NV agency opinion: stop making homeowners pay HOA attorney fees

The purpose of the homeowner in an HOA is to pay and pay and pay.     Donie Vanitzian, a homeowner rights advocate and author, said it back in her 2002 book, Villaappalling! Destroying the Myth of Affordable Community Living,

When homeowners move into [an HOA] they have only: Obligations to pay out money. . . They also pay out when and if the board tells them, ‘You have to pay’  . . . . Should you disagree with the board’s order (agenda or whim) to pay, you still have to pay to prove that you don’t have to pay.  (P. 296).

This message was recently taken to heart by the Nevada Real Estate Dept. (RED) in response to a request for an advisory opinion by homeowner rights advocate, Jonathan Friedrich.  This issue is a common, and one example of the broader issue of, “the homeowner pays and pays everything.”  Friedrich asked: “Does NRS 116.3115(6) give an association the right to charge a unit’s owner an attorney fee when the association’s attorney attends a hearing against a unit’s owner?”

The RED concluded,

Exercising the due process right to a hearing on an alleged violation under NRS 116.31031 is not in and of itself “misconduct,” “willful misconduct,” or “gross negligence.” Associations should not be using NRS 116.3115(6) to pass on any attorney fees resulting from a hearing, especially where the association imposes a fine to the maximum extent possible under NRS 116.31031. NRS 116 specifically provides for attorney’s fees to be provided to prevailing parties under NRS 116.4117 in civil actions to enforce the governing documents or NRS u6. The court is not required to award attorney’s fees even if an association is the prevailing party. Association board members who chose to have an attorney present at alleged violation hearings do so at the expense of all the unit owners. Such expense cannot be passed on to a particular unit owner.

Let’s look into some of these money making practices, not for the HOA, but for the HOA attorney, which serve to intimidate the homeowner by means of legalized extortion – demanding payments under the threat of harm or injury.

Understand that the modus operandi here – the reason for doing – is fostered by the legal HOA scheme that allows the HOA attorney to control and strongly influence board decisions in its favor.  (Relying on expert advice will relieve the director of any personal liability).  And that is to go to court under the justification, “You can’t let the masses get away with anything as it undermines your authority to rule.”  My words, but to the point.  So, why not adopt a hostile, no holds barred approach which generates income for the attorney. And, making this approach more appealable to the board by pointing the HOA legal scheme, the attorney tells the board, “Don’t worry, you can charge all this back to the homeowner.”

Another  prevalent tactic occurs in an attempt to work out issues with the board on matters of alleged fines or late assessment payments.  The homeowner is often told to talk to the attorney and not anyone else, where the attorney tacks on his usual fee of $150 – $300 per  transaction.   Shades of  banana republic justice!  This amounts to legalized extortion —  pay to resolve our charges even before a hearing on the merits takes place.  But, we all know the hearing is just window dressing  — we’ll give you a fair hearing before saying, “Guilty.” Makes you wonder why the HOA attorneys do not fight for a fair and just due process procedure like that offered by the Office of Administrative Hearings in Arizona, doesn’t it?

I congratulate the Nevada RED for its just and fair opinion, and Jonathan Friedrich for seeking the opinion.  We need justice for homeowners from our state protective agencies to put a stop to these obvious HOA banana republic tactics.

We need to seriously look into the roles of the HOA attorneys and their overbearing advice to go to court no matter what.   And many times these court actions are frivolous and violate rules of civil procedure relating to  a meaningful action  based on an examination of the facts and the law by the attorney.