Developer Control and the infamous AB 192
Much confusion and misinformation exist around developer control of HOAs and the now infamous legislation, AB 192 (2015).
First, it is my opinion AB 192 did not impact SHCA. This position is not acknowledged by SHCA's majority appointed board. Thus, it refuses to effect the end of the declarant's control despite reporting over 75% of the units, as established in our CC&Rs, having been conveyed. It is why I have engaged in litigation seeking a court ruling SHCA is opposing.
I believe AB 192 to be an absurd piece of special interest legislation that provides for developer control of an HOA board while holding only a 10% interest in that community. AB 192 lowered the no later than mandatory developer control interest from an arguably already low 25% of total units to an absurdly low 10%. Effectively, and with little effort, a developer can expect to control an HOA as long as it wishes denying owners the right to elect all those that represent them.
Take 10 minutes and watch testimony (after opening the web page click on AB-192- skip forward to time 2:08:00) before our legislators on the bill.
In my opinion the bill is a slap in the face of democracy. As those in opposition noted during testimony, the bill was not needed. It was an action in search of a reason. In my opinion, it was just another in a series of efforts by the local developer community to grab additional control and the associated additional profits.
See what Olympia (the developer of SH) representatives said in support of the bill- including Angel Rock, the President of our HOA’s management company (also a developer owned company). It makes me upset every time I watch it. I postulate it will have the same effect on owners—when they find out. (Watch for yourself. Select AB 192 and go to time 2:13:33).
It should be noted not a single owner in SH took the time to speak in opposition. I suspect no one knew. Despite personally watching for HOA legislative initiatives, I did not find out about the legislation until just prior to its passing.
It should also be noted, the SHCA board in 2015 paid $60K/yr for a lobbyist to defend the community's legislative interest. While I have long questioned the value to owners of this expenditure, I ask why the Board did no make owners aware of this effort? I find it interestingly the lobbyist engaged by SHCA is shown testifying, following our Olympia staff, in support of AB 192
The statutory language of AB 192(2015) “Regardless of the period provided in the declaration, a period of declarant’s control terminates no later than the earliest of..”. I and legal experts I have consulted believe the language was intended to assure that control passed to the owners at some point in time whether the governing documents so provide or not. Where less than the 90% threshold is provided, the CC&Rs continue to apply (except where they are inconsistent with law). SHCA CC&Rs address control change and they direct change no later than 75%- which is less than the 90% established in AB 192.
If a developer has not recouped its money by the time 75% of the units were conveyed, it should not be permitted to pass this bad planning or its bad decisions onto the homeowners by restricting their fundamental rights. It is my opinion SHDC highlights its arrogance and greed by seeking to place its ability to make money over the fundamental rights of the homeowners. Click here for 2025 legislation under consideration affecting HOA owners.
See more of my legislative change proposals to improve Nevada's HOA laws can be found here.