Enforcing Governing Documents
Homeowners associations and homeowners often must resolve disputes regarding the CC&R’s, Bylaws or Rules and Regulations. It is important for an association to enforce the provisions of its governing documents. Otherwise, the association may lose the right to enforce certain provisions of its governing documents. While most disputes can be quickly resolved, there are some homeowners who refuse to abide by the association’s rules. In those cases, the association can try to compel the homeowner to comply by fining the homeowner or liening his or her property. Some homeowners, however, ignore the fines and continue to violate the rules.
When a homeowner refuses to comply with the Association’s CC&R’s, Bylaws or Rules and Regulations, the Association can file a claim with the Nevada Real Estate Division. We have successfully resolved dozens of claims through the Real Estate Division on behalf of homeowners associations.
Chapter 38 of the Nevada Revised Statutes sets forth the types of claims that may be filed with the Real Estate Division. In short, any claim involving the enforcement, application or interpretation of an association’s governing documents must be filed with the Real Estate Division. In fact, these types of claims cannot be filed in State Court. If such a claim is filed in State court, the court will dismiss the claim based on lack of subject matter jurisdiction.
The Real Estate Division handles a wide range of claims. An association may file a claim with the Real Estate requesting a homeowner be ordered to remove a commercial vehicle from his driveway, seeking a judgment against a homeowner for unpaid fines or assessments, requesting a homeowner be ordered to remove an improvement that was not authorized by the Board or the Architectural Review Committee, requesting a homeowner be ordered to properly landscape his yard, or requesting a homeowner be ordered to comply with any other provision of the governing documents.
When a claim is filed with the Real Estate Division, an arbitrator is appointed to conduct a hearing. The arbitration is conducted similar to a proceeding in State court. Each party is allowed to conduct discovery. Each party files an Arbitration Brief that states the facts of the case and cites court cases and statutory law that supports their respective positions. At the arbitration, each party presents documentary evidence and testimony by witnesses. Just as in a State Court proceeding, each party is given an opportunity to cross-examine witnesses called by the opposing party.
After the hearing, the Arbitrator renders a written opinion. Either party may appeal the Arbitrator’s decision to the district court within 30 days of the date the opinion is issued. Our experience is that most homeowners do not appeal the Arbitrator’s order. After 30 days, the Arbitrator’s order may be enforced in the same manner as any State court order.
A claim filed with the Nevada Real Estate division can normally be resolved within 90 to 120 days, although there are some cases that take longer. In addition, Nevada Revised States Chapter 116 provides that an association may recover attorneys’ fees when it is forced to take legal action to enforce its governing documents. Also, many association’s governing documents provide that the prevailing party in a legal action is entitled to recover its attorneys’ fees from the losing party.
While it is unfortunate that not all disputes with homeowners can be amicably resolved, the mandated arbitration program through the real estate division is quick, efficient method to resolve disputes and to compel a recalcitrant homeowner to comply with the association’s governing documents.