Trust your HOA Board?

The SHCA board has disenfranchised owners removing one of only two elected directors with no authority to do so.

• On April 21, 2022, SHCA's board, a mere four months into my two year term, engaged in retaliation sending me a cease-and-desist letter framing my lawful inquiries and records requests as breaches of my fiduciary duty.

  • ​SHCA has refused to release association records I, as a director, am entitled to inspect.

  • The SHCA board directed limits on my ability to fulfill my duties creating barriers exclusive to me on seeking information and records.

  • Out of a concern that a potential conflict of interest could arise and concerned the Board may be violating Nevada law, I requested that the board retain independent counsel, with no prior connection with SHCA, to advise on SHCA’s positions on and handling on several controversial issues. My request was refused.

• On May 16, 2023, SHCA issued, without any authority, following deliberations I was wrongly excluded, made a determination to remove me from the director position owners elected me to fill.

  • They did so in a secret hearing ignoring my request owners be told and witness as the law provides. ​

  • I communicated concerns relating to this unlawful "ouster" and due process violations with no avail.  

• The law is clear, only a recall by owners can remove a duly elected director. 

• Why?  I believe it is clear, the SHCA board seeks to silence me, bar me from engaging in protected activity, and preclude my duty as a director acting on behalf of owners to raise reasonable and necessary questions related to SHCA’s operations- to include the legitimacy of the board. 

• The Board's stated reason was centered on an unsupported allegation I stood to gain personal profit because I and another owner, in 2020, brought litigation, seeking only attorney fees, related to the failure of the board to hold required owner election(s) replacing the three appointed directors. 

• It would appear disagreeing with the Board is grounds to remove a director. How can we not think this is wrong?

• With no alternative, I have asked the courts get involved to resolve the above. (Read more here)

 

Why has the board not acted to end the declarant's (developer's) control of the association?

• Read what Olympia claimed, in a 2017 affidavit to a NRED investigator related to a suspect 2005 unilateral increase of the maximum units allowed in the SHCA CC&Rs prolonging its control of our board. Here is some important background information owners should consider related to the 2005 Third Amendment. 

• I asked our board to explain why developer control has not been terminated despite Clark County records showing 9,394 dwelling units permitted in Southern Highlands as of September 2019 and 9,564 dwelling units as of October 2020. This is far more units than is necessary to effect control change. If commercial units are counted the totals would be larger.

• A change in the law (effective October 2015 and spearheaded by Olympia) increased the control change ceiling to 90%. I believe our CC&Rs are unaffected by this change. Our CC&Rs provide for a lower 75% threshold. So why has the board not acted to terminate declarant control?

  1. SHCA CC&Rs show 75% as the declarant change threshold. Except where the CC&Rs are inconsistent with the law, which SHCA's CC&Rs are not, the CC&Rs are controlling. SHCA acknowledges exceeding the 75%.

  2. In a November 20, 2020 response SHCA asserted 8,183 units (76%) is the correct count.  While having many reasons to believe SHCA's count to be flawed, it nonetheless exceeds the 75% threshold. 

  3. The 2020 audited and Board approved financial statement notes "approximately 8,484 residential units" (81.5% of 10,400) in SHCA.

  4. During a summer 2023 owner comment period of the board meeting, counsel Adam Clarkson asserted 79% of units were conveyed.

• To be clear, as an owner, SHCA has at times responded to my inquires as noted above. But, responding and answering are different- the latter lacking here. Now, as your elected board representative, I will continue investigating and trying to get action/transparency on my concerns. But I continue to be denied access to the necessary association records.

• I find it truly unfortunate the association's board does not simply sit down with me and other owners and work through our differences. Owners deserve an explanation and full transparency.

• Some of the issues raised above are now before the courts. This is not how a community board should operate or spend owner money.

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Should the SHCA Board have renewed Olympia Management Services' (OMS) $1.8M/year plus contract to manage our community without soliciting bids?

• On multiple occasions, most recently in November 2022 and January 2023, the developer controlled SHCA board approved the renewal of the association's management contract with OMS, a company that is wholly owned by the Olympia Companies, our developer.

  • The board awarded this lucrative contract without seeking bids. This no-bid renewal was not an isolated occurrence.

  • The intent of Nevada's legislation was to mandate HOAs obtain bids when the cost of the project exceeded certain criteria (3% of total; budget). Not simply “if” bids were solicited as our board seems to be asserting. Review full committee testimony about AB 238 here.

• I wrote to the SHCA board seeking an explanation of what, in my opinion, may have been a violation of NRS 116.3103 and NAC 116.405.

  • NRS 116.3103(a) requires HOA boards exercise “ordinary and reasonable care…”. Is no-bid contracting in awarding a major contract and/or where the majority of board director are employed by the owner of the company, ordinary and reasonable?

  • NAC 116.405(8)(d) establishes "...when practicable, at least three bids from reputable service providers who possess the proper licensing before purchasing any such service for use by the association..." (also found in NRS 116A.630(2))

  • When asked during a SHCA board meeting, Board President Jaynes stated he saw "no reason" to solicit for bids.

    • OMS’s owner, Mr. Goett, publicly endorsed Mr. Jaynes in last year's board election and employs a number of other board members. A factor?

• The OMS contract remains in place.  Despite bid soliciting having been "practical" as defined by the Nevada Real Estate Division's (NRED) own Opinion 11-02, it has refused to act OR INVESTIGATE my complaint.

  • This is a trend you will see repeated in many of the issues below.

• NRED asserted bids are required only "if" a board decides to use bids. This makes no sense and does not follow its own Opinion. Nor does it comport with the intent of the statute and other communications from NRED on this issue.

  • You can review the detailed email I sent to the Dir. of Investigations at NRED explaining my position.

  • I believe HOA boards should regularly seek bids before awarding important, large contracts or renewing the same. I believe the duty to seek bids is heightened in circumstances where any relationship, including those between the board, the contractor, or the developer may create or have the appearance of a conflict of interest.​

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Did the SHCA board comply with Nevada law in its mailing of election ballots?

• In a formal complaint to NRED, I asked for an investigation of the SHCA Board. Had it violated certain laws related to the requirements for mailing ballots to unit owners? Read the following information then decide whether you believe NRED's response to my complaint was appropriate or forthcoming?  

  • As part of the 2018 association election, SHCA board mailed out over 10,000 secret ballots.

  • At the time there were about 8,000 unit owners. It is my understanding not only were multiple duplicate ballots distributed, having observed the ballot count, a number of owners cast duplicate ballots. 

• Despite the undisputed nature of my complaint, NRED found it “unsubstantiated.”

  • NRED took no action stating “…NRS 116.31035 does not address mailing more than one ballot to a unit owner.”

  • Nonetheless, and only a few months later, but notably only after disposing with my complaint, the Division issued Advisory Opinion 20/02.

    • The Opinion makes clear NRS "mandates that an association follow the procedure.. only one secret ballot per unit owner can be distributed."

    • Under the Advisory Opinion it is my belief that the board’s decision to allow more than one secret ballot to be mailed out per unit owner should have been a violation of Nevada law. Based on the information provided to me, it appears NRED turned a blind eye.  Why?

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Is it ​criminal, a conflict of interest, and/or inappropriate when a management company works to influence a board election where that board has a direct impact on its lucrative contract renewal? 

• Mr. Goett, the owner of SHCA's community manager (OMS) publicly endorsed Mr Jaynes in  a letter to owners during the 2020 election period. Mr Jaynes is now the board president. Mr Goett openly endorsed Angie Williams in the 2021.Inappropriate? Yes, in my assessment. While not likely a tort violation, at a minimum it creates a perception of failed fiduciary. Olympia should stay neutral in elections where one of its wholly owned companies is tasked to administer the community in turn overseen by the Board. It is certainly inappropriate to advance candidates committed to continuing its very lucrative contract as it sits pending board approval.  ​​​

• Conflict of interest? In Nevada, not necessarily in the case of an HOA, although I argue it should be. I am unware of any non-interference provision in OMS' contract creating grounds for a breach of that contract- but again there should be. 
• Criminal? No. I can find nothing in my research to indicate it is. People have freedom of expression – and as the Supreme Court established in their Citizens United ruling, people don’t cede those rights when they choose to organize themselves as corporations or associations. 
• Read more here and here 

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Was it appropriate for the Olympia controlled SHCA board to agree to pay Olympia Company $475K for a landscape parcel Olympia received a few months earlier from Clark County for $1?

• The parcel in question was sold and conveyed to Beazer Homes by Olympia in 2003 (as part of a larger property sale).​
• Beazer would later convey the parcel to Clark County to serve as a light pole storage yard. 
• The parcel would be determined excess (under a NRS 244.290 process) by Clark County and sold to Olympia for $1.
• I questioned the appropriateness and timing of this transfer. NRS 244 provides an excess lot, like the one in question, should be returned to the conveying owner (Beazer not Olympia).
• A County official on review, claimed it was appropriate.
• The SHCA board voted to buy the 1.27 acer parcel from Olympia a few months later for $475K.
  • SHCA is using the parcel, after making expensive capital improvements, to facilitate the storage of Par 3 landscape equipment - reportedly to forego a Par 3 landscape contract rate increase if storage was not provided. 
  • Par 3 had for years stored its equipment on a lot owned by Olympia. 
• Were owners given appropriate transparency?​ I question the value of the lot provided, the capital improvements owners paid, and the County's claims the transfer was "appropriate". 

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Was it appropriate for Olympia, as the owner of our community management company, to initiate a defamation action against one of its client's owners?

Less than two weeks after I filed an application to run for the one owner elected community board seat on the ballot, Olympia Companies, who wholly owns our community management company (OMS), along with its owner filed a defamation lawsuit against me.

• As part of my campaign platform, I committed to (among other things):

  • ending the developer's two-decade control of our HOA.

  • reversing what the majority appointed board had permitted- no bid contract renewals with OMS,

  • SHCA's ownership of "public" parks I believed unnecessarily committed homeowners to over a million dollars a year while exposing owners to increased liability, and 

  • raising other questions like those in this list.

• Most of the statements alleged slanderous were made on this campaign website and in my campaign materials which the laws of this country afford the strongest of protections. Nonetheless, Olympia brought an action to silence me. Our board delayed the election.

• I believe actions taken were intended to send a message to those that supported me and others that may wish to join in my opposition efforts.

After more than three and a half years of litigation none of the claims survived. Case Review here. The Court’s 25-page order notes in part:

• Most of my comments, alleged slanderous, were directed at the SHCA Board - not Olympia. The court agreed writing: "The Court questions whether a reader or listener of (Kosor's) communications, which do not specifically identify (Olympia) as those committing certain actions, would clearly recognize the statements concern (Olympia's) conduct. With that said, the Court accepts (Olympia's) position for the purposes of deciding this motion..."

• The court also wrote "...statements (Olympia) challenged are largely opinions premised on true facts and not actionable." (underline added)

• Plaintiff's (Garry Goett and Olympia) were ordered to pay all legal fees and the maximum statutory award (albeit a nominal amount given the four years of hell the action created for me and my family). The Court "finds and concludes that the record reflects more than sufficient grounds upon which to justify awarding Defendant Kosor the maximum statutory damages against the Plaintiffs permitted by NRS 41.670(1)(b). The Court finds this case to be a quintessential SLAPP action."

Owners should not fear getting SLAPP-ed and endure the horrors that can follow, for taking positions in opposition to their community's management, when campaigning for a board position, and/or when generally raising issues of community concern. I do not want Olympia's actions chilling the free speech of an entire community. 

• Why did the SHCA board permit this action by our management company's parent organization and owner?​

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Should the SHCA board have acted prior to October 2015 to terminate the developer's control of the association and provide for owner elections of all board members?

• For years I repeatedly asked the SHCA board explain why it had not acted to terminate declarant (developer) control based on 2015 budget total unit counts. I believe an election of the three appointed directors is mandated and long overdue. 

• NRED once again refused to investigate the issue. Read NRED's double talk and AG opinion. I see it as just an excuse.

  • I sent a letter to the AG's attorney who authored the opinion addressing issues and oversights. I received no response.

  • NRED argued my complaint was not timely- it was more than a year old. In court filings a few years later, the Division asserted I knew or should have known of the alleged violations in 2015 when the budget was mailed to owners.

  • I argued the budget alone lacks sufficient information to make a finding. Nonetheless, if the 2105 budget did indicate a violation as NRED asserted, a fact accepted by the courts, why was no action taking by the division for an ongoing violation? I simply sought then and continue today to obtain the transparency owners deserve. 

  • According to Monique Williams, at the Department of Business and Industry, the parent agency of NRED, “NRED does not monitor threshold percentages. Pursuant to NRS 116.625, we educate the public (about what the law says and work complaints filed timely). (We, NRED) do not preemptively seek out associations who may be reaching the threshold for transition.” “The expectation is that these elected unit owners, who do not represent the declarant, keep track of transition dates and requirements. This would coincide with their fiduciary duty to the community.”

• Despite NRED's role as the sole regulator tasked to investigate alleged violation of HOA laws the division did nothing. Instead it elected to fight me in court to continue what I suspect is its intentional and politically motivated inaction. 

• NRED is a division within the Nevada Business and Industry, were the developer community exerts extreme influence. Was this a factor? 

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The SHCA board sat silent when in 2015, Clark County inexplicably "restructured" the Southern Highlands Development Agreement (SHDA). Changes made significantly reduced the Sport Park's infrastructure. The developer benefited despite its history in failing to perform. 

• Olympia was initially required to deliver the Sports Park in 2008 as part of the Southern Highlands Development Agreement (SHDA). See what the Sports Park looked like as originally approved and promised.

• The Sports Park was finished and accepted by Clark County in 2018. It was ten years late and a far cry from the one in 2005, Olympia committed to construct. How did this happen? This is what we do know:

  • In 2012 Olympia was facing serious financial issues and the Sports Park promised by 2008, was as yet an empty promise.

  • In 2015 a "restructured" SHDA greatly reduced the Sports Park infrastructure previously promised owners by the developer and Clark County, saving the developer millions.

    • We lost a 4-plex lighted baseball complex with covered stands and concession,

    • We lost the additional practice baseball fields and two additional basketball courts, all to have been lighted.

    • We lost a second, south side entrance to the park via Stonewater Dr with its associated additional parking.

    • Plus more.

  • In exchange, I can find absolutely nothing the community or County received of significance in return. 

• My research indicates the SHCA board did little to nothing to represent community interests. Nor did it adequately inform owners of the County action(s). Was the board's close relationship with Olympia a factor?

• Appropriate? Was the above "restructuring" in the best interest of SH owners or just Olympia? 

• More in my notes on the Sporks Park issue.

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Should the SHCA board have acted meaningfully to accelerate the nearly ten year delay (timeline here) owners experienced in getting the community's “Sports Park”? What is next?

• As noted above, Olympia was initially required to deliver the Sports Park in 2008.

• The Review Journal reported in 2007, "The park scheduled to open next year will feature walking trails, four lighted baseball fields, two practice fields, four lighted soccer fields, shaded spectator areas, and two lighted picnic and playgrounds."

  • This never happened. Was Olympia's financial health and potential inability to meet its original obligations, why our board sat silent? (Read here , here, and here)

  • Did the Olympia employment relationship by a majority of SHCA directors, albeit not a violation of the law, impact its decisions?

  • The County once directed a stoppage of building permits for the developer's delays in delivery (watch the Commission meeting- agenda 31 & 32 @ 50:01).

  • County Commissioners addressed delays on multiple occasions. But delivery delays persisted. 

• SHCA Board action, if only to publicly represent the community's outrage and failures, before the 2008 recession and after,  I believe could have made a huge difference. But our board failed to act on homeowner behalf. It failed to even adequately inform owners of the relevant issues. Once again, did the close relationship of the board to Olympia play a factor?

• Where is the transparency owners are due? Is our board missing discussions of underfunded public infrastructure in the SW Valley, arguably attributable to developers failing to pay their fair share, another failure to engage? 

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Should the SHCA board have opposed/refused to accept the conveyance of “public” parks that now cost owners over $1M/year and saddling them with a huge potential liability?  

• Under an agreement between Olympia and Clark County (notably, SHCA is not a party) parks constructed by Olympia were to be transferred to the County for public use and operations. 

  • This assessment is based on my reading of the original DA language (section 6.02). The section states “Prior to any dedication to the County, Owners (Olympia) may transfer the parks to (the) HOA.”

    • I suggest this provision was intended to facilitate the operation and maintenance of the parks by HOA owners as they were completed and Olympia accumulated the 18 acer minimum needed to transfer them to Clark County. What else explains the language "Prior to any dedication to the County"?

    • I also believe the Board lacked the authority to subject the parks to a security interest under NRS 116.3112 without a majority vote of owners. 

  • During the summer of 2005, Olympia attempted and failed to transfer four “public” parks to Clark County as the SHDA provides. Olympia's 2005 action demonstrated its clear intent to transfer the parks to the County.  But this is not what our board is telling you. (Note- Olympia also takes umbrage with my assertion)

  • Any transfer required the association acknowledge all park operations obligations. As I noted above, I believe it lacks the authority.

  • State tax funds (RCT credits) were authorized for Olympia in return for constructing the parks. Using RCT requires the parks constructed comply with terms of the DA. I have been unable to find any evidence they did when the transfer was first attempted. Was the County's release of Olympia's credit obligations appropriate? Were the terms of the DA met when credits issued were released and/or the DA amended? A November 2011 audit of the SHDA finds (see page 5) "RCT applied inconsistently". 

  • By 2008, Olympia would complete conveyance of the parks to SHCA.

    • Clark County and Olympia assert the original DA was “superseded by the Second Amendment to the Development Agreement" executed in November 2005. How did this happen?

    • Why did Olympia and/or Clark County officials change the initial agreement language on the transfer of the parks? Was it appropriate?

• I wrote to the board arguing against executing an Acknowledgment Agreement on the board agenda for approval over 10 years after the first park was conveyed to SHCA. The board never responded. 

  • The required park transfer provisions of the SHDA were not executed. The transfer failed to comply with terms in both the SHCA CC&Rs and SHDA.

    • Mr. Rexuis stated in a recent board meeting Q&A session, the parks as constructed, would not meet County acceptance standards and require extensive fixes.

    • Title transfer acceptance of the park properties by SHCA, was performed by Rick Rexuis, SHCA Board President and an employee of the Developer. However, no evidence can be found the SHCA board authorized his actions nor can I find documentation of the required vote/agreement of owners.  

  • Olympia and Clark County misrepresented approved public access easements had been executed in a 2015 Third Amendment to the SHDA. 

• Owners now pay over $1M/year to maintain and operate “public” parks.

• Owners have assumed the liabilities of operating parks accessible to the public. Read the owner horror story resulting from a North Las Vegas HOA's operation of a simple playground owned by the community.​​

• All of the above raises serious questions. Where is the transparency owners are due? Is this what SHCA owners want?

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Should the SHCA board have act to oppose a 2014 legislative effort led by Olympia to increase the developer control change threshold from 75% to 90%?  If nothing else, should SHCA owners have been informed?

• Olympia lobbied to change Nevada law during the 2014-15 legislative session passing AB 192-2015. The law inexplicably extended developer control of HOAs.

• SHCA owners were not told of this legislative effort by our developer (who owns OMS, our community manager).  Angel Rock, President of OMS played a key role lobbying for the change. Watch her lobby effort and statements made about the qualifications of board members to lead an HOA. Were any fiduciary and/or ethical duties violated?

• Meanwhile, our board never acted to inform or otherwise act to protect owner interests under the proposed legislation, despite paying $60K/yr for a legislative lobbyist to represent SHCA interests. Why not?

• Where is the transparency owners are due? Was conflict of interests a factor in the board's inaction?  

 

Why wasn't developer control terminated in 2005 and an election of all board members completed? 

• SHCA’s original CC&Rs establish 9,000 as the maximum units. Our CC&RSs read the developer’s control of our community terminates upon reaching 6,750 (75%) units annexed not in control of the declarant”.

• County records indicate 6,787 residential units were permitted in Southern Highlands by EOY 2004 and 7,102 by EOY 2005.

• The 2005 SHCA budget (executed in Sept 2004) indicates approx. 7,075 units in the association. (An estimate derived from taking “owner/builder assessments”/monthly unit assessment/12).

• Both unit counts (Clark County and SHCA budget) exceed the control threshold. But change was not affected.

• In November 2005, Olympia and Clark County would agree to a Second Amendment to the Southern Highlands Development Agreement (SHDA) increasing the size of Southern Highlands. 

  • Was this a factor in the developer controlled board's inaction extending Olympia's control period of SHCA, extending associated "rights" granted the developer, impacting park transfers, and avoiding a number of developer actions required on control termination such as an accounting of funds, etc.?

  • Where is the transparency?

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Why did the SHCA board not act in 2005 when Olympia unilaterally recorded the Third Amendment to SHCA CC&Rs increasing the maximum units from the original 9,000 to 10,400?  

• As I noted above, SHCA’s original CC&Rs establish 9,000 as the maximum units. I can think of no good reason owners have in extending the developer's control of an association, when in dong so limits owner ability to elect its governing board. Nonetheless, Olympia's control of SHCA was extended by actions (and/or inactions) taken in 2005.

  • An examination of SHCA's Third Amendment and it associated timeline of actions related to the execution and recording the amendment indicates to me it was a unilateral effort by the developer never approved by owners.

  • In 2005, all three SHCA board members were appointed and employed by Olympia.

  • The amendment increased the maximum units effectively extending the period of Olympia's control of the SHCA board.

• Why wasn’t the offending provision of the amendment, in clear violation of the law (NRS 116.2122), challenged by the SHCA Board and/or Angel Rock, an attorney in private practice, after they were informed of the recorded amendment? (Note- Angel Rock would in 2006 become President of OMS)?

• Given the lack of transparency and left with no option, when once again NRED refusal to investigate my concerns and provide the needed transparency, I sought court intervention.

• I argued the amendment’s provision, if not "adopted" by SHCA, violated NRS 116.2117(2) and was void on its face.

• To my knowledge, no evidence of the amendment’s adoption has ever been provided to dispute my claim. Besides and as I previously noted, why would owners ever approve doing so?

• NRED argued and Nevada courts would agree, a one-year statute of limitation (NRS 116. 2117) precludes any challenges to the 2005 amendment.​​ My action was dismissed and the maximum unit increase stands.

• Who is accountable- and what really happened? It is my opinion the interest of owners then and currently have been damaged.

• In an October 2017 letter to a Nevada Real Estate's investigator, I only discovered in mid-2022, SHDC asserts its 2005 amendment effort was a scrivener’s error (correcting a clerical mistake). Olympia claimed it was permitted to increase the maximum units and retain control of SHCA’s governance. I do not find the scrivener error claim credible. The amendment changed an important term of the declaration—the maximum units—more than five years after it was established, after approximately 7,000 units had been annexed, nearly simultaneously with Olympia obtaining a major change to its development agreement with Clark County increasing the maximum units it could build in Southern Highlands, and followed six prior amendments and/or supplemental changes. And now Olympia claims it just found “mistake”? And NRED turns a blind eye?

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* To be clear, I believe Olympia has done a lot of good for the community. I am not claiming here or anywhere on this site that Olympia violated any laws. That is to be determined. It is the collective issues described above and the accompanying lack of transparency in many cases, that forms the foundation of my lost trust in our current SHCA board.

 

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