Homeowner Forum on Governing Documents

The Somersett Owners Association (SOA) Website has published a “Latest News” article entitled “Homeowners Forum – SOA Governing Documents”, wherein they pose the following three questions to homeowners:

  1. Do you think these documents should be updated?
  2. Are you satisfied with the documents as they now exist?
  3. If you desire a change, are you willing to participate in homeowners group meetings to arrive at a final suggested/recommended change to be put before the homeowners for a vote?

The SOA governing documents include 1) the PUD, 2) the CC&Rs, 3) the Bylaws, and 4) Articles of Incorporation. A previous post on this website entitled “SOA Governing Documents” (available under the October 2017 Archives) identified the following as possible reasons for updating these documents.

  • The original Master Developer (Somersett Development Company) is still defined as the “Declarant” in these documents with certain rights, responsibilities and governing powers. However, this Declarant no longer exists and therefore, the Declarant needs to be redefined as being “The Somersett Owners Association”. Any sections that specifically reference the Master Developer need to be eliminated or revised.
  • The current CC&Rs establish ownership and relationships between the SOA and the Somersett Country Club (SCC), which has changed because of the purchase of the SCC’s land and water rights by the SOA in 2015. The CC&Rs need to be updated to adequately define the current relationship.
  • The SOA’s legal relationship with other residential and non-residential Town Center property owners needs to be defined in the CC&Rs.
  • A review is needed to assure conformance with the current Nevada Revised Statutes (e.g., NRS 116) pertaining to Common Interest Communities.
  • Should include collaboration with the Sierra Canyon HOA to make necessary updates to the “Notice of Annexation and Supplemental Declaration of CC&Rs for Sierra Canyon”. Perhaps by working together to review and propose changes to these CC&Rs, some of the dissent between the two Associations can be alleviated.

Readers who have an interest in this subject pro or con are encouraged to log on to the SOA Website at www,somersett.net, access the “Homeowner Forum – SOA Governing Documents” article and provide your comments/answers to its questions. The SOA Board (although not via the most visible venue) is soliciting homeowner input on this matter.

May 23rd BOD Meeting Recap

Actions Accomplished at the May 23rd BOD Meeting

  1. Approved Joe Strout for membership on the Finance Committee.
  2. Approved David Alexander for membership on the Facilities Committee
  3. Approved Communications Committee concept for the periodic scheduling of Town Hall Meetings. First one to be West Park related. Date not yet established.
  4. Approved Community Standards Committee recommendation for holding a community wide garage sale on July 28th (Board had previously approved increasing the number of annual garage sales from 2 to 3).
  5. Accepted Proposal from Avilla Construction for repairs and modifications to the Somersett West Entrance Monument. This to include removal of the two wing walls, relocation of electrical services and the fabrication of two Somersett Leaf Logo signs to be installed on the Monument. Priced at $56.2K. Price partially offset by a $14K insurance settlement received from previous auto accident involving the Monument.
  6. Approved a reduction in sales price for the SOA owned lot at 2225 Pepperwood Ct. from $85,000 to $79,000. Anyone looking at this lot can see why it is a hard sale.
  7. Opened bids for repair and maintenance to drainage ways and structures at various locations within the community. Three bids were received at $39.8K, $95.7K and $107.4K. Board approved acceptance of the lower bid from Aspen Earthworks Inc.
  8. Approved proposed method for the splitting of the Canyon9 and Mogul Pump House electrical costs between the SOA and the SGCC. This due to Pump House water being shared by both entities. After analysis the proposed SOA/SGCC split was 48%/52% for the Canyon9 Pump House and 42%/58% for the Mogul Pump House. Given the acreage differences between the Canyon9 and SGCC golf courses, one would have expected a lower percentage on the part of the SOA.
  9. Approved acceptance of FirstService Residential price for the reproduction of SOA documents at 15 cents per copy, which represented a lower negotiated price. However, alternate vendors will be looked into.
  10. Accepted proposal from Starsound Audio Inc for upgrading TCTC public address system. Proposed price was $10,351.
  11. Approved revised Real Estate Sign Guidelines (e.g., for sale, open house, security systems, neighborhood watch, beware of dog, no soliciting, etc.). After some discussion the BOD president announced approval based on a 2 (yes), 1 (no) and 1 (abstain) vote count. See discussion below regarding validity of this approval.
  12. RFP’s have been issued for TCTC Pool Redesign effort. Bids expected for opening at the June 27th BOD Meeting.
  13. Tabled approval of proposed SOA Website Usage Terms and Conditions due to SOA Attorney concerns.  Approved $1500 in legal fees for review and comment.

Rockery Wall Law Suit

The Association Attorney was present at the meeting to address the “Alleged Violation of NRS 116.31088” complaint. The complaint being that the Board did not have the authority to move forward with the Rockery Wall Law Suit because they had not received a majority vote from all allocated homeowners. No written legal opinion was offered, only a discussion by the Attorney who defended the decision to proceed by stating the Board was acting in good faith given that the returned ballots were overwhelming in favor of ratifying the action. Further that the NRS 116.31088 statute was poorly written and if one considered the “four corners of the statute” different interpretations could evolve. He did not put forth any other statute as a basis for continuing the law suit.

There were those in attendance who voiced disagreement with his opinion. He respected this and advised that one could always seek redress via the courts or other means (e.g., thru the Nevada Real Estate Division’s Ombudsman). In response to a homeowner comment he took exception to any monetary benefit being a motive for his support of moving forward with the law suit. Also, that he did not consider non-returned ballots as representing a no vote. This appears to “fly in the face of” a statement from the Homeowner Information Meeting, wherein upon encouraging one to vote, that an abstention was essentially the same as a no vote. Also, notably missing from the Attorney’s defense of the decision to proceed, was any quotation from the statute where one could interpret ratification as being anything other than a majority vote of allocated homeowners. To quote the statute:

“To protect the health, safety and welfare of the members of the association. If a civil action is commenced pursuant to this paragraph without the required vote or agreement, the action must be ratified within 90 days after the commencement of the action by a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated. If the association, after making a good faith effort, cannot obtain the required vote or agreement to commence or ratify such a civil action, the association may thereafter seek to dismiss the action without prejudice for that reason only if a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated was obtained at the time the approval to commence or ratify the action was sought”.

Clearly the last sentence is a little confusing, but there is no reference to anything other than: “at least a majority of votes of the members of the association” as being a basis for ratification. Additionally, in a previous (2012) SOA civil action against Moana Nursery, the above quoted majority vote was required and obtained.

Real Estate Sign Guidelines Approval ??

As stated above, the revised guidelines were declared approved by the Board President based on a 2 yes, 1 no and 1 abstain vote. However, it is questionable that an approval can be obtained via a 2:1:1 vote split. This based on Article III Section 3.10 of the SOA Bylaws which states:

“Sixty-six percent (66%) of the directors in office constitutes a quorum of the Board for the transaction of business except to adjourn as provided in Section 3.13. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as an act of the Board”.

Four directors were present, which constitutes a quorum, and mathematically it would take three votes, not two, to constitute a majority. Since the  2 out of 4 does not represent a majority any action taken on this basis cannot therefore be considered as “an act of the Board”. Some may consider this as not being a “big deal” as regards the issue voted on, but the Board President is setting a dangerous precedent as regards future approvals for more costly or meaningful issues. This apparent violation of the Bylaws needs resolution before repeating.

Rockery Wall Litigation Update.

The following summarizes actions associated with the SOA Rockery Wall Law Suit taken after the Homeowner vote to either ratify or not ratify the undertaking of such action.

Washoe County District Court Case CV17-02427 Docket Entries filed by SOA Attorney

On May 3rd 2018 – Filed the “First Amended Complaint for Damages (Corrected)” document. This 19 page document amends the original Chapter 40 Complaint for Damages filed against the Somersett Development Company et. al. The Amendment incorporates the following:

  1. A change in the identification of defendants to : 1) Somersett Development Company LTD, 2) Somersett LLC (a dissolved company), 3) Somersett Development Corporation (a dissolved company), 4) Q&D Construction, 5) Parsons Bros Rockeries Inc, and 6) Parsons Rocks.
  2. Addition of two articles to Section IV “Second Claim for Relief” of the Complaint, which invoke the provisions of NRS 116.4113 “Express Warranties of Quality” and NRS 116.4114 “Implied Warranties of Quality”.  Comment – It is not clear why the addition of references to these two NRS 116 provisions, except perhaps to argue they override the six-year statute of limitations.

Except for the change in identified defendants and the two additions to Section IV of the Complaint mentioned above, all other claims remain in effect and unchanged from the original. A complete copy of the Amended Complaint may be accessed via the following link: First Amended Complaint For Damages (Corrected)

On April 26th and May 8th – Filed a “Stipulation and Order to Dismiss Without Prejudice” the complaints against Parsons Bros Rockeries California Inc and Parsons Rocks LLC. This leaves Parsons Brothers Inc as the sole Parsons Brothers affiliate company as a defendant.

SOA Board Actions

  1. Effective April 14th 2018 the Board issued a “Unanimous Written Consent Document”, which approved moving forward with the Rockery Wall Law Suit. This irrespective of the fact that a majority of Somersett Homeowners did not vote to ratify such action. See previous post of May 4th entitled Rockery Wall Law Suit- Authority to Proceed? for a discussion on this issue.
  2. On May 17th2018 via a SOA litigation update letter, the SOA Attorney revealed that a June 22nd 2018 Mediation Meeting will take place. Letter did not specify who will be represented.
  3. Added an “Alleged Violation of NRS 116.31088” agenda item for the May 23rd BOD Meeting. This in response to an Association Member letter questioning the Boards authority to proceed with the law suit based on Homeowner vote results. A copy of which may be accessed via the following link: Alleged Violation of NRS 116.31088


Somersett Golf & Country Club (SGCC) 2017 Financials

The following table represents a summary of the Somersett Golf & Country Club’s (SGCC) revenue and expense data for the years 2010 through 2017 (i.e., years since turnover from the Somersett Developer to SGCC Equity Members). Given the Somersett Owners Association’s (SOA) ongoing investment and liabilities pursuant the to Real Property Purchase Agreement (as entered into between the SGCC and the SOA in late 2014), SGCC’s financial status should be of interest to Association members. Note that the SGCC’s operating loss for 2017 was $73,008.

• Full proprietary membership with voting rights, does not include non-permanent provisional or preview memberships

Table Notes:

  1. 2010 – Year in which the Somersett Development Company accomplished early turnover of the SGCC to its Equity Members via Member vote.
  2. 2011 – First year in which the SGCC was run entirely by Equity Members.
  3. In late 2011, the Developer controlled SOA Board voted to divert $15/month of homeowner assessments to the SGCC via a “Lease Agreement” in exchange for some SGCC access amenities. Agreement was to run for three years starting in January 2012 with optional 3 and 4-year renewal periods. Purpose being to offset SGCC operating losses.
  4. SOA Revenue column represents the approximate revenue the SGCC derived in 2012, 2013 and 2014 from the SOA under the Lease Agreement described in Note 3 above. 2014 was the last year under this agreement after being declared improper by the Nevada Real Estate Board.
  5. In late 2014, a SGCC Real Property Purchase Agreement was approved by SOA owner majority vote. Under this agreement, the SOA purchased the SGCC land and water rights for $2,750,000 with a subsequent leaseback of to the SGCC at a base rate of $1000/year (subject to escalation) plus a fixed rent amount of $1200/year. Lease term is for 50 years with two SGCC optional 20-year renewal periods. SOA purchase funds were obtained via a bank loan being paid for by SOA homeowner assessments.
  6. The SGCC’s  2015 negative revenue less expense amount was primarily due to the $2,750.000 sale price income (see Note 5) minus a reported sales expense (asset loss) of $4,294,781.
  7. 2016, 2017 – Years without any SOA revenue contribution

All Table data was derived from the SGCC’s IRS Form 990 submittals, which are open for public inspection.  For those interested, the SGCC 2017 financial details associated with revenues, expenses, assets and liabilities (i.e., Form 990 Parts I, II, VIII, !X and X) may be accessed via the following link:

SGCC 2017 Form 990 Financial Summaries

2018 Revenue and Liability Concerns:

  1. The SGCC’s approximately $300K in revenue derived from the SOA via the Canyon9 maintenance contract will not be in effect for 2018. The contract for 2018 and 2019 was awarded to Reno Green based on an annual quoted price differential of $47K. How this will affect the SGCC’s 2018 financials remains to be seen.
  2. Also unknown is SGCC’s financial liability for the Rockery Wall failures on SGCC leased property. For expeditious reasons these repair costs are currently being paid for by the SOA. However, per the 2014 Real Property Purchase Agreement, the SGCC is liable for these repairs under the Agreement’s Warranty and Property Maintenance Provisions (see related post in the April 2018 Archives entitled “SGCC Rockery Wall Repair Obligation”). In this regard, it is anticipated that the SOA will seek financial reimbursement from the SGCC (approximately $14K in SOA legal fees has already been expended on this dispute). Although not publicly revealed, the SGCC’s share of repair costs has been estimated in the $500K range. How the SOA’s Chapter 40 law suit against the Developer will affect this issue has yet to be determined or revealed. If the SGCC is indeed liable for repair costs, the question is how will the SGCC secure the funds. Perhaps another dip in the SOA money well via some other agreement? Hopefully not, SGCC Equity Member assessments would be more palatable.

May 23rd SOA BOD Meeting Agenda

The Somersett Owners Association (SOA) Board of Directors (BOD) open meeting is scheduled for Wednesday, May 23rd at 5:30 PM at The Club at Town Center (TCTC) Sports Court. The Meeting Agenda may be accessed by clicking on the following link or on the Association website www.somersett.net under the SOA/Committees and Meetings tab.

May 23rd BOD Meeting Agenda

The BOD Meeting Packet to support the May 23rd Agenda has not yet been  released by the SOA. When released it will be made available on the Association website under the same tab referenced above for Agenda access. Upon it’s release, additional information and/or comments related to the Agenda items will be published on this website.

Of particular interest is Agenda Item 7.a “Alleged Violation of NRS 116.31088”. This item was placed on the agenda via owner request and will address a potential violation of Nevada Law with regard to the Somersett Development Company et. al. Rockery Wall Lawsuit. For background on this alleged violation please see previous post of May 4th entitled “Rockery Wall Lawsuit – Authority to Proceed?”

Rockery Wall Lawsuit – Authority to Proceed?

At the April 25th BOD Meeting under Agenda Item 7.a, “Unanimous Written Consent – Somersett Development Lawsuit”, the Somersett Owners Association (SOA) Board of Directors (the Board) approved continuing the rockery wall lawsuit per the following declaration contained within a previous SOA Board signed and executed “Unanimous Written Consent” document (Note: it was not unanimous as Board member Jason Roland has recused himself from all dealings with the lawsuit due to his wife’s employment with Somersett Development Company):

“WHEREAS, the Board made a good faith effort to obtain ratification of the filing of the lawsuit, per NRS116.31088. in which if the Association desires to bring a suit to protect the health, safety and welfare of the members. The Board received 953 ballots, 716 votes in favor, 205 votes opposed and 30 unusable, thus representing 77% in favor of pursuing the lawsuit.”

“WHEREAS, BE IT RESOLVED: In light of the cost to repair and/or replace the defective walls, it is within the Boards reasonable business judgement to pursue the lawsuit and therefore agrees to move forward and continue to pursue the lawsuit against the Somersett Developer and associated trade vendors”.

Unfortunately, the preceding does not accurately portray the NRS 116.31088 statute, which under Article 1 (e) reads as follows:

“To protect the health, safety and welfare of the members of the association. If a civil action is commenced pursuant to this paragraph without the required vote or agreement, the action must be ratified within 90 days after the commencement of the action by a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated. If the association, after making a good faith effort, cannot obtain the required vote or agreement to commence or ratify such a civil action, the association may thereafter seek to dismiss the action without prejudice for that reason only if a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated was obtained at the time the approval to commence or ratify the action was sought”.

What the Board’s consent document did not mention is that the 953 ballots received only represent about 31% of the total number of allocated Association members and the 716 in favor about 23%. Given this, it is clear that member ratification for the lawsuit was not obtained via a majority vote as required by the NRS statute. That is, of the approximately 3000 association members, 1501 yes votes would be required for ratification, of which the 716 votes in favor fell abundantly short.

Therefore, the Board’s decision to proceed with the litigation appears to be in violation of the NRS 116.31088 statute, which does not grant them the authority to proceed without a majority vote, only to “dismiss the action without prejudice”. The unresolved question here is why the Board feels it is O.K. to violate the Nevada Statute that they themselves referenced? Unfortunately, there was no discussion on this issue during the Board meeting, only an acknowledgement of the consent document.

Note that this website, in a previous post, was in favor of ratification. However, it must be accomplished legally and not unilaterally dictated by the Board. Hopefully, we are not being led down the primrose path by the Association’s legal counsel, who one must assume approved the Board’s action to proceed with the lawsuit based on some legal basis other than “by a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated“. Clearly an explanation is needed.

Given that to date the only litigation correspondence communicated to  Association members at large has been 1) the delayed publication of the vote count (after some prompting) and 2) the SDC and Q&D responses to the law suit (required by law). Also, why the “Unanimous Written Consent” approach (usually used for time sensitive or emergency issues) rather than discussion and approval at the regularly scheduled open Board meeting? Perhaps a little more transparency is in order here.

Dark Skies or Not?

Submitted by Joe Bower, Sierra Canyon Homeowner

Exterior lighting has reached the point of sad ridiculousness. The photo is of trees at the Sierra Canyon Aspen Lodge.

And owners have to follow association Lighting Rules!!! What’s good for the goose is good for the gander.

Only Scrooge would object to colored lights during year-end holidays. But bright white lights the rest of the year would make him jump off the Brooklyn Bridge.

Sierra Canyon is a dark sky community per the PUD that created the community. The Lighting Rules that owners must follow support this concept.

When the Lodge tree lights are on, the unique opportunity for owners to sit outside and enjoy the open and dark skies is destroyed. In addition, unwanted light penetrating house windows that face the Lodge causes dining, entertainment, and sleep disruptions. Homes will have decreased values when attempts to sell them are being made.

All this on top of motorist distraction when driving by. Safety is the Number One concern of Sierra Canyon and Somersett.

Aspen Lodge Dehumidifiifier Update

Posted by Joe Bower, Sierra Canyon Homeowner

A filing with the Supreme Court on April 26 reveals that a Settlement Conference has been scheduled for Monday, June 11 at the offices of the State Bar of Nevada.

What and when will the Sierra Canyon Board tell SC owners?

The last time when there was a significant District Court action, on January 19, it wasn’t revealed to SC owners until January 30th. There isn’t any board election activity going on now for the board to hide behind – so voters won’t be influenced on which candidates to vote/not vote for – as there was then, so maybe the eleven-day period will be shortened this time.