Bill designed to chill homeowner criticism of HOAs, say opponents
The bill allows an association to ban a homeowner from serving on an HOA board for up to 10 years for filing a vexatious, defamatory, or false complaint with the state, and allows board members or staff to use HOA funds to recover compensatory damages, attorneys fees, and costs. (Photo: Ronda Churchill/Nevada Current)
A bill sponsored by the Nevada Senate Judiciary Committee seeks to rein in Nevadans who lawmakers say are harassing and demanding too much of their homeowners’ associations and management companies.
“Some of the actions that we’ve taken to protect HOA members have gone a little too far and expose executive board members and their employees to harassment,” including death threats and vandalism, Sen. Melanie Scheible said as she presented Senate Bill 417 to the committee Tuesday. “They’ve also put expensive demands on boards to fulfill unit owners’ requests for records that sometimes have no bearing on the issue at hand.”
Senate Bill 417 removes the current $10 cap community managers may charge homeowners for record inspection, and allows them to charge actual costs.
Laurie Berger, a community association manager in Reno, testified one homeowner’s request took 65 hours for her staff to process.
Samuel Covelli, a retired corrections officer in Las Vegas, says he was “stonewalled” when he asked his HOA for financial information.
“I’m sure there are good HOA boards. I’m sure there are good management companies. I’m sure there are good attorneys in the community representing people,” he testified.”But this whole process is horribly slanted against a homeowner. I’ll take some of the blame for not paying attention to what went on in my HOA for 20 years.”
The bill allows an association to ban a homeowner from serving on an HOA board for up to 10 years for filing a vexatious, defamatory, or false complaint with the state, and allows board members or staff to use HOA funds to recover compensatory damages, attorneys fees, and costs from a person who takes “retaliatory action,” as determined by the State Real Estate Division.
Las Vegas homeowner Michael Kosor says the measure is an assault on the First Amendment and serves to chill opposition to HOA governance. He says it’s also “a rainmaker for the attorneys and management companies.”
Kosor says defamatory speech is already prohibited. The legislation, he says, allows the association to determine what is defamatory and gives the association “the ability to censor free speech based on opposing positions from that of the board.”
Southern Highland’s developer Garry Goett’s OIympia Companies sued Kosor for defamation over statements made on-line and in-person at HOA meetings. Kosor prevailed before the Nevada Supreme Court.
“I’m a retired Air Force colonel fighter pilot with combat experience in the Gulf War,” Kosor testified Tuesday. “This experience defending the attacks of this developer on my family’s financial future was in total the most stressful experience of my life.”
Kosor contends Goett has erroneously maintained control of the Southern Highlands board. He’s presented what he says is evidence to the state, but NRED has refused to investigate. SB 417 would codify the state’s ability to pick and choose investigations.
“There’s an imbalance of power between homeowners and homeowners associations and management companies,” Las Vegan Howard McCarley testified in opposition to the bill. “Extensive financial resources are available to associations and managers. Residents are on their own.”
Adam Clarkson of the Common Associations Institute, the lobbying arm of HOA management companies, says the state’s Real Estate Division receives “a lot of complaints from people that are just routine fighters,” and noted the bill would allow boards to prevent those people from serving on the board.
“They are not the kind of people who should be on the board,” Clarkson said. “They are not good people.”
The measure would also give the state the ability to ignore some complaints.
“Even if the facts are true, NRED doesn’t have to investigate it,” Clarkson of the Community Association Institute testified.
Kosor says the government should advance HOA transparency “and encourage greater participation of owners in their HOAs. This bill does the opposite.”
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