AFTER MONTHS OF serious massaging -- some might say major surgery -- by a host of interested parties, a bill to reform Nevada homeowners associations is about to hit the Legislature floor.
The bill, sponsored by state Sen. Mike Schneider, drew extensive attention not only from homeowners who were clamoring for state oversight because of association abuses, but also by members of the industry that has mushroomed around the ubiquitous organizations.
After two public hearings and major rewriting, the Las Vegas Democrat unveiled the bill Thursday.
Members of grass-roots groups critical of associations will likely be dismayed with some of the cuts from the original proposal. Gone are oversight by the attorney general's office, required classes for all new board members and required monthly meetings.
But the bill does include a number of provisions that should prevent many of the train wrecks occurring in an association near you.
Some of those include:
* Creation of an "advocate for owners in common-interest communities."
* More stringent notification requirements by sellers to prospective buyers, including a five-page warning contained in the bill, as well as information about the association's finances, monthly assessments and pending lawsuits.
* Numerous open meeting requirements.
* Mandatory licensing and bonding of association property managers.
* New limitations on fines and foreclosures.
* Outlawing eminent domain takings by associations.
* Requiring a majority vote of owners to approve litigation that isn't directly related to enforcement of association rules.
"We didn't get the whole loaf," Schneider acknowledged, "but I knew we wouldn't.
"I think more associations will be run professionally because of this. Just by that, a lot of the problems go away."
The advocate, to be part of the Real Estate Division of the state Department of Business and Industry, would help owners process claims submitted to mediation or arbitration, help educate association members on their rights and responsibilities, and help board members to carry out their duties.
The advocate's office, which would also include a secretary, would be paid for by an annual fee on association members. Schneider says the program will cost "no more than $125,000" a year and will result in a fee of $1 to $3 per unit.
"For that money you get an advocate who can actually come out and help you with your problems," Schneider said. "That's a pretty good insurance policy."
Schneider feels strongly the office should be funded with the fees paid by association members.
"If you and I don't live in an association, we shouldn't have to pay to fix the problems."
Another provision that could go a long way to heading off problems is a more stringent notification requirement for buyers. Over and over again, reporters and legislators are told by homeowners that if they'd known what they were getting into, they'd have never bought into an association in the first place.
There are notification requirements now, but they often result in a real estate agent handing over a thick sheaf of association bylaws -- often written in impenetrable legalese.
The new notification, written into the law, contains warnings in plain English about the restrictions that go with ownership in a so-called common-interest community.
People should read their governing documents, Schneider said, but often they don't. The warning -- which he helped write -- doesn't go into all the rules, but it tells you "what they're all about."
"If you can't agree to this," he said, "you probably shouldn't buy."
Another major boon to victims of dictatorial association boards are the open meeting provisions of Schneider's bill.
It requires notification to all members of every meeting, including board meetings, posting of agendas on what will be discussed and acted upon, a public comment period in all meetings, and posting of minutes within 30 days.
The bill originally required monthly association meetings, but Schneider became convinced that wasn't practical. Instead, the bill would make board meetings, which must be held once a quarter, open to all association members. That is often not the case now.
Schneider said he's gotten a lot of support for his bill from many directions, including the real estate and home-building industries.
Schneider will take the bill to committee early next week and expects it to hit the Senate floor a few days later.
The bill's chances for approval?
"I'm real confident," he said.
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