Bill Would Place New Rules on HOAs

Legislators in Carson City say they want to make sure HOA's are fair to their members. Now a bill could save you from losing your home.


Courtesy of the Channel 8, Las Vegas, Nevada
Published Wednesday, May 11, 2005

More than one million people belong to homeowner associations in Southern Nevada and nearly 90-percent of all new homes in Clark County have HOAs. Legislators in Carson City say they want to make sure HOA's are fair to their members. Now a bill could save you from losing your home.


Warren Hardy, (R) Clark County State Senator, said, "I hate to give up on homeowners associations, but I can get there too."


Senator Hardy is fed-up, "We have an obligation to look at where people's most personal right, their home ownership, is not impacted negatively."


That is what Senate Bill 153 is focusing on, making sure homeowners also own the right to know exactly where their money is going.


Sen. Hardy adds, "I learned the middle of last summer that there were occasions in which managers of homeowners associations had set up contractually where they were benefiting from those fines."


Hardy says the more the managers benefit, the more common the problem. Fines are being imposed for such things as for, says Sen. Hardy, "leaving your trash can out too long, having weeds, any of those."


Things, which Legislators say are unfair.


Hardy continues, "The problem is that it is the fox watching the hen house. You can't allow the person who assesses the fine to benefit from the assessment or they are going to fine everyone they can."


Legislators want to see that issue changed by monitoring what homeowner associations are doing with the money they receive.


Pam Scott with the Howard Hughes Corporation is concerned. "You cannot foreclose on a fine but you can for assessments."


Officials say many managers are paying the fines with the payments rather than the assessment, which puts houses in jeopardy.


Senator Hardy says this bill could be the foundation for more secure homeowner associations because it gives more control to the homeowner giving them access to records.


"It allows the homeowner to specify where they want the money to be placed," Hardy said.


Pam Scott adds, "Unless the owner tells you that he is paying a fine, all money goes to the assessment so that they are not accruing late charges and going towards leaning and foreclosure."


This bill is also designed to make sure that homeowner association managers abide by the same rules as collection agencies.


The bill has been passed by the State Senate. It is currently in committee that is expected to pass it on for a vote in the State Assembly.