By: Rana Goodman
The Flip Side of HOA Wars Part II: It's All About Money!
Last month, I wrote about three senior ladies who serve on the Home Owners Association board of the Crossroads III Community in North Las Vegas. Part II will bring you up to date as the wheels of justice slowly turn.
While the board tried to unravel the mess created by a “bully association attorney” and a community manager who don’t seem to understand “boundaries,” the "gold rush" is on for "billable hours."
While we might argue right and wrong of an issue, I am of the opinion that in addition to the legal point, there is also a moral one. At stake here is the “pot of gold” not belonging to these 3 women, but from the approximately 200 people - namely the residents of the community.
For each step that our “antagonist” attorney takes, his financial clock keeps ticking; this in spite of the fact that there is a simple, low cost way to settle things. The current board, let’s call them “Team Chavez,” wants to hold an entirely new election and let the residents decide.
The problem with this common-sense solution is that the attorney won’t earn anything with that solution and the current CAM (community manager) Sherryl Baca of CMS Management will be fired for a second time if “Team Chavez” wins.
As I previously wrote, association attorneys are normally hired on a case-by-case basis. Their job is to advise the board when asked.
However, for some unknown reason, attorney William Wright felt the urge to investigate the personal status of one board member. The woman was certified by the CAM upon election and voted in by her peers as president.
Rather than call and advise her that he believed that there may be a potential problem, this attorney (without any board or official authorization) set upon a crusade to remove her from the board. He began a letter writing campaign to other board members, residents, the Nevada Real Estate Division of Business and Industry; even this woman's daughter.
Now what happens when lawyers write letters? Tick-tock, hourly billing.
The interesting part was that the president and two other board members had no access to the financial records and bank account of the association. Therefore the residents have no idea as to how much Mr. Wright has been billing the community since his last $4,000.00 bill was presented at the July, 2013 meeting.
One fact however remains clear. No legal work was authorized or approved by any of the members of the board who were present.
At that meeting, Attorney Wright was fired, and a new law firm hired - but herein lies the problem. Without access to the association bank accounts (held hostage by the CAM and “team Wright”) there is no way to pay their new attorney other than to dip into their own pockets. Remember, we are talking seniors on fixed incomes.
Attorney Wright has guided the balance of the board, “Team Wright” into a so-call emergency meeting to appoint/elect (without a quorum no less) to replace the president. Attorney Wright advised a complaining resident that, “no, I’m not replacing Ms. Chavez, she was not really on the board."
Tick-tock goes his billing, as he orchestrates the meeting creating a second board. And the legal fees keep going up.
Attorney Wright’s next attack, alleging that there was a “violation of state law” on behalf of the association, filed three Alternative Dispute Resolution (ADR) complaintsagainst Ms. Chavez, her significant other and Ms. Chavez's daughter (a military veteran who recently served in Afghanistan). The association will have to pay for Ms. Chavez - the other two are on their own.
By the way, I have seen the fees in these ADR arbitration matters go as high as $25,000 per case. As I said, follow the money.
This entire matter could easily and quickly (and fairly) be resolved and finalized by a new board election overseen by the Nevada Real Estate Ombudsman's office. An election by the residents will answer all questions and concerns and hopefully allow the neighbors to live in peace.
My big question is for both the Nevada Bar and the Real Estate Division. How and why do you allow behavior like this?
And I understand William Wright is going to be teaching classes for the Real Estate Division on HOA law… REALLY?! Once again, justice and fairness loses to attorney fees.