Power of Attorney - January 2001

Choosing an Attorney for Your Homeowners Association –

What Decision-Makers Need to Know

by James Adams

If you live in Nevada, the chances of your home being in a neighborhood controlled by a homeowners association are excellent. In fact, the present trend in development is to record restrictive covenants against all the deeds in a given tract. These covenants, called CC&Rs (covenants, conditions and restrictions), are recorded against the property, and limit what the owner can do with his property. CC&Rs also allow for the creation of a homeowners association (HOA), which is the body that will enforce the rules to which the property owner has agreed.

Creating an association can protect all the homeowners in a development. For example, CC&Rs require all homeowners in a tract to keep their property up to a certain standard. This can eliminate the possibility of your property value being lowered because one of your neighbors refuses to maintain his or her property. Property values, therefore, are kept consistent within the tract and residents are afforded the quiet enjoyment of their property, free from visual blight and noise pollution. Many controlled developments also have amenities like swimming pools, playgrounds and green space, which can make homes subject to CC&Rs more appealing to the home-buying public.

These advantages, however, are not without cost. All HOAs assess annual dues, which usually are payable monthly. Large common-areaexpenses like painting or landscaping often require a special assessment in addition to the monthly fees. Most HOAs are administered by a board of directors. These directors generally own property within the tract and are elected by the other owners. The HOA is generally empowered to pass rules and assess noncompliance penalties against homeowners within the development. The CC&Rs also contain regulations about pets, vehicle parking and other things that may affect the quality of life in the development. The board is responsible for enforcing these regulations.

It is not surprising that the number and types of legal problems than an HOA can encounter vary greatly. Some HOAs have problems just once a decade, others once per month. It usually falls to the board of directors to make the decisions about legal advice and legal representation for the HOA.

Several factors are important for an HOA to consider when making a decision to hire a law firm. Perhaps the most important is hiring a firm with experience in real estate matters. Having a familiarity with CC&Rs and homeowners association law enables the law firm to be more effective in a shorter time, thus saving the association legal fees. Since the laws dealing with HOAs can change rapidly, it’s a good idea to look for an attorney with recent experience in this area of law. In the long run, choosing an attorney with relevant experience, even though he or she may bill at a higher rate, may save the HOA money because it is likely that less attorney time will be needed for legal research.

In addition to looking at real estate experience, it is also important for the HOA to question the attorney regarding the depth of the firm’s support staff. Paralegals and legal assistants can handle much of the routine items of business, again keeping costs down for the HOA. Further, if the HOA has any specific legal problems, it should question the attorney to determine whether he or she has experience handling similar cases. While every legal situation is unique, various aspects of the case can be the same.

Generally, it is advisable before making the decision to purchase a home in a tract controlled by an association, buyers should carefully read the association’s CC&Rs and any other related rules that restrict the residents. Homeowners should be sure they know what regulations they will be required to follow. If they cannot abide by the rules, they may face stiff fines. Homeowners should also remember they will be voting to elect the governing board of directors of their association. Since the association will be making decisions on their behalf, they should make sure the people they vote for reflect their views of how the association should be run. By being proactive and interested in how their association works, homeowners are less likely to encounter problems with the association and more likely to agree with the decisions it makes.

James Adams
James Adams is an attorney at John Peter Lee, Ltd. in Las Vegas. His practice areas include Business Law and Commercial Litigation.