Homeowners associations may find help in ombudsman coming in July

Friday, Dec. 26, 1997 | 10:49 a.m.

If members of warring homeowners associations can call a truce until July, they may have some additional help in solving their conflicts.

That's when the state is supposed to fill the newly created position of ombudsman for homeowners associations.

The office was created by Senate Bill 314, which was authored by state Sen. Mike Schneider, D-Las Vegas, and has been dubbed the "Homeowners Association Bill of Rights."

Schneider said he wrote the bill because "problems and complaints have gotten out of control and people have nowhere to turn."

State officials are developing the ombudsman's duties in detail, but in general they will be to help process claims for arbitration or mediation and to help owners understand their rights and responsibilities.

The ombudsman's office will be in Las Vegas, where most of the state's homeowners associations are located. It will be under the direction of the Real Estate Division of the Department of Business and Industry.

In 1995 Steve Urbanetti, who works in the Real Estate Division, surveyed Las Vegas and found more than 700 homeowners associations.

"And it's grown a lot since then," said Urbanetti, who will have the job of fielding questions about homeowners associations until the ombudsman's slot is filled.

Schneider, a Realtor and former association member, says 60 percent of everyone in the Las Vegas Valley lives under some sort of association.

"All of Green Valley is under an association, Green Valley and Summerlin. They are 'master associations,' the entire development," said Schneider. "And then there are sub-associations within the master association, like Lewis Homes."

According to Schneider virtually all of the new residential building taking place in the valley is within one association or another.

"They probably have more in Arizona, but percentage wise we may be No. 1 in the nation for associations," said Schneider, adding that cities and counties in Nevada are actually encouraging the spread of associations because it relieves governments of some of the responsibility of such things as street maintenance.

Urbanetti praised Schneider's bill.

"It allows for complete disclosure," he said. "You have to tell people, these are the rules you are going to live by."

Most homeowners associations run fairly smoothly, but as they grow in number, so did complaints.

Schneider told a story about a homeowner in a gated community near Lake Tahoe who had some land two members of the association's board of directors wanted for personal reasons.

He refused to sell it.

"So they exercised the association's right of eminent domain and took it," said Schneider. "Plus, he spent tens of thousands of dollars defending himself."

Another horror story, this one near Reno, involved a decision by a board of directors to sue a builder over construction defects without getting approval from association members.

"The board sued and lost and then the builders turned around and sued the association and won a $1 million judgment. Each home owner is now responsible for about $30,000."

Schneider's bill addresses those and many other problems that arise when people join homeowner associations -- boards no longer may enter into lawsuits without a majority vote of the owners and associations do not have the right of eminent domain.

The new law also addresses other holes in home owner associations regulations.

"Some members of associations haven't received a financial statement in 15 or 16 years," he said. "You and I know how much we have in the bank from month to month, but a lot of associations' boards weren't revealing that.

"In my district I have some older associations, one where the streets in it have deteriorated from asphalt to gravel and there is no money to repair them.

"One association had to close its pools and fill them in with gravel because when it came time to repair them there was no money. That's very common.

"When you're making one of the biggest investments of your life you want to make sure you are not surprised a couple of months after the purchase by an assessment of several thousand dollars.

"This bill tries to address all those problems, to protect the investment of the public."

Urbanetti hears complaints from across the state at his Las Vegas office, but the majority of them are from here.

"I've handled 116 claims since July of '96," he said.

About 25 of them were from outside of Las Vegas.

He says he gets lots of phone calls, about 150 a month, and sends out about 200 informational packets a year.

"I get horror stories from both sides," he said. "Some association boards are self-serving, some do great jobs. It's a thankless position."