Updated reserve study used to prepare HOA budget

Q: To prepare our 2026 budget last September, the board requested a reserve study update. This was done because the board wanted to improve the reserve percent funded, which had fallen below 60 percent. Using the update, percent funded increased to 69 percent (but the update used questionable assumptions including a 4.1 percent reserve interest rate). The board approved the budget using the update and the HOA ratified it. But now the board refuses to provide the updated reserve study because they have not approved it during the past two quarterly meetings. My questions are first, doesn’t the updated reserve study have a de facto approval since it was used (with excepts included) for the budget? And second, should I be concerned that they refuse to release the updated reserve study?

A: A Nevada association is not explicitly required to mail the full detailed reserve study with the annual budget for approval. The association board must provide a summary of the reserve study that includes the current estimated replacement cost, estimated remaining life and estimated useful life of each major component of the common elements. (NRS 116.31151) (1b) (1).

If the updated reserve study was used in preparing the annual budget, the board should provide that information to the reader with the notation that the updated reserve study had not been formally approved at a board meeting. Since the updated reserve study was used for the approval of the annual budget, the board should approve that updated study at its next board meeting.

There is always a concern when a board does not release some record that is required by NRS 116.

Q: In a workshop, there was a discussion to start a communications committee. Nothing was decided, but when we got our board packets there was a communications committee to vote to approve and six applications from friends of four of the board members, which includes the board president, for said committee and a charter done without three of us knowing or having any input into any of it. No notice was sent out looking for volunteers to the rest of the community and, in spite of our objections, everything was voted on at one time in an open board meeting. Obviously confidentiality was breached when the applications were solicited before the committee was approved. We would like to know if we have a complaint to file. Also, are workshops now considered meetings and should be open to residents?

A: There is no state law requiring committee meetings to be open to the membership. The open meeting laws do not apply to associations. (There have been many proposed laws to make the open meeting laws apply but have failed to pass the Legislature).

Associations are to use committees for discussion. Proposed motions can be sent to the board based upon the findings from the committees. In the reader’s case, it appears that there should have been discussion and vote by the full board members to approve or reject the committee. If approved, the board should have then passed a motion for developing a charter and for opening up applications for membership on the communications committee.

The reader does have the option to file a complaint.

Barbara Holland, CPM, CMCA, AMS, is an author, educator and expert witness on real estate issues pertaining to management and brokerage. Questions may be sent to holland744o@gmail.com.