COLUMN: Management companies offer myriad services

Q. We see little involvement from our management company other than collecting our dues, occasionally producing a one-page newsletter, and attending our quarterly homeowners meetings.

Are there any guidelines or laws covering management companies that represent homeowners associations? What kind of service should an association expect from a management company?

A. The Nevada Real Estate Division regulates property management companies. Such companies as well as individual managers must have a property management permit or an association certificate.

The division sets qualification standards, required educational courses and exams, and experience requirements. In addition, the division can take disciplinary measures against managers, such as fining, requiring additional education, and suspending or terminating a manager's permit or certificate.

The contract between an association and its property management firm outlines both parties' responsibilities. Contracts differ depending upon the functions that the association wants the management company to perform.

Some boards of directors are quite active and only want the management company to handle accounting functions, while other boards may seek more services.

Typical services may include:

--Fiscal and accounting duties, such as preparing the annual budget and monthly financial statements, handling banking and billing, assisting auditors, and processing payroll;

--Protection of property. The manager recommends insurance coverage, assists in insurance claims and helps procure insurance bonds;

--Meeting organization. This may involve mailing meeting notices and proxies, distributing ballots and agendas, taking minutes, and preparing reports for approval;

--Records and correspondence, such as maintaining owner records and owner and renter lists, attending appeal hearings, and assisting legal counsel;

--Inspection of property, particularly exterior structures and common areas, to determine if it is in compliance with ADA and other building codes; check energy and water conservation programs; prioritize necessary work to correct problems; and send letters to residents not in compliance with the rules as determined by a visual inspection of their property; and

--Other administrative functions. The property manager may oversee personnel, inventory furniture and equipment, communicate with residents, supervise contractors and employees, negotiate and secure contracts, and review governing documents to ensure that required statutory changes have been recorded.

I suggest that you ask your management company to describe the services it provides during the homeowner comment period at the next board meeting.

Q. Is it legal for a new community, revising its covenants for the first time under the control of the homeowners, to delete references to the declarant?

A. The purpose of the covenants is to establish guidelines for the management and operation of a homeowners association. It lays the foundation for relationships between homeowners and the board, other homeowners, and the declarant (developer).

The declarant protects his developmental rights in the covenants, which may include the marketing of new units to be sold, annexing additional phases, approving amendments, and selecting the board of directors.

Once the declarant has transferred management to the homeowners and is no longer involved with the association, many sections of the covenants become obsolete.

Many associations delete sections pertaining to the declarant that are no longer applicable to their community.

Some sections are modified to replace the declarant with the board or a specific committee.

Unless your covenants state that the declarant will continue to be involved with the association, there is no legal reason that would preclude an association from deleting the declarant from the covenants.

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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