2 Comments
Facebook
Fark
Digg
Reddit
StumblePublished Monday, Sept. 29, 2008 | 4:45 p.m.
Updated Tuesday, Oct. 28, 2008 | 10:15 a.m.
The woman who brought her suspicions about collusion on her homeowners association board to the attention of the FBI says she didn't get far. Wanda Murray tells Jon on tonight's program that the feds deemed the issue a civil matter and had no interest. Ditto for the District Attorney, where Murray says she and her neighbors failed to get past the secretary.
So what got law enforcement to take notice? Tune in tonight to hear State Sen. Mike Schneider's (D-Clark) contention that the alleged activity extends beyond Nevada.
It's been reported that political consultant Steve Wark owned a less than 1 percent interest in a unit at one of the condo developments under scrutiny.
The implication is that Wark purchased the interest in order to qualify for a spot on the board. Under Nevada law, he need not go to the trouble. The law says while the majority of board members must own property within the development, the remainder need not. Schneider says the intent was to allow renters to have a say in association matters, but the law includes no residency requirements.
Anyone shocked by a lack of zealous enforcement of toothless statutory law (NRS 116) is laboring under a misapprehension that the industry and its players are regulated in any meaningful sense.
Reports of warrants for records fall short of making a claim of fraud. The facts taken as a whole in light of alleged collusion between a Board of Directors, Management, Counsel, and a contractor suggest conspiracy to defraud. Owners may have been denied the honest services of the parties they entrusted their affairs to. This is not anomalous.
The RJ reports the Ombudsman described Common Interest Communities as democratic. In a democracy, the people (owners as a whole) govern. In contrast, "corporate democracy" in an HOA is a myth. Recently, a prominent HOA attorney opined that owner/members have no legal authority to compel a Board of Directors to take any action or refrain from taking any action unless such right is specifically set forth in the governing documents. Remember, these are drafted by attorneys of the developer. Developer/builders have no interest in empowering owners. At best, HOA governing boards may be a "representative" form of government. Yet the fact that a majority of directors are owners does not make their collective conscience representative of owner views. Even good people may find themselves outgunned or mired once elected. When directors lack formal education and experience to govern according to law and governing documents, a paternalistic relationship with management is typical. In theory, management should be taking instructions from the BOD. In practice, management frequently railroads an inexperienced if not incompetent BOD to serve its own interests.
In this economy, most communities have extremely high delinquency rates in assessment payments. Owners in arrears lose the right to elect or remove corrupt and dictatorial directors. A significant percentage of the vote is effectively nullified creating a minocracy. This is compounded by the universe of apathetic voters. If 10% of owners in a community participate in the electoral process, it passes for a democratic election. Given the lack of regulation to ensure adequate safeguards to protect the integrity of the electoral process, it cannot be assumed owners are provided a free and democratic election. Owners also lack the right to rid themselves of a professionally incompetent, negligent, or self serving management firm beholden to an incumbent BOD. Given the incestuous relationship or unholy alliance, can management be entrusted with preparation and custody of the ballots? The owners' only recourse is to idly watch a train wreck and wait for the next tainted election.
In sum, be careful who you vote for because the Board of Directors has management and the Association attorney to protect them from owner accountability. Removing them through the "democratic" process requires nothing short of a miracle.
HOAs - MERELY A MICROCOSM OF WHAT SURROUNDS THEM.
Firstly, and in context, I note that more detailed media coverage is seemingly given this matter than is the $800Bn burden our legislators recently placed upon taxpayers despite advise from the taxpayers to reject such a bill as an unwarranted corporate gift package.
Accordingly all should vote for third parties (particularly Nader/ Gonzalez) as indication of dissatisfaction with the current regime and its similar possible replacement from either major party.
I am personally against over codification and particularly against knee-jerk legislative reactions based upon false premises as appear suggested by a certain state senator who appears, most charitably, ill informed.
The now much (partly) quoted statute which is said to provide for HOA board members being not required to be an owner of a unit within the development is only partially accurate.
"NRS 116.31034(1)... the units' owners shall elect an executive board of at least three members, at least a majority of whom must be units' owners. Unless the governing documents provide otherwise, the remaining members of the executive board do not have to be units' owners..."
Please note that if the HOA's governing documents provide that board members shall be owners of record, non-owners may not serve on the board.
Clearly governing documents may include such language, and likely should, in order to prevent incursions by special interests not necessarily in the best interests of the HOA.
There are able to exist many potentially incestuous relationships between so-called management companies and "vendors" because boards often do not accept the responsibility of management, abdicate responsibility and allow its servants (the for profit management company)to dictate policies, procedures and negotiate contracts on the board's behalf.
Board members should have (as they affirm to) sufficient understanding of the laws relating to common interest communities to be effective and to provide paid community managers with proper direction. Proper education is the answer for both boards and so-called managers.
I would estimate that there are more well grounded construction defect lawsuits in Nevada than those which are clearly dubious.We have existing courts, laws, rules of evidence and burdens of proof. All designed with "justice" in mind.
If, as is inferred, the catalyst for such lawsuits and associated unfounded avarice is the "loading" of boards with non-owner "shills," then ensuring that your HOA's governing documents include language which limits board membership to owners will likely solve the problem without further legislation being necessary or of benefit.