COLUMN: Pardon for impropriety irks owner

Q. Last year, the president of our board hired an unlicensed consultant for $3,000 to supervise wall construction without the board's consent. When the property manager refused to write a check, the president withdrew the money from the association's bank account.

The property manager helped us acquire an attorney to recoup the $3,000 from the president. In the meantime, however, two volunteers filled board vacancies and a majority of the new board voted to forgive the cash withdrawal. Because of this pardon, our property manager, and two board members, including myself, resigned.

Another homeowner and I want to file a complaint with the ombudsman's office to mediate the issue, but we would have to pay a filing fee plus the cost of the arbitrator or mediator. Do we have any other recourse to receive the $3,000 for our association?

A. First, your association should immediately change its policy for signing checks and withdrawing funds from association accounts. All accounts should require two signatures. Since management companies must either have a property management permit or certificate to manage homeowner associations, one of the signature parties should be a representative of the management company since they are under state regulation.

The second issue is that the previous board members probably did not have to resign over the conflict. If their president was acting so unilaterally, the board, depending upon its covenants and bylaws, may have been able to vote to replace the president with another director. This may not remove the president from the board, an action which may require a vote from the homeowners.

If homeowners believe the board acted improperly by forgiving the $3,000, they could initiate a few actions. One is to file a formal complaint with the ombudsman's office and ask for either arbitration or mediation, which may lead to a small-claims action. They could also ask the board to reconsider its decision. Another option is to call for a special meeting of the homeowners to vote on removal of the president.

Q. During a hearing, do we need to have a property manager present or can we have the secretary record the information and give it to the management company afterward?

A. You do not need to have a member of the management company present during a hearing, but I would recommend it. You want to protect the association and the board by ensuring that your hearing meets all of the guidelines established by state law. Sometimes, board members become too subjective and overstep their boundaries in hearings.

Questions for Barbara Holland may be sent to Association Q. & A., P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759.

Barbara Holland, Certified Property Manager, is president and co-owner of H&L Realty and Management Co. She is a member of the Institute of Real Estate Management and is the author of two books on the subject. Holland is a past president of the Greater Las Vegas Association of Realtors.

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