To Secede or Not to Secede?

There appears to be a rising sentiment among Sierra Canyon (SC) Homeowners (and supported by SC Board Members) to withdraw from the Somersett Owners Association (SOA) master association and become an independent HOA. This for a variety of reasons previously highlighted on this website, and apparently exacerbated by the Rockery Wall failure liability and ensuing special assessments.

However, is a divorce really possible? Most likely not. The SC sub-association is subject to the “master” declarations unless they are amended by due process. It is one thing for SC owners to amend their own association declarations, but quite another to amend the master declarations, especially given that there are no apparent provisions within the master declarations to permit a sub-association to pull out. Even if there were, the probability that a majority of ALL Somersett owners (not just Sierra Canyon owners) would vote to allow withdrawal is highly unlikely. A review of Nevada Law, NRS 116 Article 2 “Creation, Alterations, and Termination of Common Interest Communities”, addresses association mergers, but not disassociations. However, it does address “Termination” of an HOA, which requires an 80% vote of all unit owners. Not sure how or if this would apply to termination of the relationship between a master and sub-association. Perhaps some “Legal Beagle” out their would care to comment.

There have been indications that the SC Board is in favor of hiring legal counsel to investigate withdrawal from the SOA. Given that lawyers are always interested in “feathering their own nest”, one must be careful about being “led down the primrose path” here. This could result in a very costly endeavor. Most likely legal fees in the 100’s of thousands. It could be argued that SC’s relief from the $92/month common area assessment would more than offset SC’s legal costs. However, what additional costs would SC owners encounter from services no longer being provided by the SOA via this assessment?

There is also the Somersett Planned Unit Development (PUD) Book to consider. This is a recorded Washoe County document that governs the establishment and make-up of the Somersett community. To what extent would this require amendment and government approval? It is also possible that the original Declarant (Somersett Development Company) would also have a say in this matter. Most likely other unknown complexities to consider.

It is inevitable that when two governing bodies oversee the same territory, there can be disputes and misunderstandings. The resolution of which may just be a matter of education on the governing documents (those we all signed up for when purchasing our units) and whose responsibility it is to accomplish one thing or another.

There is no question that many SC owners feel they have been mistreated by the SOA, perhaps rightfully so. However, the key to resolving differences is cooperation and respectful dialog between the parties, something that currently appears to be lacking, at least on the part of some SC Board Members. Likewise, if the SOA has the authority to impose an action that is objectionable to SC, rather than unilaterly acting on it, perhaps some constructive discussion and common sense can prevail, with perhaps the granting of variances as permitted under Article VI Section 10 of the SOA CC&R’s.

Whatever the case, an attempt by SC to withdraw from the SOA master association should not be taken lightly, or acted on emotionally, as the probability of a successful outcome borders on zero.

The preceding represents the opinion of SU only, and is not based on any particular knowledge or experience relating to the separation of HOA master and sub-associations. Will leave that to others.

Comments from all sides welcome!