HOA’s are not voluntary, each owner becomes a member of the Association at the close of escrow when they purchase a home within the community. HOA’s are set up as non-profit corporations but operate similar to the democratic process typically used for a City Council Meeting, in that the owners in the community freely elect their fellow neighbors to act on their behalf.
Serving on the Board of Directors of the Association is a volunteer, unpaid position. Other owners in the community may also serve as voluntary committee members, which assist the Board of Directors. These volunteers meet regularly to discuss the day to day operations of the community.
Associations are considered non-profit corporations and are ran just like a business. Assessments that are collected from each owner are used for the day to day operation of the assciation. The board has a fiduciary duty to maintain the common areas of the association such as the streets, entry gates, street lighting and certain landscaped areas. All of these items require power and water, sometimes even natural gas which the association must also pay.
In addition to the normal maintenance items the association pays for, the management of the association, which in most cases is a very small percentage of the annual budget. The Association is also legally required to fund what is called a reserve account, in accordance with NRS 116.31152 and NRS 116.31153. This reserve fund is typically the largest expense of the annual budget.
Reserves cannot be used for normal maintenance items such as tree service, or repairing a broken gate, it is ONLY for the “replacement” of common elements. These common elements, or “components”, are identified by what is called a Reserve Study, which must be prepared by a licensed/certified reserve study specialist.
The Reserve Study is a detailed document that provides a list of all major components within an association that can be used or is used equally by all unit owners (such as pools, A/C units in a clubhouse, gates, streets, sidewalks, etc.). The reserve study specialist includes a 30 year projection of expenses and income along with the useful life and estimated replacement cost of each component.
That 30 year projection is how the association determines how much needs to be budgeted for their reserve contibutions every year.
Terms of the Board must be staggered to elect roughly the same number of directors each year (i.e. 2 directors in the even years and 1 director in the odd years). Once the members have been elected by the owners, the newly elected board “organize”, or discuss amongst themselves as to which position of office they will be taking (i.e. President, Secretary, Treasurer, etc.), which are described in the Bylaws of the Association. Officers are chosen by the Board themselves, not the owners.
Typically, this is noticed with a Candidate Nomination Form and includes instructions on how to participate in the election and the nomination period. Candidates must be a “member in good standing” and must disclose certain information in writing in accordance with NRS 116.31034.
This petition must be mailed, return receipt or served by a process server to either the Community Manager or the Board. The next step is to send out secret ballots to the owners not less than 15 days and not more than 60 days before the removal election meeting and is handled by the Community Manager. The ballot process is handled the same way that a regular election is processed.
The removal election must be completed within 90 days of the receipt of the petition and is typically monitored by the Associations attorney given the nature of the process. In order for a recall election to be successful, at least 35% of all unit owners and a majority of the votes cast MUST be in favor of the removal.
If the Association does not receive at least 35% of the owners to vote and a majority of that 35% is not in favor of the removal, the Director will remain on the Board.
In order for the board to fine, they must first notify you in writing by first class mail that you are in violation of the governing documents. This notification must include a photo of the violation and you must be given a reasonable period of time to correct the violation (standard practice is between 14 and 30 days, depending on the penalty policy adopted by the board).
Once notification has been given, the board may then begin the fine process. If an owner fails to correct the violation, the board must schedule a hearing and provide the owner with the date, time, location of the meeting not less than 10 days prior to the date of the hearing, at that hearing, the board may decide to fine. If the violation continues for 14 days or more after the initial fine, it is deemed continuing and the board can fine the owner once every 7 days thereafter, until the violation is cured.
In addition to fines, the board also has the right to restrict the owner from voting and from using common area amenities.
You would typically receive a response within 10-14 business days after the board reaches their decision, which is accomplished at their regularly schedule meetings (typically held monthly or quarterly).
You may also dispute a fine by requesting a hearing in front of the board, which also must be done in writing and is accomplished at a regularly scheduled meeting of the board.
The board entered into a management agreement with Shelter Management Group (SMG) in order to represent them, which includes processing all communications that are addressed to the board, whether from an owner or a contracted service provider (vendor).
This type of relationship is called a Fiduciary Relationship. We are not legally permitted to provide confidential, personal information for a homeowner, which includes the board of directors. However, if an owner requests that a board member contact them, we can pass that information on to the board asking them to contact you at their convenience.
You should not schedule any work to be started without prior written approval. The approval timeframe is typically regulated by your governing documents and can take anywhere from 30 – 45 days after receipt of your request in order to get a response from the Board or Committee.
If you are interested in making changes to your home, please contact Shelter Management group for additional information on the process and to obtain the forms (typically known as ARC Forms) that will be needed in order to get the changes reviewed by the board. You may also obtain these forms by logging on to your Associations website at www.smghoa.com
A form may be needed in order to accomplish this request, but we will be happy to assist you. *Charges may apply in some cases.
You must provide us with the name and contact information for the person or people authorized to act on your behalf. This request should be addressed to the Accounting Department and can be done either by fax, e-mail or regular US mail.
** Some of the content listed in the section of FAQ was courtesy of the Nevada Real Estate Division