The homeowners association manager is not a board director and is not the client. And unlike the board, the manager has conflicting interests and allegiances.
November 24, 2013 By Donie Vanitzian, JD
Question: I have been on my homeowners association board for two years. All communication between the board and the attorney goes through the association’s manager before distribution to the board. I just discovered the manager has been withholding communications the attorney has written to the board. I’ve also found instances where the manager regularly emails the association attorney stating, “The board wants” and “The board would like you to,” when in fact the board never discussed such matters.
While attempting to communicate this situation to the attorney by email, which I assumed was confidential and protected by attorney-client privilege, his response was instead indiscriminately forwarded to the manager by one of the attorneys in the law firm. At the following board meeting, the manager stated the association’s attorney “recommended” the board pass a resolution that no board director contact the attorney for any reason whatsoever, which the president and majority of the board then passed. This effectively cuts off all directors from any attorney advice to run the association properly.
I am concerned that because all of our legal matters are communicated via a third party, we have lost our attorney-client privilege and we are out of the loop. Does the attorney have an ethical responsibility to ensure that communication gets to all directors in a timely manner and is not censored by a third-party vendor?
Answer: The quick answer is yes, but not exactly. The basic rule is that when an attorney represents the board, the fiduciary duty is owed toward every board director, and the board as a whole has the ultimate say on all issues. But the board is a group, and whenever a lawyer represents a group of people — any group (the board being just one example) — the attorney has the right to ask that all communications go through designated directors. Otherwise, the lawyer could be receiving continual and conflicting communications.
Boards should be mindful of the possibility of manager interference with board duties. The manager is not a board director and is not the client. Nor can the manager take on the role of legal liaison between the board and its attorney because, unlike the board, the manager has conflicting interests and allegiances. The fact that the manager undoubtedly works for more than one association may give rise to conflicts.
More important, while the manager may recommend incurring additional legal charges, he or she does not have to pay any part of the association’s legal fees. That could lead the manager to give the attorneys more leeway in deciding what matters to pursue than is healthy for the association.
For these reasons, the manager cannot become the go-between for the lawyers and the board. Instead, the board might consider appointing a homeowner — it could be one person or a small committee — to interface with the attorneys, and the attorneys must then be instructed to communicate through those designated directors or committee appointees.
The attorneys have an ethical responsibility to ensure that their communications get to the board in an unadulterated manner. As for the manager, it is unethical for him or her to tamper with the board’s mail and communications, no matter who the sender is.
With regard to your phone call to the attorney: You were calling as a board director regarding association business. While you may have had no right per se to expect your communication to be kept secret from other directors, you certainly had the right to expect your communication to be kept confidential from the manager, who is a third-party vendor. It appears the attorney has ignored that fact in a rather vulgar way.
There is an ever-present danger in homeowners associations that the board, whose members usually come and go with election cycles, may become subservient to the “hired help,” that is, to the managers and law firms whose tenure tends to be longer. This can lead to abuses of the titleholders, who are required to pay the fees of the hired help. Even though board directors are titleholders themselves, many often prefer to avoid the hard work and difficult decisions, preferring not to rock the boat even when a third-party vendor like the manager is at the helm.
HOA Perspectives - the Fox & Hounds of HOA Business and Politics 
In early 2013 group of members of Crossroads III, Las Vegas, NV decided to run for the board of directors because there was a lot going on that we were not happy with. The so called bylaws at the time stated that you did not have to be a member to run for the board. Well as we found out later NRS116 is the ruling factor in determining who qualifies to be on the executive board.
One of our main concerns was that the powers to be were controlling who was on the board. Sherryl Baca, of Community Management & Sales seemed to be in total control. People were rebelling against her over controlling leadership. Straight to the point we wanted her gone yesterday. She had a reputation of getting rid of her opposition.
So what you had now was a community rallying a disable single mom of a down syndrome daughter with her resourceful courage to take on everything for the next two years. David and Goliath definitely so! Or should we say a pack of bullies going against what the community needed, new blood in management, on the executive board, and to rid the community nuisance, fire the attorney. He was consuming all their reserve assessments so willing signed over to him in the form of checks written by Diane Bender, Maureen Nickel and the community manager.
So to simplify the story lets refer to articles in a newspaper who has helped Crossroads III through the years. Thank you Rana Goodman and Tim Stebbins. Another person you need to be aware of is William P Wright. She was hired by Sherryl Baca to go after those who wanted her gone is what we believe has happened. This attorney will be mentioned in the articles but you must be aware he is a managing member of two organizations. Could this be a vulture circling high above the HOA industry. CAMEO, Community Association Management Executive Officers, Inc and LVHCA , Las Vegas High Rise Condominium Association, Inc. Keep this in mind as you read the story.
William P Wright?
Buzzards fly the Nevada skies!
You may find this interesting blog!
http://www.hoacorruption.com/home
Las Vagas Channel 13
http://www.scrippsmedia.com/ktnv/news/contact-13/hoa-hall-of-shame/
Newspaper articles
The Vegas Voice, Las Vegas Newspaper. Rana Goodman on politics
On My Soap Box: The Flip Side of HOA Wars
8/3/2013
Dorothy Chavez, Kay Cardoza, Connie O’Toole
By: Rana Goodman
It has become common, when thinking of HOA (home owner associations) complaints, to assume that I am referring to an out-of-control board of directors. However this is a very different story – a story of an HOA with a board made up of 5 women. Three hardworking ladies that range in age from 50 to 83, the remaining two board members do not attend meetings, do their jobs or are willing to step down
The three were determined to bring their community, Crossroads III, located at Stewart and Lamb , back to a place they can all be proud of.
Enter center stage to this matter, the main protagonists – the two individuals every HOA board hires to guide them according to the Nevada Revised Statutes (known as NRS 116) – the attorney and the community manager, known as the CAM.
Now let us be very clear about the rolls these two are supposed to play.
The attorney advises the board when asked . He does not actually work for the association, although he is paid by association funds.
The CAM takes instruction from the board, via the President usually, and runs the normal functions of the association as instructed by the board .
In other words, “the buck stops” at the board of directors.
Yet at this association, attorney William Wright and CAM Sherryl Baca of Community Management & Sales obviously forgot or ignored NRS 116. I was given copies of correspondence written to the community and the board from attorney Wright.
He “apparently” took it upon himself to send letters to the entire community, claiming that their president was not qualified to sit on the board due to a legal technicality. He claimed that she did not own the unit and thus cannot be a board member.
Not only was he over stepping his authority, he was totally incorrect. She always had documents to prove ownership and yet, she didn’t need to prove anything to him.
Ms. Baca, on the other hand went so far as dictating to the board that they could not hold a meeting unless she said so. When the board notified the community of the open meeting, Ms. Baca sent out a notice cancelling it.
I was invited to attend that meeting last month, (which was not cancelled, notwithstanding Ms. Baca’s notice) and the room was filled. Ms. Baca, who as CAM must attend all meetings did not come , neither did board member, Maureen Nickel, the secretary/treasurer.
You might think not attending would be no big thing, and you would be right, had Ms. Nickel given her required financial reports to another board member. However she did not and in not doing so, the community was not able to get any idea of the state of their finances.
The board announced that during their executive session, attorney Wright had been fired.
Mr. Wright had forwarded an outstanding bill for $4,000 and the board reported that it will only be paid when it is told who authorized those services. Apparently it was not one of the three ladies who regularly serve on the board, the only people authorized to do so.
The most gratifying part of the incident for me was during public comment. A woman, rumored to be a friend of the CAM insisted on an explanation regarding the president’s eligibility. She was advised by the newly appointed attorney, “Quite simply, Mr. Wright is verywrong.”
The board further authorized the new lawyer to send a letter to William Wright instructing him to stay away from the property. I also have a copy of that document and must say, it is the perfect one-two punch to deal with this “legal bully.”
Rather than performing his professional and fiduciary duties, as well as guiding the board to do what’s best for the HOA, Mr. Wright behaved like a bull in a china shop and tried, along with Ms. Baca to take over that community.
Personally, I think they should both find another line of business – perhaps in the penal system.
The Flip Side of HOA Wars #2 It’s All About Money!
9/6/2013
HOA Bills bills bills
By: Rana Goodman
The Flip Side of HOA Wars Part II: It’s All About Money!
Last month, I wrote about three senior ladies who serve on the Home Owners Association board of the Crossroads III Community in North Las Vegas. Part II will bring you up to date as the wheels of justice slowly turn.
While the board tried to unravel the mess created by a “bully association attorney” and a community manager who don’t seem to understand “boundaries,” the “gold rush” is on for “billable hours.”
While we might argue right and wrong of an issue, I am of the opinion that in addition to the legal point, there is also a moral one. At stake here is the “pot of gold” not belonging to these 3 women, but from the approximately 200 people – namely the residents of the community.
For each step that our “antagonist” attorney takes, his financial clock keeps ticking; this in spite of the fact that there is a simple, low cost way to settle things. The current board, let’s call them “Team Chavez,” wants to hold an entirely new election and let the residents decide.
The problem with this common-sense solution is that the attorney won’t earn anything with that solution and the current CAM (community manager) Sherryl Baca of CMS Management will be fired for a second time if “Team Chavez” wins.
As I previously wrote, association attorneys are normally hired on a case-by-case basis. Their job is to advise the board when asked.
However, for some unknown reason, attorney William Wright felt the urge to investigate the personal status of one board member. The woman was certified by the CAM upon election and voted in by her peers as president.
Rather than call and advise her that he believed that there may be a potential problem, this attorney (without any board or official authorization) set upon a crusade to remove her from the board. He began a letter writing campaign to other board members, residents, the Nevada Real Estate Division of Business and Industry; even this woman’s daughter.
Now what happens when lawyers write letters? Tick-tock, hourly billing.
The interesting part was that the president and two other board members had no access to the financial records and bank account of the association. Therefore the residents have no idea as to how much Mr. Wright has been billing the community since his last $4,000.00 bill was presented at the July, 2013 meeting.
One fact however remains clear. No legal work was authorized or approved by any of the members of the board who were present.
At that meeting, Attorney Wright was fired, and a new law firm hired – but herein lies the problem. Without access to the association bank accounts (held hostage by the CAM and “team Wright”) there is no way to pay their new attorney other than to dip into their own pockets. Remember, we are talking seniors on fixed incomes.
Attorney Wright has guided the balance of the board, “Team Wright” into a so-call emergency meeting to appoint/elect (without a quorum no less) to replace the president. Attorney Wright advised a complaining resident that, “no, I’m not replacing Ms. Chavez, she was not really on the board.”
Tick-tock goes his billing, as he orchestrates the meeting creating a second board. And the legal fees keep going up.
Attorney Wright’s next attack, alleging that there was a “violation of state law” on behalf of the association, filed three Alternative Dispute Resolution (ADR) complaints against Ms. Chavez, her significant other and Ms. Chavez’s daughter (a military veteran who recently served in Afghanistan). The association will have to pay for Ms. Chavez – the other two are on their own.
By the way, I have seen the fees in these ADR arbitration matters go as high as $25,000 per case. As I said, follow the money.
This entire matter could easily and quickly (and fairly) be resolved and finalized by a new board election overseen by the Nevada Real Estate Ombudsman’s office. An election by the residents will answer all questions and concerns and hopefully allow the neighbors to live in peace.
My big question is for both the Nevada Bar and the Real Estate Division. How and why do you allow behavior like this?
And I understand William Wright is going to be teaching classes for the Real Estate Division on HOA law… REALLY?! Once again, justice and fairness loses to attorney fees.
Crossroads Scotti
5/1/2014
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By: Rana Goodman
Several months ago I wrote a series about the board of directors at a home owners association (HOA) called Crossroads III and their trials and tribulations. They were fighting with their community manager and association lawyer, who were in control of half of the board, refusing to hand over documents and obstructing the running of the association in general.
Every attempt to get help from the real estate division had failed, and as I reported in the paper and on this site, everywhere I went to try and secure help for these ladies failed. County commissioners, their assemblywoman, the senior law project, everywhere. But then one day I was introduced by a friend to an attorney by the name of Richard Scotti who is running for district court judge. She told me what a nice man he was and that, not only was he running for a judgeship, but he hated people who took advantage of seniors. My friend thought I should talk to him about Crossroads III.
I must admit that I didn’t have much hope when I called Richard Scotti, after all, every time Dorothy, the president of Crossroads III had “been up at bat” against attorney William Wright he had defeated her soundly and kept coming back for another “pound of flesh.” (Please see prior stories in this section.)
I held my breath, picked up the phone and called Richard Scotti , I told his assistant who had referred me, half expecting her to say he would return my call, but she didn’t, I was connected immediately. I asked if he had a few moments so I could “bend his ear.” We talked for almost thirty minutes while I brought him completely up to date on what William Wright had put this association, and three of its board members through.
I say the association, because although his venom was aimed at one board member in particular, the association had to pay the legal fees and is still paying each time he dreams up yet another legal action to bring against her. The cash register just keeps on ringing and no one stops him…… YET! And yes, before you ask, complaints have been sent to the Nevada Bar Association, in my opinion, I’m sure they went straight into the circular file.
I think the tipping point for Mr. Scotti came while he was going over the transcripts of the last court hearing filed by Attorney Wright that followed an arbitration where Dorothy Chavez, who was the president of the board at Crossroads II at the time, actually won.
Wright had been claiming that, since, when she and her daughter purchased the condominium together, only her daughter’s name was on the deed, therefore Ms. Chavez had no right to run for the HOA board. The arbitrator stated that Ms. Chavez did not mislead the HOA with malice and since she was now on the deed, as such, since she had offered several times to step down and run again for election, she, and her board were to be a “do nothing board” and hold the election as already planned within the next two months.
Unhappy with the ruling and not willing to run the risk that an election might return Dorothy Chavez to the board, Wright went into district court to challenge the ruling and that time he prevailed removing Dorothy from the board.
In spite of the fact that Richard Scotti is knee deep in a campaign for District Court Judge, he found the time to meet with Dorothy Chavez from Crossroads III and has stepped up to act as counsel in her case bro-bono. Our conversation at that moment was just about the legality of removing Dorothy and did, or didn’t Attorney Wright mislead the district court judge in the hearing that caused it.
The same afternoon that we left that meeting Dorothy Chavez was served with another legal action from Attorney Wright… cha-ching- the legal bill keeps mounting at Crossroads III, this time, with the regular elections weeks away, attorney Wright was claiming that the by-laws of the association were flawed and he wanted them amended. As such the elections should be delayed by a year. With three members on the board now out of a five member board who supported him, should this be accepted, his position as association attorney would keep him in his job for at least another year.
Dorothy must have called Richard Scotti at the same time she sent me a text message because he was leaving a message on my phone as I walked through my door. I think, and I’m sorry Mrs. Scotti and Dan, but at that moment I also fell in love with this incredible man. He told me that even with everything on his plate he could not stand by and watch this travesty happen. He was in all the way and would be there to help Dorothy Chavez and the other law firm that had been helping in this case.
Dorothy was no longer covered for any fees by the association and cannot afford ANY legal fees, let alone a blitz attack of a vulture like William Wright has brought down on her. But there will be no bill coming from Richard Scotti and there are, I know in my heart, a special place saved in heaven for men like this.
Thank you, from the bottom of my heart, Richard Scotti…. and by the way…. You have my vote!
Who’s Looking Out For Us?
5/27/2014
1 Comment
By: Tim Stebbins
Several months ago The Vegas Voice ran a series about the board of directors at a home owners association (HOA) called Crossroads III. The HOA was being manipulated by their community manager and association lawyer, who controlled half of the board; refusing to hand over documents. Basically they were in control of the association.
Every attempt to get help from the Nevada Real Estate Division, the first stop for a homeowner seeking help, had failed. And as was reported in the paper, everywhere help was sought also failed – including county commissioners, the district’s assemblywoman, the Senior Law Project, and most importantly, the government agency charged to assist homeowners.
Nevada has only one real estate division office (known as NRED) to serve all residents living in HOAs. Conservatively speaking, just in Las Vegas and Henderson there are approximately 1.5 million people.
Yet when problems arise, a homeowner, by law, cannot seek judicial relief without first going through the procedures at NRED and/or its so-call ombudsman. The obvious answer would seem to be that one should never purchase a home in an HOA community, but if you look around, most attractive neighborhoods are built these days as a planned HOA.
Now this might seem like a minor inconvenience to someone who has never run afoul of one, but would it surprise you to learn that the paperwork at NRED is, in some cases, three years behind?
Would it surprise you to learn that an attorney representing an HOA board can zealously file complaint after complaint in court against a resident, (and of course billing the HOA board for such legal services) while the NRED complaints sit in a stack waiting for a hearing.
In the Crossroads III case, the attorney filed for arbitration and lost when the arbitrator stated that the defendant did not mislead the HOA with malice. Since the defendant had offered several times to step down and run again for election, she, and her board were to be a “do nothing board” and hold the election as already planned within the next two months.
Unhappy with the ruling, and not willing to run the risk that an election might return the defendant to the board, the attorney went into district court to challenge the ruling. This time he prevailed removing the lady from the board.
Since the election was two months away, he next filed a new action, (yet to be heard) to amend the bylaws so the election would not be held for another year. Do you hear the association cash register ringing as his bills get paid?
The biggest tragedy is that Crossroads III is not a country club or plush community. It consists of working class people trapped by a bureaucratic system of rules that have no wiggle room and an unscrupulous manager and lawyer that are breaking the bank just because “they can” and no one will bother to stop them.
Another resident contacted us regarding a fine of $2,000 for parking an RV at her home a year ago. She has had no hearing, no photographs, (both required by law) but is contesting such unilateral actions against one of the largest management companies in the State.
As you can imagine, the fine and interest keeps mounting.
My question is, why do our legislators seem to feel the topic of HOAs is something to duck rather than correct?
Tim Stebbins is on the Board of Directors of the Nevada Homeowner Alliance and is well versed in the Nevada Statutes (NRS116) governing HOAs. He welcomes your questions at: tstebbins@cox.net.
Rana Goodman
Crossroads III Homeowners Association – Update
On My Soap Box
Remember the series we ran last year about the Crossroads III Homeowners Association and the “war” involving three senior ladies on the board of directors, the association attorney and their management company?
After two years of struggling to get help from every agency, politician, and legal source you can name, Board member Dorothy Chavez had her day in court. To make a long story short, the association was ordered to hold a new election, which it finally did.
Dorothy Chavez was not only elected to serve on the board, but was chosen to be President of the HOA.
One of the first requests made by the homeowners was to fire the HOA attorney, William Wright. As we wrote, he caused so much grief and submitted legal bills of approximately $100,000 – far more than the association has.
A board meeting was called with Ms. Chavez abstaining under the Dorothy Chavez circumstances due to her past conflicts with this lawyer. A letter was sent informing him to cease any work on the association’s behalf and that his services were No longer desired.
The issue of terminating the attorney was discussed in an executive board meeting (since it concerned a contract) with the actual vote placed on the agenda at the February meeting. However, true to form, the wailing and demands from attorney Wright, began immediately.
He demanded to see minutes and documents to which he, as not being a property owner is not entitled.
These demands were followed by a complaint to the Nevada Real Estate Division.
Thankfully, for those of you who live in HOAs mediation is now mandatory and the matter was quickly settled when the attorney was informed that his status was to be on the agenda of the next open meeting. The evada Real Estate Division advised that the agency were glad to see that Crossroads III had their problems behind them and hoped the new board would now be on the way to a fresh start.
As for me..well, I would love to understand why, after all his attorney problems, grief and horrific billing to these people during the past two years would this lawyer think he would still be retained?
Las Vegas Review Journal
Posted June 5, 2011 – 2:00am
HOA lobby puts on the heat in Carson City
Glenn Cook
is senior editorial writer for the Review-Journal. His column appears Sunday in the Viewpoints/Opinion section.
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With the 2011 Legislature wrapping up and municipal elections at hand, it’s time to empty the notebook.
— Of all the special interests seeking favors in Carson City this spring, none has been more audacious than the homeowner association and HOA management industry.
First, they gave a juice job to a sitting state senator, Democrat Allison Copening of Las Vegas, to guarantee sponsorship of their policy wish list. They threw piles of campaign cash at lawmakers to secure consideration of their bills. Then they hired an army of big-time lobbyists to cover the details and line up the votes for their power-grabbing, self-serving legislation.
As of Friday, their two babies — Senate Bill 174 and Senate Bill 254 — were still alive in Carson City and threatening to cause all sorts of problems for homeowners, real estate investors and the brutalized housing market in general.
SB254 would require mediation and arbitration — at a cost of hundreds of dollars — for homeowners who lodge complaints against their HOAs. The bill effectively penalizes homeowners who already feel they’re being unfairly penalized and harassed by their HOAs.
But that lousy proposal isn’t nearly as bad as SB174, which would lock into statute some of the most outrageous collection and lien fees in the state. If a property falls behind on its assessments or doesn’t pay fines and the HOA turns the bill over to a collection agency, under SB174 the agency could collect as much as $1,500 in fees — including a $350 lien release fee — plus $1,000 in third-party costs, plus $200 for the property management company.
That’s $2,700 in penalties for debts that in many cases total just a few hundred dollars. A bill that big can allow HOAs to put distressed homeowners into foreclosure much more quickly than any lender would.
By comparison, the city of Las Vegas charges only $29 for lien releases on past-due sewer bills and Republic Services charges $55 for a lien release on unpaid garbage bills.
“We’re in the business of picking up trash, not placing liens on houses and making money on collections,” said Bob Coyle, Republic Services vice president of government affairs.
Allowing debt collectors to pocket $1,500 for making a few phone calls and sending out a couple of certified nasty letters, especially in this high-unemployment economy, is a travesty — especially when you consider that many of the collection agencies used by HOAs are subsidiaries of HOA management companies.
SB174 isn’t about keeping HOAs whole when assessments aren’t paid. It’s about protecting a highly profitable arm of HOA management companies.
Of course, the destitute, foreclosed former homeowner doesn’t usually get stuck with these bills. The buyer of the foreclosed property does. And huge liens tend to scare away buyers.
The bill’s defenders argue that some collection agencies have attached $5,000 or more in fees to unpaid assessments, and that a $2,700 cap would rein in debt collection abuses. I say a cap that high rewards their bad behavior.
This cash grab is horrible policy — and worse politics.
— — —
Another bill that has raised a few hackles in Carson City is Assembly Bill 259, which would divert some existing court fees to nonprofit legal aid services.
The prime lobbyist and beneficiary of the bill is Barbara Buckley, the former Assembly speaker who was term-limited out of office last year, and who serves as executive director of the Legal Aid Center of Southern Nevada.
When it comes to social service organizations that deliver bang for the buck, it’s hard to top Buckley’s organization, which provides a voice for foster kids and plenty of people who lack the resources to protect their own rights.
But Buckley made plenty of enemies on the Republican side during her years in the Democratic leadership. As a result, GOP lawmakers have little interest in voting for the bill.
If AB259 becomes law, it will be a testament to Buckley’s power.
— — —
Las Vegas mayoral candidate Chris Giunchigliani is extremely impressive in person. The former assemblywoman and current Clark County commissioner knows everything about everything, from parking meters to liquor licenses, from work cards to intergovernmental relationships.
But Giunchigliani is, at her core, a career politician. And when she gets talking, she can shovel horse manure with the best of them.
During her endorsement interview with the Review-Journal’s editorial board, Giunchigliani dismissed previous campaign statements that indicated support for city tax and fee increases, and she distanced herself from her big-spending, tax-hiking, give-the-public-employee-unions-everything-they-want-and-then-some voting record. In doing so, she providing my single favorite quote of the municipal election cycle.
“I believe I am a fiscal conservative,” she said with all sincerity.
— — —
Last week’s column on the drive at Las Vegas’ Staton Elementary School to collect $250,000 in donations to cover expected budget cuts sounded the alarms within the state’s education establishment — and had critics tripping over their own arguments in response.
Their thinking goes like this: More than anything, we want parents to be deeply engaged in their children’s education — but not so engaged that they might be willing to pay out of pocket, beyond their tax bills, to fund it. Because that isn’t fair to underachieving schools, which lack the parental involvement we say we desperately want. So just give us higher taxes, and we’ll take it from there.
Want to know what’s really unfair about education funding? Clark County’s underachieving schools already get more money, per student, than high-achieving ones. They get more state tax money, have more special programs, get more in federal grants and subsidies, and most of their students get free breakfast and lunch to boot.
Yet parents at Staton Elementary, which gets less tax money because it performs better, should be discouraged from taxing themselves to make sure they keep what they have?
— — —
The great state budget compromise of 2011 is proof that serious education and collective bargaining reforms have no chance of passing the Nevada Legislature — ever.
So who’s going to step forward with petitions and qualify them for the 2012 ballot?
Glenn Cook (gcook@reviewjournal.com) is a Review-Journal editorial writer.
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