For years I have been attempting to get an answer to a seemingly simple question: Has the trigger point for Olympia to cede control of the SHCA to its homeowners passed? I have never received an answer to that question. The Nevada Real Estate Division (NRED), Nevada's sole HOA regulator, was my first stop. It turned a blind eye.

 

It is my opinion the SHCA board is not legitimate. The appointed directors comprising the majority should be elected by owners. The May 2021 Nevada Appeals Court Order in Kosor v NRED (pg 1) found : "Both Nevada common-interest ownership law and the master declaration required that the Declarant's [Southern Highlands Development Corporation] control over the SHCA [Southern Highlands Community Association] would terminate after conveying 75% of the units within the SHCA." Based on a Maximum Units allowed of 10,400, the Declarant's control over SHCA ended once 7,800 units were conveyed. SHCA's Annual Association Registration (Click here Form 562) filled in January 2022 notes 8,303. 

 

The non-elected SHCA board majority is using owner assessments, along with the considerable resources of Olympia, to defeat legal actions that would replace them with owner elected representatives Incredibly, SHCA owners are paying to defend the board’s denial of our right to vote on who governs us.  

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SHCA CC&Rs (Section 2.19, page 7) require the developer terminate its "control" of the community "no later than" 60 days after conveyance (to other than a declarant) 75% of the maximum units. The maximum units in the original SHCA CC&Rs is 9,000. The developer increased the maximum units in a 2005 amendment to 10,400. It did so despite Nevada law stating a "declarant (developer) may not in any event increase the number of units in the planned community beyond the number stated in the original declaration" (see NRS 116.2122, emphasis added). Nonetheless, Nevada courts have ruled the 2005 amendment stands. This is flawed and I explain my rational here.

 

SHCA acknowledges over 78% of the HOA's Maximum Units* are conveyed. In legal filings the association acknowledges SHCA’s CC&Rs "terminat(ing)e declarant control at 75% conveyance...". In May 2021 a Nevada Appeals Court ruling found "Both Nevada common-interest ownership law and the master declaration required that the Declarant's control over the SHCA would terminate after conveying 75% of the units within the SHCA" (see Kosor v NRED, pg 1). So why has the board not acted on declarant control termination?

 

The latest association position in not terminating control and providing for owner elections of all directors, rests in a flawed claim SHCA’s CC&Rs, following the enactment of AB 192(2015), violate NRS 116.31032. Thus, per NRS 116.1206 the Board asserts the CC&Rs are deemed to conform (i.e. changed). My position is SHCA's CC&Rs do not violate NRS and where not changed by legislation. The 75% threshold of SHCA CC&Rs remains controlling even after AB 192(2015).

 

​A plain reading of NRS 116.31032 as amended does not mandate declarant control terminate at 90%, as the association asserts. The statute reads "the declaration [CC&Rs] may provide for a period of declarant control of the association...". This was unchanged by AB 192. The statute sets out criteria establishing a ceiling ("no later than") for termination of the declarant's control "regardless" of what may be established in the CC&Rs.  This too was not changed by AB 192. AB 192 amended NRS 116.31032 changing only the NLT 75% conveyance threshold to NLT 90%- nothing more. AB 192 changes affect only associations who's CC&Rs did not provide for a threshold.

 

Furthermore, I believe the declarant's alleged increase in the original Maximum Units, from 9,000 to 10,400 in a 2005 Third Amendment to SHCA's CC&Rs, violated NRS. Here is SHDC's October 2017 letter responding to NRED's investigation. Find here my assessment of SHDC's flawed October 2017 response.

 

While I acknowledge the flawed ruling in Kosor v NRED bars my challenging the amendment increase in the maximum units, it does not make immune and void unlawful actions- or others from challenging said action.  As noted above, NRS 116.2122 provides "a declarant may not in any event increase the [Maximum Units]".  Per NRS and our CC&Rs Sec 25.5 the declarant's action "shall be automatically deemed modified ...to conform." The original 9,000 maximum units remains. Thus, even if 90% where the correct threshold (which I again argue it is not), the control termination threshold has been reached (8,300 conveyed units exceeding 90% of the original 9,000 Maximum Units)*. I currently seek Nevada courts determine who is right (a declaratory order). The declaration is being opposed by the association. (read more here)

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Click here to obtain a summary and more detail related to all litigation- my attempt at full disclosure. Readers can also contact me using the form at the bottom of the Home page.

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                                            as of  03/24/25

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* The original Maximum Units in the SHCA CC&Rs was 9,000. NRS bars a declarant from increasing the Maximum Units. Nonetheless, SHCA asserts the declarant's 2005 Third Amendment, increasing the Maximum Units to 10,400, was "permitted under section 23 of the CC&Rs." I disagree.