by: Mike Kosor
Southern Highlands Community Association owner
I spent the first 24 years of my adult life as a military pilot and officer defending the basic principles that make this country great. I have long held the cornerstone of those principles is the right of all to choose those who represent them in the governing process-at all levels. Unfortunately, this fundamental right may not exist if you reside in one of the nearly 3,000 Nevada homeowner’s associations (HOAs), where half of all Southern Nevada’s live.
HOAs levy controls, rules, and “taxes”, in the form of assessments, on those that reside within their boundaries. It is widely recognized an HOA is a quasi-governmental body with the “laws” commonly referred to as CC&Rs (convents, conditions, and restrictions).
CC&Rs are a contractual document, attached to your home, written by your community’s developer, and subject to few restrictions. They permit your developer to retain control of how land in the association is used after it is sold-to include your home. CC&Rs establishes how your HOA is governed, usually accomplished through a Board of Directors’ given powers beyond those enjoyed by local and state governments. Most important, it provides for governance by a small set of individuals, who may not even live in the community, and the majority of which are appointed by the developer.
During the last Nevada legislative session, AB 192 quietly passed with no fanfare and without a single dissenting vote. Nonetheless it made a huge change to statutes affecting all large HOAs in a way most homeowners would find unacceptable.
Effective October 2015 the threshold whereby developers of large communities such as Southern Highlands, Mountain’s Edge, Summerlin, and many others, are required to relinquish their lucrative control to owners, referred to broadly as “declarant control”, was lowered. AB 192 moved the arguably already low 25% interest threshold to an absurdly low 10%.
As it stands today, a developer can remain the potentate of your HOA with a mere 10% interest in the total units the developers “plans” to construct. The threshold becomes effectively zero when you consider the calculation uses units reserved/planned (read proposed but not fixed or required), as units reserved can be reduced at the developer’s sole discretion.
The law was retroactive. So regardless of when your HOA was initiated, or when you entered into your contract, if your association has not yet been granted independence, your developer just extended his almost limitless, dictatorship like authority indefinitely.
As I traveled to other countries during my military service and later in a second career, I was always proud of this country’s representative system of governance; even when our representatives enacted laws and/or caused our country to act in ways I disagreed. But I cannot be proud nor should we standby silently when those elected under our representative system fail to uphold, in the laws we entrust them to enact, the very principals that made their election possible. In passing AB 192 our elected representatives have chosen to “sell-out” the right of homeowners to elect those that govern them to a few elite and powerful developers with selfish agendas.
I approached my state senator and asked for her support to repeal AB 192. Despite being an HOA attorney with a clear understanding of the implications, she was unwilling. I approached the Community Association Institute’s (CAI) senior leadership and its lobbying arm, the Legislative Action Committee (LAC). CAI is a large national organization and one of the few groups in Nevada that holds itself out to our regulators and legislators as a representative of association homeowners. They too refused to act despite the legislations clear abuse of an owner’s representative rights. To my dismay CAI actually sided with big developers and lobbied in support of the legislation. As a member homeowner, I now wonder who in the HOA they represent?
I even approached my County Commissioner. In full disclosure she was not involved in the legislation. Nonetheless, she holds an important approval authority for developers to construct and effectively “privatize” our communities. Her power to effect change rests in the control of massive incentives developers seek from the County to construct and ultimately profit from our communities. She claimed to have no knowledge of the legislation and as with all the others I approached, refused to act.
I worry what other principles our representatives are willing to set aside. Have we lost the resolve or an appreciation of the principle President Lincoln proclaimed in a short yet instantly recognizable speech when he said governance “…of the people, by the people, for the people, shall not perish from the earth”?
Democracy requires participation; it responds to those who take an active role in its creation. The apathetic nature of most homeowners is the foundation of our current HOA governance issues. We allowed the privatized of neighborhoods but we should not allow our right for representation to be the price paid. It is time for homeowners to assert their right to have a participatory, democratic form of community association government.
Southern Highlands Community Association owner