Bill would curb over zealous homeowners associations

CARSON CITY - Homeowners' associations aren't just worried about trim colors and whether lawns were mowed. They also assess fees and fines, make budgets and plan costly community improvements.

But many of those more critical decisions are made without a majority of the homeowners' knowledge, Nevada lawmakers were told Tuesday.

With that authority unchecked, some associations have become "little governments running amok," depriving members of their rights, added Sen. Ray Rawson, R-Las Vegas.

After spending an evening at a meeting of his own homeowners' association, Rawson drafted SB192 to require associations to operate under the state's open meetings law, follow parliamentary procedure and avoid proxy votes.

"All of the abuses you can see in government can be seen in homeowners' associations," Rawson said during a Senate Judiciary Committee hearing on his bill.

His own experience was like being stuck on a railroad track, he said, adding, "You can hear the train coming, but there's nothing you can do about it."

What really set him off, he said, was when his board of directors said state law requires 51 percent of the members to vote against a measure or it automatically passes.

"People need to vote for something, not against something or it passes by default," he said.

Rawson admitted the bill still needs work, but he stuck to the requirement of having a quorum present in order to raise assessments.

"These fees, at the lowest form of government, are basically taxes," he said. His bill would require a two-thirds approval by a quorum to raise assessments.

Representatives from homeowners associations around the state said associations are businesses and therefore not required to operate under the same controls as government agencies.

Michael Trudell of the Caughlin Ranch development in Reno said SB192 would invite an unwarranted level of scrutiny, but Judiciary Chairman Mark James, R-Las Vegas, said that wouldn't happen. James said association members should know where their fees are going.

Trudell also said money collected by associations isn't a tax, but James countered, "We're talking about assessments and that's taxes."

Duane McPherson, head of the association at the big Spring Creek development in Elko County, agreed his group is "a form of lawful government."

But McPherson said a ban on proxy votes would be difficult because many of his association members have homes elsewhere and wouldn't always be around to vote in person.

Diane Weissman, a director of a homeowners' association in Las Vegas, testified as a homeowner in favor of SB192.

"No corporation has the power to tax, fine or lien property of one of their stockholders," she said. "While there are penalties in place for homeowners who break the rules, there are no penalties for the homeowners' associations."

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