Q: I live in a Nevada HOA where our board president acted as a single signer on a revised/renewed landscaping contract exceeding $100,000 per year, which was recently ratified.
This contract was executed 41 days prior to ever appearing on an open meeting agenda, which was effective 24 days prior to the meeting where it was listed as a mere “review/approve” agenda item. This contract was signed in direct violation of our bylaws, which strictly requires two board signatures for any expenditure over $500.
Due to the vendor’s poor performance — which has caused severe fire hazards and the destruction of community assets — I formally requested to review the contract prior to the meeting. I did not receive it. At the meeting, I objected and asked to table the item until we could review what we were paying for, especially since no other competitive bids were obtained despite the known issues. The board ignored the objections and voted to pass this revised agreement anyway.
When I finally received the document a week later, it showed only the president’s single signature and was completely missing the essential “Scope of Landscape Services” attachment and site maps making it a completely useless document.
Approximately 10 days after that meeting, the board and a vendor representative held a walk-through to get a new proposal for plant replacement. I requested to review that proposal as well, which I have not received either.
Meanwhile, the crew is currently on-site actively ripping out trees and plant material at an unknown cost, with no replacement plan being shared with the homeowners, fundamentally changing the landscape of the community without member input.
To investigate further, I requested additional records (the management contract, landscape payment ledgers and inspection reports) through the management company’s online homeowner’s portal. These formal requests have since been completely deleted from my portal view and remain unresolved, failing to provide the requested records in accordance with NRS 116 regarding rights to review records and our community’s CC&Rs rights to receive records upon written request within 14 days.
I would greatly appreciate your thoughts and views on these actions under Nevada law.
A: According to NRS 116.31083 (c) and (d), the minutes of the board meeting is to list the substance of all matters proposed, discussed or decided at the meeting and the record of each member’s vote on any matter decided by vote at the meeting. There is a provision in this law under section 13 which allows an association to make a decision in case of an emergency which is defined as any occurrence or combination of occurrences that could not have been reasonably foreseen or that affects the health, welfare and safety of the residents of the community. In addition, an emergency is one that requires the immediate attention and possible action by the board and makes it impracticable to comply with the provisions of sections 2, 3 or 6, notifications, items limited for executive session and homeowner forum.
Prior approval of the landscape contract did not meet the emergency requirements under NRS 116.31083.
In addition under NRS 116.31085 (2), a board may not meet in executive session to open or consider bids for an association project as defined in NRS 116.31086 (such as maintenance) or to enter, renew, modify, terminate or take any other action regarding a contract.
Based upon the information received from the reader, the association violated multiple state laws. The proposed renewal of the landscape contract should have been noted on the board agenda, as an action item, sent to the homeowners and discussed and voted upon at the regularly scheduled board meeting.
In addition to the president violating the association’s bylaws which requires two signatures under this situation, the board president violated NRS 116.311153 (2) with the exception of items listed in subsection 3, money in the operating account of an association may not be withdrawn without the signatures of at least one member of the board, or one officer of the association and a member of the board, an officer or the community manager. Section 3 does not apply in this situation which allows expenses to be authorized without signatures such as automatic payments for utilities, or state agency payments, etc.
NRS 116.31175 and NRS 116.3118 pertain to association records and requests from homeowners to obtain copies of them. Upon written request from a unit owner, an association is to make available books, records and other papers of the association to include the financial statement of the association and all contracts. The board shall provide a copy of the records within 21 days after receiving a written request. If the association is unable to provide the records in an electronic format at no charge to the unit owner, the association can charge $25.00 per hour and charge for the copies. (NRS 116,31175 (1a, 2 and 8).
The association can make available for review at its business office of the association for a unit owner to inspect, examine, photocopy and audit under NRS 116,3118 (2a and 2b).
Barbara Holland, CPM, CMCA, AMS, is an author, educator and expert witness on real estate issues pertaining to management and brokerage. Questions may be sent to holland744o@gmail.com.
