COLUMN: Barbara Holland

Q. Who can I contact to launch an investigation regarding the fiscal practices of some of our directors?

I recently found out that the president has authorized payment of expenses that have not been brought before the board and the treasurer. These checks are not being signed by the secretary or treasurer. Our bylaws state that the president can spend up to $300 without board approval. Anything after that, the board must approve up to $1,000. Anything greater than $1,000 requires the approval of the membership.

A. The immediate answer is to contact the ombudsman's office at the Nevada Real Estate Division. The phone number is 486-4480.

If the office cannot resolve the issue, or if upon investigation, it concludes that the board or specific directors have committed serious violations of the law, the matter would then be sent to the Real Estate Division. The division would review all of the information and could initiate its own investigation.

Ultimately, the directors involved could be brought to a hearing of the Commission on Common-Interest Communities.

Making such accusations will require documentation. Not only would you need copies of the governing documents and appropriate board or homeowner meeting minutes stating these restrictions, you would also need copies of bills and checks that were issued.

Questions that need to be addressed would include:

1. Who can sign on checks?

2. Do checks require two signatures, and if so, who else can sign on checks besides the president?

3. Do these spending restrictions cover all operating expenses, such as utilities, insurance, contracted services, emergencies, or do the restrictions just cover discretionary expenditures?

4. Do these restrictions apply to maintenance issues, which must be repaired due to health and safety issues?

You do not want to place yourself in a position where you could be sued by board members for improper accusations or violating state law for filing a false complaint.

Q. Our condominium complex has a board member who is seriously behind in his association dues. The bylaws do not state what qualifications a board member must have to serve on the board, other than being a unit owner. The management company sent nomination forms, which state that to be on the board, you must be a member in good standing with regard to both association payments and compliance with the covenants.

How do we enforce this procedure? Is it up to the management company to screen nominees and let them know if they are qualified to serve on the board?

A. Since the nomination form is returned to the management company, the initial screenings would take place with its staff. They would check a few things:

1. Is this person an owner of record? If not, he or she must show title to the unit.

2. Is this person delinquent? If so, the management company should inform the member what he or she needs to pay to be placed on the ballot.

3. Is this person in violation of the covenants? If so, the staff should inform the owner that he or she must cure the violation before being placed on the ballot.

The management company should keep the president apprised of these issues. All correspondence to these owners should be sent by certified mail to avoid any disputes that an owner was left off the ballot or not given the opportunity to cure the default so that his or her

name could be placed onto the ballot.

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.

Real Estate home