COLUMN: Barbara Holland

Q. We received a note from our association stating that a vote would take place to limit investors and rental properties.

Three properties were already in escrow to be sold to investors when this proposal came forward. We called the manager of the association who told us if they close before the cut-off date, they would be "grandfathered." At this point, no one can or will provide us with the cut-off date. They refer us to attor- neys who do not return calls.

We attended the special meeting to vote on the restriction. The management said there was a quorum to pass the vote. How long and what procedure do they have to perform for us to be grandfathered?

A. First, you have the right to ask specifics pertaining to the vote. What number constitutes a quorum? What number is required to change the governing document -- in this case, the covenants?

Since this is a material change in the governing docu- ments, how did they notify the mortgage lenders, whose consent they must obtain for this type of change? What was the vote of the lenders?

Assuming that all is in order, the amended covenant should be recorded. State law requires a 30-day notice to the membership of the new regulation before its enforcement.

In your case, if the Veterans Affairs sale was in escrow before the new covenant was passed, it should be grandfathered because the new regulation did not exist when the home was placed in escrow. The closing date should not be a factor.

Q. In our old covenants, it states that no home shall be used or occupied for any purpose other than a single-family dwelling. It also has a cash security deposit requirement both for owners and tenants. Both of these covenants have been eliminated.

The rationale given by the board is that the revisions are required by changes to NRS 116 and other laws. Could you review these governing documents and explain why these changes were made and if they are legitimate?

A. First, NRS 116 does not address the issue of tenants living within an association. The association could still have maintained its covenant requiring a cash security deposit for tenants.

In the revised governing documents, the association offers a legal definition of family, one that agrees with the federal government's definition. It is not necessary to include this definition. You may want to ask the board why they included this information. It has no bearing on whether or not a person is a tenant.

In the previous covenants, it states that a residence may not be occupied by more individuals than permitted by applicable zoning or governmental regulations. In the revised covenant this clause is deleted. Whether or not it is included does not change its applicability. If there were 10 people residing in a two-bedroom home, it could still be grounds for the association to file action.

The association also included language indicating members of the owners' family residing at the development may use and enjoy the common areas. Owners have always had the right to extend their use of common areas to their family members who reside at the community. Most governing documents extend the same right to tenants.

I understand you are concerned that the revisions and lack of restrictions would subject your community to abuse and have a potential negative impact. Other than changing the cash security deposit, the association may still enforce its regulations, regardless of whether the household has owner occupants or tenants. Warning letters and fines can still be issued. The board could even initiate legal action against an owner to have a tenant or tenants evicted, depending upon the type of violation.

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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