely. Most of these retention requirements have been agreed upon by those within the industry based upon recommended practice and, in many cases, to protect the association in the future IF that one case may arise where the information might be needed. Check our Library page for additional information on this subject. Legal counsel, CPA & Insurance Agent should be consulted before you destroy records after the 10 years in Nevada.
WHO SAYS I CAN'T FLY THE AMERICAN FLAG? ... Does the association have the right to tell me I can't fly my American flag anytime I want? Isn't this still America?
ANSWER ... Yes, this is still America. Unfortunately, you live in a planned development and certain controls still apply even though you do have a constitutional guarantee of free speech. The Association cannot tell you that you cannot fly the flag, but they can reasonably regulate the method of display and size of the American flag. Placement must be on your own property, not the common area. To prevent problems between associations and owners like yourself over patriotic or religious displays, it is best to review the documents and establish rules. For example: (1) Check your documents (this includes rules which have been adopted). Determine whether the Board has the authority by document to control such displays. Do the rules require board approval for yard or door displays or restrict the size? (2) Check with the association attorney. Because the issue is so emotional, ask the association attorney if regulating the display of the American Flag runs afoul of the constitutional guarantee of free speech, (3) We recommend that the Board adopt a flag rule. There is protocol for flying the American flag. Any rule should take those into consideration. Display is regulated by United States Flag Code, Title 36, Chapter 10, United States Code, a guideline for proper etiquette. (4) The rule, after adoption by the Board, must be mailed to all owners . The most reasonable rule would be one that regulated the size, placement, and materials of any poles which could be used to display the flag. It could also require approval from the Architectural Committee before any permanent method of displaying the flag is installed in a condo since you don't own the exterior of the unit.
BEWARE! ... The media loves to take on "abusive" Boards who threaten the owners' Freedom of Speech. A "reasonable" Board will keep that in mind and adopt a "reasonable" rule for displaying your flag.
CAN I DISPLAY POLITICAL SIGNS? ... Does the association have the right to tell me I can't reasonably display political signs on my lot during election periods, particularly during national elections? Isn't this "Freedom of Speech".
ANSWER ... Yes, in Nevada, one sign for each candidate or item on the ballot for consideration is permitted.
In other states, this may still be a controversial issue which has not yet been "tested" in the courts or legislated on. Reasonable boards in those states, however, will establish rules which will allow for the display of political signs, but limit size, quantity, placement and length of time the sign(s) may be displayed.
ONE OF OUR BOARD MEMBERS HAS A CONFLICT OF INTEREST ... The treasurer of our association works for a large brokerage house and is strongly suggesting that the board invest some of our reserve moneys in uninsured funds. What should I do? The association is self-managed and I'm only one of the board members and the others aren't very well versed in this area either. I just don't feel comfortable about it.
RESPONSE ... This is clearly a conflict of interest on the part of the board member who is the treasurer and making recommendations as to how to invest the association's reserve moneys. There is also a safety issue in that any association funds should be invested only in safe, insured investment vehicles. FDIC insured money market funds, Bank Certificates of Deposit, etc., are all SAFE places to "store" your funds while they also collect some interest. There are many banks who specialize in this area and know how to protect your money while maximizing the interest. See what your state requires as some are very specific. Nevada is very specific on how money can be invested and held. Just make sure CD's don't go over the $250,000 max insurance limit.
SHOULD OUR BOARD ADOPT A CODE OF ETHICS RESOLUTION TO DEAL WITH REAL OR PERCEIVED CONFLICTS OF INTEREST? ... Since everyone was hopefully taught some moral values as children and develop new standards as adults, most people are on different pages when they volunteer for the Board. Discussing how the board deals with these differences and coming up with a document that each board member can live with will help the board proactively dodge bullets because of these inner differences. The board MUST keep their eye & ear on their huge responsibility as fiduciaries and put their personal agenda's aside when reaching decisions. See the sample fiduciary duty resolution under the forms section.
MY NEIGHBOR'S TREE IS A PROBLEM ... My neighbor has a large tree that overhangs my side fence and is continually dropping leaves and other debris in my back yard. He has said there's nothing he can do about it and does not want to have the tree pruned back. The association has said that there isn't much they can do about it either. They said it is a "neighbor to neighbor issue", not the association's.
ANSWER ... This is a very common situation. Very often it involves something other than a tree, however "neighbor to neighbor" issues very often drag the association into the middle.
In Nevada, if the documents have a nuisance prohibition, the association should get involved. If this becomes a serious conflict, Clark County & Washoe County have free mediation. Contact them for more information.
... Clark County - Neighborhood Justice Center
... Washoe County - Neighborhood Mediation Center
Nolo Press publishes an excellent book entitled "Neighbor Law".
BOARD MEMBERS AND DUTIES (back to TOP)
MUST SOMEONE WHO SERVES ON THE COMMON INTEREST & CONDO HOTEL COMMISSION LIVE IN A CIC IN THIS STATE? (bmd1)
In 2017, the law changed to require that all commissioners serving on the commission as H/O representatives must live in a unit in the State. Why would we want someone who just happens to have had issues in the past with an HOA serve on the commission if he or she doesn't currently own in this state? Serious problems have arisen & still could without this requirement.
ARE MEMBERS OF THE BOARD REQUIRED TO GET EDUCATION TO SERVE ON A BOARD IN NEVADA? Answer: In Nevada, NAC 116.405 states what the Real Estate Division or the Common Interest Commission will consider when determining if a board has failed their fiduciary duties as directors. Education is one of those considerations. If you've taken classes, almost all providers will give you a certificate of attendance. Keep them as proof.
Where can we find articles, books and other publications regarding most areas in the Common Interest Community Industry?
Answer: Community Associations Institute has a full library of books that you can purchase at member rates or non member rates. I have the full library as I have been able to use them often to solve problems or help me think through problems and their possible solutions. You find these publications at a www.caionline.org. The library in this website has a lot of articles written to help you find solutions and understand that there is no substitute to experienced industry professionals and their help. As fiduciaries, the Board has the duty to rely on experts when an issue is outside of the Board’s expertise.
Are there any designations that members of the Board can earn in our industry?
Answer: Community Associations Institute has a designation that members of the Board can obtain after being a member of the organization for one year, attend specific classes and attend a Commission meeting or write an article for the Chapter Magazine. Board members all over the State are working hard to attend all if the classes and meet the other requirements to get the Dedicated Community Association Leader, DCAL, designation. For more information regarding this designation call CAI at 702-648-8408. Several other Chapters are considering the designation. Sara Barry is willing to talk with the Board of any of the Chapters to go over the program. firstname.lastname@example.org.
COMMUNITY MANAGEMENT LICENSING AND EDUCATION (back to TOP)
How many States require a person to have a license to a manage a common interest community? Answer: There are several states who require an individual to have a license through their State before they can manage a CIC. Nevada, Hawaii, Florida and several others. Many other the States are currently looking at licensing in an attempt to solve many of the problems created by some (very few) bad managers. Even licensing can’t protect the Board’s from criminals and each Director should take serious care in understanding and reviewing all financial statements on a monthly basis. Research should be done as more & more states are moving to mandatory licensing.
How can I get a license to manage Common Interest Communities in Nevada?
Answer: Unless you have a PCAM through CAI, after 10-2007, the only way that you can manage a CIC is to take the 60 hours of pre-licensing classes through Key Realty Schools. 702-313-7000. During the legislation of 2009, the Legislators made it somewhat easier to get a license, however. The Commission for Common Interest Communities and Condo Hotels is working on a method for someone who has similar experience through other organizations can work without the 60 hours. In the Nevada Legislation, there were some changes made. See NRS 116A.410 Regulations governing certificates issued to community managers; temporary certificates; bonds; fees, for more information.
If I have managed CIC’s in another State, do I still need to go through the 60 hours of pre-licensing classes?
Answer: If you do not have a PCAM, Professional Community Association Management, designation through CAI, you will need to take the 60 hours of classes unless you meet the requirements detailed above under how to get your license. PCAM’s need to take 18 hours of Nevada law and pass the State’s test through PSI testing. Contact Sara Barry at email@example.com for more information. See above statute provision.
Are there any study guides to help me pass the State’s test through PSI?
Answer: Currently, there are no online study guides or classes. You may be able to contact Sara Barry, firstname.lastname@example.org, to see if you can take the two tests conducted during the 60 hours pre-licensing classes which could help tremendously to see what you need to study.
If I have been an Assistant to a Community Manager for years, how can I apply to become a full Community Manager vs. going through the 2 years as a Provisional Community Manager?
Answer: The Licensing Supervisor at the Real Estate Division looks at every single application that comes to the Division and makes a decision whether any type of license is warranted. A letter stating why an exception should be made should accompany the application, but there are no guarantees and be careful in your letter that you don’t admit in writing that you did those things that you need to have a license in the State or Nevada to do. See the opinion on the NRED site, which clearly states what an unlicensed person can do.
How many hours of Continuing Education Credits do I need to get before the renewal of my license in Nevada?
Answer: The Supervisory Community Manager , the Community Manager and the Provisional Community Manager all need 18 hours of continuing education classes for each 2 year licensing period. Three of these 18 hours must be 3 hours of specific Nevada NRA 116 or NAC 116 law hours. Check on line at the NRED site to see which of the approved classes have these credits as you can’t assume that any law class has these credits just because it sounds like it. Not all classes have that designation even though some should in our opinion. http://red.nv.gov/Content/Education/Calendars/CIC/
Do I need a license to manage Business CIC’s in Nevada?
Answer: Unless the documents of the Business Association tie you into NRS 116, a person does not need to have a Community Manager license to manage the property. It would help a lot if you did have the license, but there are specific exceptions for this type of Association unless the documents tie you back into NRS 116. See NRS 116.1201 Applicability; regulations. [Effective through September 30, 2011.] for more information as you do not need a Community Managers license to manage a commercial associaiton UNLESS the documents refer to NRS 116, which require any manager subject to that Statute to have a license. If a Property Manager (not a Community Manager) has no experience managing a non-profit corporation, you could unknowingly get your client in trouble even with the best of intentions.
What does it take to get a Supervisory Community Manager’s license?
Answer: Unless you have managed at least 4 years and 2 of those in Nevada, you will not be able to achieve this license. A Community Manager must have been actively engaged in the full-time management of a common interest community in this State, another state or the District of Columbia for at least 4 years immediately preceding his becoming a supervising community manager, with at least 2 of the 4 years of experience obtained in this state. For more information see: NAC 116.185 Supervising community managers: Qualifications and responsibilities.
What if I am a Provisional Manager and my Supervisory Community Manager leaves without verifying my hours accumulated towards the 3,120 hours needed to apply for my full Community Manager license?
Answer: One of the items discussed with the students in the pre-licensing classes is that need to get their Supervisory Community Manager to sign off weekly or minimally monthly on the work that they have performed to cover the areas that must be covered during the 2 year period. Each company in the industry has set up procedures on what will happen if this happens to you. See what the particular company’s policy is before you take the position. Another Supervisory Community Manager may not just take the word of the owner of the company if there is no evidence that you completed the work. Have this issue resolved before you take the position and start working for a company.
If I put in my 3,120 hours before the 2 years are up, can I get my full Community Management license then?
Answer: No, as you must satisfy both parts of this provision, 2 years and 3,120 hours of performing specific tasks during that time.
Does CAI’s M-100 count towards the 60 hours of pre-licensing education required to manage in the State of Nevada?
Answer: No, it does not unless you have continued on and achieved the PCAM designation. You still need to take the classes to get a license in Nevada. You can get continuing education (CE) credits for it once you've achieved your licensing goals.
If I have lost the list of classes that I used to renew my license last time, will the Real Estate Division give you a list of those classes to ensure no duplicates?
Answer: No! The Division will not give you this information as this is your responsibility to keep track of this information and take your continuing education seriously and keep track of it. Under the forms section look for the form titled: Keeping track of my Continuing Education Credits. Delete the information in the form and put in your own. The information was left into see how the form works.
How often can I use the same class with the same CE number to renew my license if the law has changed in that area?
Answer: You have to skip a licensing period before you can take and reuse a course even if the law has changed and materials changed. The numbers are entered and cannot be duplicated in a contiguous licensing period. As the Nevada Law classes are not held too often, this is an area where you could have problems.
What happens iF my Community Manager license has lapsed for more than a year and I want to reinstate it?
Answer: If it has lapsed but less than a year, you have to take the Nevada Law Class which is part of the 60 hour pre-licensing classes. If it has lapsed over a year, you may be required to take the full 60 hours pre-licensing classes again.
EDUCATION/CONTINUING EDUCATION CLASS APPLICATIONS (back to TOP)
If I have a special service that I can provide to CIC’s and want to teach a class for credits to Community Managers, what do I need to do?
Answer: Getting a class approved from the Division and the Commission for Common Interest Community and Condo Hotels is not an easy process. The Nevada Real Estate Division has a website where you can download the application. It is pretty self explanatory, but the hard part is the noticing (paperwork) before teaching and after teaching the class. The application must be submitted to the Education officer at the NRED. It is best to attend the Commission meeting should the Commission have questions regarding your class. You will be giving a CE number that must be shown on advertisement along with any charge and refund policy if there is a charge. Any files must be kept for a specific time-frame and you can be audited at any time by the Division. Sara Barry has been very helpful in actually working w/people to put classes together. Contact her at email@example.com.
If I want to teach a class for 1 ½ hours and get it approved for credits, can I do it and if so, what do I need to do?
Answer: The Commission changed their procedure to allow for 1hr, 2hr & 3 hr classes. A 1.5hr class won't be approved, but one of the others above will. A 1hr class does not take a break so it is the full 60 minutes. A 2 or 3 hour class has 50 minutes per hour with a 10 minute break per hour.
PROFESSIONAL COMMUNITY MANAGEMENT (back to TOP)
Where can we get help on seeking and interviewing a new management company?
Answer: Community Association’s Institute has a Directory of their members, which includes management companies. To receive a free Step By Step Guide Renewing and Hiring a Management Company Contract, contact Sara Barry at firstname.lastname@example.org or go to our forms or library page.
What should we do if we are not happy with our properly licensed Community Manager?
Answer: It is important that you let the manager know that you are not happy with him or her and give specific examples of why. If that doesn’t work, it is important that you contact the owner of the company as changes can be made in most companies to a manager who may be more compatible with your community. It takes another company AT LEAST 6 months to get up to speed with your community by the time they have entered all of the data for your residents, gone through the boxes that they may have received and learned the personality of your community. It is much more productive to try to work it out with your current community unless there are serious issues with the company not the manager.
Can one of the Board Members or Officers serve as the Community Manager and be paid?
Answer: If anyone (board member or officer) is paid for performing those duties that a paid manager needs a license to perform, they are required to have a Community Manager License. Unless your documents state otherwise, you don’t need to be professionally managed, but a Board who chooses to be self managed had better be prepared to take a lot of classes to stay up to date on the laws and issues that surround the industry. This Board may have the time and talent, but the next Board may not and it will take a lot of time for a company to reconstruct the documents, data, etc. should they take over from a Board vs. another management company and the start up fees could be much higher. As one of the "penalties" that the Commission can employ is force a board to hire a manager, why not let the professionals help guide your community.
If we don’t want to pay for professional management, can we just hire a bookkeeping company to do the financials and manage ourselves?
Answer: The definition of Community Management clears up this issue fairly easily. Notice the OR in this definition: NRS 116A.110 "Management of a common-interest community" defined. "Management of a common-interest community" means the physical, administrative or financial maintenance and management of a common-interest community, OR the supervision of those activities, for a fee, commission or other valuable consideration. (Added to NRS by 2005, 2574) [Emphasis Added]
If our Management Company moves their offices, what do we need to do with the licenses with the NRED?
Answer: If you talk to any company who has moved their offices, you will understand that this is not an easy task as the process is quite cumbersome. Before moving your office, contact the Division to find out the steps that have to be taken as all Supervisory Community Managers must change the addresses for all Provisional’s, etc. and I understand it must be done in a specific order to cause less disruption.
RESERVES (back to TOP)
Can members of the Board or an Officer, if they are qualified to do so, prepare a reserve study for the CIC without registering with the Division?
Answer: Each Director needs to check their individual State to see what the requirements are for individuals who conduct the study, but in Nevada NRS 116.31152 Study of reserves; duties of executive board regarding study; qualifications of person who conducts study; contents of study; submission of summary of study to Division; use of money credited against residential construction tax for upkeep of park facilities and related improvements identified in study applies. This statute addresses the issue, but the bottom line is that Directors ultimately make the decision on who does the study, but if they don’t do it themselves, they must use a registered reserve study provider. If the Board does it themselves, they can’t be paid to do it and in my opinion, a Board would be foolish to put themselves on the line to do their own study regardless of their perceived qualifications & consult with their legal counsel.
Where can I find the license number for a registered reserve study provider in Nevada to complete the Ombudsman’s annual form and reserve study forms?
Answer: If you make it a part of the RFP for them to provide the number, it will be part of the package. If you haven’t done that, here is the link to find the number:
https://red.prod.secure.nv.gov/Lookup/LicenseLookup.aspx Experience in the industry is critical as all it takes to get the license from the Division is registering. Ask for references and experience to save your CIC from serious financial trouble in the future as they are not all identical in their philosophy and methods.
AUDITS AND REVIEWS (back to TOP)
What if our documents say that we must have an audit every year and the Statute says that we only need to have a review the year before the reserve study is done?
Answer: Your documents take precedence over the Statutes in this case but check with your legal counsel as there is some disagreement in this area.
One of our Board members is a CPA and wants to do the audit for our Association, isn’t this a problem? Answer: The idea that one of your Board Members wants to do the audit raises concerns on several levels. The audit must be completed by an “independent “ CPA. A Director is not an independent person to conduct an audit and may even be acting as the treasurer as well. Not only is this a bad idea, but against Nevada Law and may be in other States as well. See NRS 116.31144 Audit and review of financial statements for more information in Nevada on Audits and Reviews.
If you still want this person (who is a CPA) to do the audit, I suggest that he or she resign from the Board, wait a year when the individual has not served on the Board during that period of time and then go out for bids according to Nevada law. But ask yourself why this is such a good idea as you truly want someone independent with no ties to the association to conduct this audit or review.
COLLECTIONS AND FORECLOSURES (back to TOP)
Can the Directors collect their own assessments from Members without using an outside service? Answer: Yes, but why would you want to do so? In taking action against an owner for non-payment of assessments, you are dealing with most people’s biggest investments in their lives. One false step and not only could you be asking for a lawsuit, but your insurance could be affected when they file against your D & O insurance when you make a mistake. Your insurance premiums will then assuredly increase and if you were actually ignoring one of your professionals’ advice, your personal assets could be on the line. Not worth it in my experience. Why not put someone else’s Errors and Omissions insurance on the line? Because of all the litigation in Nevada surroundiing this area, it would be foolish for an association to do this.
ETHICAL CONSIDERATIONS IN THE CIC (back to TOP)
What gifts and/or gratuities can I take as a Board member from our vendors?
Answer: Why would any Director want to take gratuities from anyone? If someone is trying to “buy” you, their intentions should be suspect. Any decisions that are made by the Directors should be based on who will do the best job for the Association vs. what is in it for them individually. In Nevada, however, the law is clear that no more than $100 can be received from any one vendor and any gift over $15 MUST be reported to the owners with the annual budget each year. See NRS 116.31185 Prohibition against certain personnel soliciting or accepting compensation, gratuity or remuneration under certain circumstances and NAC 116.480 Restriction on and statements by members of executive boards and officers of associations. (NRS 116.31185, 116.615) for more on the subject. If gifts are intended to sway an election, it is a felony in Nevada.
What gifts and/or gratuities can I take as a Community Manager from vendors who service our communities?
Answer: The answer for Board Members applies to Manager, but Nevada law is clear that no more than $100 can be received from any one vendor and no more than $500 total from all vendors put together. If a Community Manager receives a gift in the amount over $15, the amount must be submitted with their license renewal. See NRS 116.31185 Prohibition against certain personnel soliciting or accepting compensation, gratuity or remuneration under certain circumstances and NAC 116.482 Restriction on and statements by community managers and employees of community managers. (NRS 116.31185, 116.615) for more information on this issue. There is currently no form that comes with your renewal so you must include a note or spreadsheet.
Do we have to refuse all gifts over $100?
Answer: Should a grateful vendor bring in gifts to the office, it is the policy management companies that that gift must be able to be shared by all employees. The manager does not work alone in performing the management duties and if the gift can be split up among employees and still result in the manager not receiving more than $100, it appears to comply with the law. Any amount, however, $15 would still need to be reported with the license renewal if the manager received that much of the divided gratuity. Take into consideration as well if it would influence any recommendations you would make to your clients.
Is it unethical for my Mother to manage the Association if I serve on the Board?
Answer: It is not only unethical, but is against Nevada law as well. See NRS 116.31034 Section 9 for more on this issue as a person may not be a member of the executive board or an officer of the association if the person, the person's spouse or the person's parent or child, by blood, marriage or adoption, performs the duties of a community manager for that association or A person may not be a member of the executive board of a master association or an officer of that master association if the person, the person's spouse or the person's parent or child, by blood, marriage or adoption, performs the duties of a community manager for the Master association or any association that is subject to the governing documents of that master association.
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