LET CONDO ASSOCIATIONS MEET RESPONSIBILITIES
By Michael L. Matuska

The Reno Gazette Journal frequently reports on the continued and growing momentum to pass legislation further restricting the activities of condominium owners associations.  According to these reports, most of the momentum is coming from condominium owners in the Las Vegas area. Any legislation passed should be careful not to hinder the ability of local condominium owners associations to address the health and safety concerns of the association members.

For instance, many of the condominiums in the Tahoe area are owned as vacation rentals. Many of the buildings were built in the 1970's and many were built on steep hillsides. Those factors, combined with extreme elements and heavy snow loading requires the associations to spend large amounts for maintenance, upkeep and in some cases major structural repairs. Douglas County in particular has required a number of buildings to complete major repairs for the health and safety of the building’s occupants. Any new legislation should be narrowly tailored to address the concerns of the Las Vegas condominium owners and should not impair the ability of the homeowners associations to budget and assess for maintenance and repairs, especially for County-required repairs that affect the health and safety of the occupants. 

In fact, any new legislation should go further and make it easier for small associations to budget and assess for maintenance and repairs to protect the health and safety of its occupants. I recently witnessed a homeowner obtain a temporary restraining order to prevent a foreclosure sale three years after the assessments for structural repairs were originally levied.  Meanwhile, the building cannot be fully occupied due to the remaining structural deficiencies. Ironically, the individual previously approved the assessments. 

The relation between Nevada Revised Statutes Chapter 117, governing condominium associations, and Nevada Revised Statutes 38, requiring arbitration of homeowners disputes is unclear. Although matters concerning dues and assessments appear to be within the subject matter of the Nevada Real Estate Division arbitration program, Chapter 117 provides for a non-judicial foreclosure without reference to the Nevada Real Estate Division arbitration program. Neither the legislature nor the courts have offered evidence on how to interpret the non-judicial foreclosure remedies of Chapter 117 in light of the mandatory arbitration requirement of Chapter 38. Nor does it seem likely that an arbitrator, who is not a court officer, has the authority or jurisdiction to order a foreclosure.  The arbitration requirement of Chapter 38 was adopted in 1995 without consideration of its impact on Chapter 117.

One suggestion is to clarify that matters concerning dues and assessments are beyond the jurisdiction of the Nevada Real Estate Division arbitration program.  Another solution is to require that a homeowner who wishes to challenge the dues or assessments has the affirmative duty to file a complaint with the Nevada Real Estate Division arbitration program within a prescribed deadline. A third option is to create an exception from the Nevada Real Estate Division arbitration program only for assessments that are levied to address health and safety problems with the building.  

It is extremely difficult for the small associations to find the funds to pay for the structural repairs. The association should not have to bear the burden of litigation and delays caused by one member’s refusal to pay necessary assessments. Ultimately, it is the members themselves who are harmed if the association cannot assess for necessary structural repairs. As with most problems, there are two sides, and hopefully a solution.