SOA Board Control – Time for Turnover

As most know, the Somersett Owners Association (SOA) Board of Directors is still controlled by the Somersett Development Company (SDC) with Blake Smith being both President of SDC and the SOA Board of Directors.  It is Somersett United’s (SU) contention that the SDC has exhausted its right to control the SOA and appoint members to its Board of Directors.  Under Nevada State Law, the period of developer control ends 60 days after 75% of the number of units that may be created have been conveyed to owners other than the developer.  SU believes that this “trigger” has been reached. Read more

14 thoughts on “SOA Board Control – Time for Turnover

  1. It is my understanding that the Somerset HOA is the largest in Northern Nevada and that the original developer is no longer building any additional units. Therefore, why not turnover to the homeowners? What is in it for the developer to maintain control?

    1. I really do not mean to be sarcastic or show any disrespect but.

      You really answered your own question. The BUILDER MAINTAINS CONTROL.

      If the homeowners have control then the Builder has no control.

      Now he has a bail out.

      I am kind of ignorant, what do I not see?

      1. Bob, – You are right, I did answer my own question, which was a rhetorical one meant to solicit a response from anyone who believes the Developer should maintain control of the SOA Board, which I do not. I see no defense for the Developer maintaining control. Anyone out there think otherwise?

  2. Homeowners associations are legally recognized as the smallest form of government in the US. Their By Laws (and subsequent CCR’s) may vary slightly from state to state but once enacted by the individual state, are laws not easily tampered with. They all have been time and stress tested. I support freedom of speech to discuss the issue of voluntary turnover but I urge restraint to fellow homeowners if forced turnover becomes an issue. That path is hugely expensive and has little chance of success, I have been down that road. An HOA the size of Somersette would entail years of legal wrangling and hundreds of thousands if not millions of dollars spent in attorney’s fees if forced turnover is pursued and subsequently opposed by declarant/developer. Again, I ask fellow homeowners to be very cautious if the path leads in this direction. Thanks

    1. Not sure that anyone wants to spent a huge sum of money to force SDC (Blake Smith) to relinquish control of the SOA Board. Give Blake credit, he has built a remarkable community, but SDC is not developing any additional units and I doubt they will be developing any in the foreseeable future, given their financial status and that apparently they do not now own any land within the authorized development envelope. Therefore, is it not time to turnover control to the homeowners? I do not see any reason for this not to happen, except for financial reasons beneficial to the SDC. Blake has implied he wants to accomplish some things before turnover, but I don’t know what these are, hopefully they are admirable.

      1. In the Reno Gazette-Journal on March 11, 2011 Blake Smith is quoted as saying “the turnover will be concluded within a year”.

        Dates for the turnover, the election of 5 homeowner representative board members should be announced now the board. Perhaps someone can explain why he has not done this?

  3. The Declarant/Developer/G. Blake Smith evades owner inquiries about turnover when presiding as president at board meetings by rightfully claiming that Article I, Section 2(w) states “Declarant reserves the right to create a maximum of five thousand (5,000) Units within the Subdivision” and that he is going to pursue that right. Yet he publicly stated to the Reno Gazette-Journal newspaper (March 11, 2012) that “The turnover will be concluded within a year.’’

    The Reno City Council has only approved 3,062 Units. Obviously, the Developer, or other builders, cannot create 1,938 Units in the next 12 months. In addition, Washoe County Assessor records reveal he does not own enough land on which 1,938 Units can physically be put. This whole smoky scene is overshadowed by the current top-to-bottom developer to builder to home-buyer financial situations in the Reno real estate world.

    The Developer also said he is in the process of turning over the association to homeowners. What is that process Mr. Smith? NRS 116.31038 states that “within 30 days after units’ owners other than the declarant may elect a majority of the members of the executive board, the declarant shall deliver to the association all property of the units’ owners and of the association held by or controlled by the declarant (followed by a long list of things). The all-owner board hasn’t even been elected! What are you doing before the mandatory 30 day period has started?

    Owners do appreciate the community your great vision has brought about, but why are you hanging on? What don’t owners know about that they should? Pending lawsuits or settlements, especially regarding the falling rocks at the Somersett entryway or the irrigation leaks down the center divider on Somersett Parkway? Possible construction defects at The Club at Town Center? Audit revelations? Details of the Subsidy Agreement? Board quorums at committee meetings where a recent decision was made (not at a regular board meeting) to use $210,000 of association funds (surplus owner paid monthly assessments) for a bid to buy a parcel of land that you previously owned but is now bank owned? Just what is all the smoke hiding?

    1. “Whenever the people are well informed, they can be trusted with their own government” Thomas Jefferson

      Joe raises a great question – Why does Blake Smith want to hang on?

      He has achieved a lot developing Somersett from the 1990’s to 2007 (before the Great Recession) into a beautiful golfing centered community, whether you paid an extra $30K to 40K to become an equity member in the Country Club, paid over a $100,000 for a view lot as we did.

      Unfortunately the 2008 to 2011 Recession has cut our property value in half, no one will now (can afford?) pay for a view lot. – You can now buy an Equity Stake in SGC for $12K, and you don’t have to live in Somersett (there do not seem to very many takers)!

      The days of communities with Private Golf Courses/Country Clubs are essentially over. Somersett has to move into today’s world and become a community that is run for the future benefit of all the homeowners.

      The SOA auditors commented in 2010 that the master developer (declarant), Blake Smith does not own enough units in the PUD to stay as developer-in-control. Mr Smith has been quoted in the RGJ (see post above) as being ready to turn over the association.

      Maybe it has something to do with the following:

      1. Chapter 40 Claims -since Somersett Development Corp went out business in 2008, the issues with the Rock Walls and the improperly installed area irrigation system are currently in litigation/arbitration/negotiation. Surely this is the responsibility of the developer not SOA – our dues are being used to pay for the lawyers. Should they be?

      2. The paperwork trail concerning subsidies made by Somersett Development Corp LLC (dissolved corporation) to the HOA, is less than clear – even the accountants were unable to figure it out according the annual report. In addition we heard that the subsidy repayment to Somersett Development Corp LTD (managed by Smith Realty Finance, owned by Blake Smith), were reduced to provide a developer subsidy to the lease agreement with the SGC. Why can’t we have transparency?

      I am sure that given with all that went on with the Great Recession, that issues such as these can be worked out.

      Please give the homeowners the information, keep them informed developer initiated plans/proposals and explain why this represents value and a wise spending of our dues money.

  4. Hang on = Follow the Money

    Hang on = Until Statues of Limitations for Lawsuits Have Run Out

  5. It looks like there is a legal opinion regarding “Declarant Control” posted on the website that says the turnover trigger has not been reached. It also looks like a homeowner disagreed with the attorney’s opinion so the HOA paid for another opinion confirming the trigger has again not been reached. This leads me to wonder how many legal fee bills has the HOA had to pay to dispute false claims made by homeowners like the people in this group? There are actually quite a few documents on the website that discuss what is going on in our community. I’m very happy I didn’t just believe everything I read on your blog and hope other homeowners take the time to read this information before they decide which side to believe.

    In addition, I would like to know what your group’s plans are when the developer turns over control to the homeowners as it seems like your group wants to try and gain control of the board. I can’t say everything in Somersett is perfect but things have are pretty darn good. I see on other blogs and a member of your group made an offer to purchase the lot next to the fitness club after the Somersett board announced they would be purchasing it for $210,000 to build more amenities for the homeowners. It says your group bought the lot to open an age restricted swim club. Is this true? Isn’t there already an age restricted pool at Sierra Canyon? Does your group have something against children in this community? How does this support the “initiatives that we believe to be in the best interests of the majority of homeowners” that you have posted on your “about us” tab?

    I’m starting to wonder how the members of Somersett United really believe they are united with the residents of Somersett. I like the concept of having a blog to discuss the opinions of Somersett residents but if you were trying to persuade me to become a member of your group, I have to respectfully decline.

    1. Reply to HappyHomeowner.

      I too am a happy homeowner, and legal opinions are just that, an opinion. However, that is not the issue with me. It is, why does the Developer want to continue control of the SOA Board, given its financial status and the fact it does not own nor is developing any land within Somersett. I have asked this question before. What is the objection for turnover to a duly elected board of homeowners? It has to come sometime, does not the current status of the Developer warrant it now? If not why?

    2. I agree with Jim (as another happy homeowner), one lawyer’s opinion can be contradicted by the opinion of another. That’s why we have judges. We need to deal with facts that anyone can understand without the “help” of lawyers.

      The most important fact is that the Reno City Council has only approved 3,062 units for the Somersett Project. More units could be built. However, the Declarant (G. Blake Smith) must have enough land for them to be built on. Declarant doesn’t. The surrounding areas which are claimed to be annexable are not owned by the Declarant. Before additional units above the approved number can be built, the PUD has to be amended. This is a lengthy process, starting with a study by the Reno City Planning Department of all relevant details, then public hearings, then City Council review and approval/disapproval.

      Fact: The SOA 2010 audit report states: “As of December 31, 2010, the developer had sold all lots that they owned within the Association” (Reference: Financial Statements and Independent Auditor’s Report, Somersett Owners Association, December 31,2010 and 2009, Note H, page 12)

      Although the CC&R’s do say: “Declarant reserves the right to create a maximum of 5,000 Units within the Subdivision.” that is a “dream number” written down in the best of times and now it cannot be reached given the physical situation in Somersett and the financial situation in the world of real estate. Unlike you I am not happy that the SOA attorney has refused to answer the question posed by concerned homeowners and the SOA auditor – “Does the Declarant own more than 25% of the 3,062 or even the hypothetical 5,000 Units in Somersett?” Smith and his attorney need to prove it!

      I would love to tell everyone what an all-owner board will do. However, that can only be intelligently described at the time that takes place. Who knows what “developments “will take place between now and then? Certainly you do believe that the board will be all-owner at some point. Certainly you don’t believe that the Developer and the Owners necessarily have the same goals. We have to move to a time where all the current and future Somersett homeowners have a say in how the association monies are invested, and that there are coherent plans and community buy in on how we invest in community enhancements.

      Time for the homeowners to run Somersett!

  6. I have to agree on the SOA “legal opinion” on the 25% control issue. any attorney can shape an opinion to their clients benefit.

    I am not an attorney, but have read the NRS sections and researched the annexable properties (, and deal with Reno Planning on a daily basis. My opinion is that Blake / SOA don’t have a let to stand on, and should have ceded the control of the board to the “home owners” a couple years ago. It will take a legal challenge to the State Ombudsman to force action.

    My caution to the residents is to understand who are the “home owners” likely to vote in an election for resident SOA board members. It is tough for a HOA to get a 60% turnout of “real” residents for any election. Somersett will be faced with super-blocs of votes cast by the developers – Toll, Lewis, maybe even Pulte – who can put up their own resident proxy as a candidate.

    So though I feel Blake’s time controlling the board should have ended, he may be the best bet for the community, given the alternatives. Just give it some thought.

  7. The opportunity of having a property-owner voted 5 member board is one we must move forward to enact. The agenda of this type of board will work well for the community if we work to make it happen.

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