Page 5 - CooperatorNews Las Vegas Fall 2021

NEVADA.COOPERATORNEWS.COM COOPERATORNEWS NEVADA— FALL 2021 5 QUESTIONS & ANSWERS Legal Q A& Self-Appointed Board Q My HOA board has not had an election in 10 years. Th ey keep reappointing themselves and ap- pointing their friends to the board when there is a vacancy. Is this legal? How can I stop this abuse of power by my HOA? —Reining in Abuse of Power A “No, this is not allowed under Nevada law,” says attorney Eva Segerblom of the Reno-based fi rm Maddox Segerblom Canepa, “unless the board is still declarant controlled. Nevada Re- vised Statutes (NRS) 116.31034 requires that, at the termination of the declarant’s control, an executive board must be elected, and term may not exceed three years. Although there is no limitation on the number of terms, there still must be an election, properly noticed and conducted. If there is a vacancy, there must be an election. Only if there are no candidates may the board consider appointing someone to the board.” Condo President and Property Manage- ment Employee? Q Is it illegal or unethical for the legal or unethical for the president to work for the following: ‘Except as otherwise provided board president of an association the company that provides community man- to work for the company that man- ages or provides community management are numerous provisions of the law that touch not be a candidate for or member of the ex- services for his association? If it is okay, can on this particular situation and could be read ecutive board or an offi cer of an association the president then be involved in negotiations to preclude it. and the signing of a new contract with the management company? What if he causes the vides, in pertinent part, the following: ‘Each matter before the executive board of the asso- new contract to be negotiated and signed on person who is nominated as a candidate for ciation; or (3) Th e person, the person’s spouse, his own? —Wondering A According to Michael Schul- man, attorney with Wolf, in a potential confl ict of interest for the can- Rifk in, Shapiro, Schulman & didate if the candidate were to be elected to and such person also serves on the board, or Rabkin, LLP in Las Vegas, “Certain provi- sions of Nevada Revised Statutes (NRS) 116, the law governing common interest com- munities in Nevada, have three sections that is under contract to a company for which the statute is not 100% clear, but most people are directly applicable to the facts set forth in he worked, or that such company would bid would argue that in this particular situation, the above referenced question. Additionally, for the contract, the candidate would have to the person concerned would be barred from general corporate law in the state of Nevada disclose that relationship on his candidate’s provides law which will also govern this par- ticular situation. Th ere is no simple answer to 116.31034. this question because it is technically not il- agement services to his association, but there appointed by the declarant: (a) A person may “First, NRS 116.31034 subsection 9 pro- membership on the executive board ... must: or the person’s parent or child, by blood, mar- (a) Make a good faith eff ort to disclose any riage, or adoption, performs the duties of a fi nancial, business, professional, or personal community manager for that association;...’ relationship or interest that would result or would appear to a reasonable person to result for a company that is going to obtain the serve as a member of the executive board…’ “Clearly, if a candidate for the association’s of profi t or compensation based on his em- board of directors knew that the association ployment by the company. Th e language of statement, or he would be violating NRS “NRS 116.31034 subsection 10 provides in subsections 11 and 12, unless a person is if:... (2) Th e person stands to gain any person- al profi t or compensation of any kind from a “One would assume that if a person works management contract from the association as an offi cer, that person will gain some kind YOU’LL LEARN SO MUCH YOUR HEAD COULD EXPLODE. (Our lawyers said we had to warn you.) FREE REGISTRATION: LVCONDOEXPO.COM LAS VEGAS CONVENTION CENTER WEDNESDAY, NOVEMBER 10 10AM-3:30PM continued on page 10