It’s HOA budget season. Let the chaos begin.

By Deborah Goonan, Independent American Communities

According to a recent KTNV report, an annual budget meeting at Highland Ranch Homeowners’ Association ended in chaos, with local sheriff called in to disperse the crowd.

An uncharacteristically large number of angry homeowners gathered to attend the meeting in a small office on HOA property. But due to lack of space, many of them could not enter the room.

What has the homeowners so riled up?

The HOA board announced a $2.33 per month assessment increase. And a lot of homeowners want no part of it.

The HOA, managed by Associa Sierra North, states that homeowner members of an HOA can prevent the board from adopting a new budget if 75% of all property owners attend the annual meeting and vote to reject it.

Let’s take a look at state laws in Nevada

Nevada statute allows members to vote by either absentee ballot or proxy.  Here’s the relevant section, NRS 116.31151, that addresses the ratification procedure for HOA budgets. (my emphasis added)

3.  Within 60 days after adoption of any proposed budget for the common-interest community, the executive board shall provide a summary of the proposed budget to each unit’s owner and shall set a date for a meeting of the units’ owners to consider ratification of the proposed budget not less than 14 days or more than 30 days after the mailing of the summaries. Unless at that meeting a majority of all units’ owners, or any larger vote specified in the declaration, reject the proposed budget, the proposed budget is ratified, whether or not a quorum is present. If the proposed budget is rejected, the periodic budget last ratified by the units’ owners must be continued until such time as the units’ owners ratify a subsequent budget proposed by the executive board.

(Pixabay.com free image)

Onerous and vague state laws

If Highland Ranch HOA had public access to its website and governing documents, any interested party could verify it the HOA actually requires a “larger vote” of 75% vs. 51% to reject the annual budget.

But a link to the Association’s website is redirected to an Associa TownSq portal, which allows secure access only to registered members.

Yep. No public transparency here. And that has become standard procedure for HOAs across the U.S. these days.

Personally, I’d say that 75% of all unit owners is a very high threshold to meet. It effectively gives the HOA board a blank check to fund the annual budget with annual membership assessment increases.

But…that’s not all.

If you read the emphasized portion of Nevada Statute carefully, it’s actually somewhat vague. The statute could be interpreted to mean that a majority (or higher percentage) of unit owners who attend the meeting can stop an HOA budget increase.

Unless at that meeting a majority of all units’ owners…

But I’m didn’t write this statute, and I’m not an attorney.

So, for the sake of argument, let’s assume the intent of Legislators was to require at least a majority of all unit owners to be able to veto a board’s budget.

Notice how homeowners are expected to vote against the budget rather than voting in favor of the budget?

Of course, this is by design of the HOA industry, fully supported by trade groups who want to make it easy for HOA boards (and supporting management companies) to ram through budget increases with as few obstacles as possible.

At one time, by the way, most HOA governing documents (the so-called “contract”) required a minimum number of members — at least a majority — to approve any annual budget put forth by the board. But no more in Nevada and other states that have enacted similar amendments to state law.

In this case, state Legislators backed up trade groups who have long been eager to impair the contractual relationship of the HOA to its owners, if it means more money for management companies and their vendors to work with.

Follow the rules restrictions blackboard
(Pixabay.com free image)

But, it’s only $2.33 per month, what’s the big deal?

Obviously, homeowners in Highland Ranch are less concerned about the amount of the assessment increase than they are about the reduction in services. And they aren’t too happy about selective and arbitrary enforcement of HOA covenants, restrictions, and aesthetic standards, either.

The general gist of owner angst, observed in the following report: why should the homeowners pay more money to be harassed by the HOA, with poor service to boot?

I’d say that these Highland Ranch owners are quite unhappy and dissatisfied with their overall HOA experience, wouldn’t you?

 

 

Tensions Rise at Highland Ranch HOA Meeting (NV)

Tuesday, November 27th 2018, 2:15 PM PST by Bryan Hofmann

Updated:Tuesday, November 27th 2018, 2:29 PM PST

The scene at a Highland Ranch Homeowners Association meeting in Sun Valley earlier this month was packed full of emotion. The topic that got everyone so passionate? An increase in HOA dues that needed 75 percent of the 1626 units to vote against in order to defeat.
Tuesday, November 27th 2018, 2:15 PM PST by Bryan Hofmann
Updated: Tuesday, November 27th 2018, 2:29 PM PST

The HOA tells us that the space was beyond capacity and the crowd’s emotions were high, and after receiving threats the staff, along with security officials, attempted to continue the meeting.

They continued in a written statement —

“Homeowners were given the opportunity to speak but the situation became unruly and potentially unsafe for all involved. The sheriff was dispatched and the meeting was dispersed.”

But some homeowners say it was rigged from the start: the meeting was in the HOA office, with very limited capacity–

Read more (video):
www.ktvn.com/story/39548579/tensions-rise-at-highland-ranch-hoa-meeting

From the same source, here’s a portion of statement from HOA board:

On, Thursday, November 15th, a member meeting was conducted to consider ratification of the proposed budget, which included the $2.33 increase per month. The member meeting must have 75 percent of the members be present and vote to reject the budget. If not, the budget is ratified. The community has 1626 units. Although the meeting had a large turnout and the board worked to have residents sign-in to get an accurate count of the number of homeowners present. The number was well below the required threshold of at least 75 percent of all of the members.

Homeowner Reference:

UNDERSTANDING ASSOCIATION MEETINGS (Nevada Real Estate Department)

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