Moana Nursery & Subsidy Reimbursement Agreements

Somersett United
Somersett United

As a point of information, the Moana Litigation Settlement referred to in Mr. Gescheider’s memo (see previous post) was published earlier on this website and can be accessed via Moana Settlement Agreement

The monies received by the SOA under this agreement amounted to $375,000, which according to the BOD, made the association whole with regard to the contested $367,000 previously paid to the Somersett Development Company (SDC) by the SOA under the 2011 Subsidy Reimbursement Agreement. This agreement was approved by the SDC controlled BOD back in 2011 to reimburse monies spent by the SDC to correct common area construction defects. Much has been said about the validity of the Subsidy Reimbursement Agreement in previous blog articles and was the subject of an investigation by the Nevada Real Estate Division’s Ombudsman’s office.  According to SOA counsel, with the recovery of monies under the Moana Settlement Agreement, the subsidy reimbursement matter before the Ombudsman has been closed.

Obviously, recovery of $375,000 is a substantial benefit to the Association regardless if it came from Moana Nursery or the SDC.  In past articles, SU hotly contested the validity of the Subsidy Reimbursement Agreement and applauds the homeowner who pursued it before the Ombudsman’s office.  To the extent this complaint was settled at the expense of Moana Nursery in lieu of the SDC may or may not have been appropriate as discussed in Mr. Gescheider’s memo. However, the bottom line is that this issue now appears to be closed, the SOA has benefited and SDC has “dodged the bullet”.

3 thoughts on “Moana Nursery & Subsidy Reimbursement Agreements

  1. The suit that shouldn’t have been is the Moana matter. The Subsidy Agreement matter may be closed in the eyes of the Association and its counsel, but I suspect it will be re-opened.

    In the same manner that the Board keeps extending the ballot deadline for the proposed amendments to the CC&R’s when they don’t seem to get what they want, the deadline for the vote on whether to proceed or not with the suit against Moana was also extended, and more than once.

    Regretfully, I have since shredded my documentation, but as I recall the “final” deadline was September 24 (forget the year). The board met on the 25th and the first item on the agenda was to announce the ballot count. Well, the required number had not been met. So what did the board do? They extended the deadline until 1PM the following day.

    They did not notify owners of that extension. BUT some 90 plus developer ballots miraculously appeared to be counted at 1PM and bingo the necessary number of votes for approval had finally been made.

    How do I know this? I was one of the ballot counters and we weren’t sworn to secrecy as now is the case in other elections.

    I think owners are sick and tired of twisting ballot deadline extensions, legal as they may be. As they say in higher-level politics, let’s have and an up or down vote and move on to other matters.

    What enabled the Moana suit was that NRS 116.31088(e) – to paraphrase – allows for a 90 day voting period and at the time of the September 25 meeting there was still at least one day, if not a few more, to go, so why not extend again. As stated above the Board took advantage of that extension by not notifying owners of it. Who knows what the final final count would have been, but if made aware some owners would have voted who hadn’t.

    Fair? You be the judge. Let’s stop dodging bullets and be more open.

    1. Joe,

      I am not sure I understand your issue. If the Board had not extended the time for the lawsuit against Moana would the suit have been dropped? Would the SOA not have received the $375K that they did receive?

      I think that you and I could be on the same side. You seem to be upset because the Board keeps extending the time for voting on the CC&R amendment. I am upset with the owners who do not take the time to vote on this issue (pro or con) so the matter can be closed. Those who have voted are 2 to 1 in favor of approving the CC&R amendment. Do you really think it is fair that the people who don’t vote should be the deciding factor? Do you really think that the Board is extending the vote “when they don’t get what they want” or are they trying to be fair to the 2 to 1 majority who are for the amendment change?


      1. Mike,

        I too am disappointed that many unit owners have chosen not to submit their ballots, and it is indeed a normal process to extend voting deadlines when at least 51% of all unit owners are required to approve or disapprove a measure, as was and as is the case for the Moana Litigation and the CC&R amendment vote. However, I do have a problem with the counting and public disclosure of results prior to the voting deadline. The BOD stated they just wanted to see where they stood, Why? Would it have made a difference as to their subsequent actions? If so, they chose not to reveal it. One can only speculate as to their motive.

        In the case of the Moana Litigation (which I voted for) if it had not moved forward, the new BOD always had the option to sue the Developer (SDC) for return of the $367,000 paid to SDC under the contested Subsidy Reimbursement Agreement. However, this is now a moot point given the SOA was apparently made whole in this regard via the Moana settlement.

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