Decision Time !

Now that the Somersett Owners Association (SOA) has lost the Rockery Wall lawsuit against the Developer and its associated Subcontractors, it is time to address the perceived Somersett Golf and Country Clubs (SGCC) liability for its share of the Rockery Wall repairs paid for by the SOA. We say perceived, because the SGCC has never acknowledged a liability in this area. In this regard, there has been a lot of ongoing dialog, not only on this website, but on the Somersett Nextdoor website as well, some of which is factually correct and some incorrect. To set the stage for what lies ahead, perhaps some historical recap is in order.

  • In 2005 the “Second Amended and Restated Declaration of Covenants, Conditions and Restrictions of Somersett” were duly recorded and still constitute the SOA’s controlling CC&R’s. Article VII Sections 5 & 6 of the CC&R’s clearly identify the SGCC as a separate entity from the SOA with regard to its ownership, operation and right to use (an Article that obviously needs updating an as result of the SOA’s purchase of the SGCC Land, Water Facilities and Water Rights).
  • In 2012 the SOA’s then Developer controlled Board unilaterally (i.e., without Owner vote) entered into an agreement with the SGCC to divert $15/month of Owner assessments to the SGCC in exchange for some amenities. This to offset SGCC operating losses. This action was subsequently challenged by a group of Owners before the Nevada Real Estate Board, who after taking their time, decided that the SOA Board acted improperly and basically directed that the SOA redraft the agreement terms, modify the CC&R’s to permit such an agreement, and submit it for majority Owner vote.
  • In 2014 after paying approximately $1,235,000 to the SGCC under the initial agreement, a new agreement was drafted up by a different and now Owner controlled Board. However, the new agreement took an entirely different approach as it called for the actual purchase of the SGCC’s Land, Water Facilities and Water Rights for $2.75M with a leaseback of such to the SGCC at $2,200/year. The CC&R’s were amended to allow for this type of purchase and both the Purchase Agreement and Amended CC&R’s were submitted for SOA Owner approval and subsequently approved by majority vote. It was also approved by SGCC Membership as they were in need of the money for operating and clubhouse building expenses. As one would expect, the executed Purchase Agreement contains several provisions regarding SGCC responsibilities as the Lessee and SOA responsibilities as the Lessor.
  • In January 2017, two Rockery Walls on the hillside below Trail Ridge Court and adjacent to the SGCC Hole #5 failed after considerable precipitation. This consisted of an upper wall on SOA Common Area property, and a lower wall on SGCC leased property.
  • In October 2017, the SOA Attorney issued a letter to the SGCC advising them of their liability for the wall failure on the SGCC leased land. This under applicable provisions of the Purchase Agreement, which were identified in the letter.
  • In November 2017, the SOA Attorney issued another letter to the SGCC advising that the violation notices contained in the October 2017 letter would be placed on hold pending release of an engineering report on failure assessment. Also, that the SOA would consider paying for damages provided the SGCC will reimburse the SOA on “mutually agreed terms”. The SOA subsequently paid for all repairs without any written agreement with the SGCC.
  • In December 2017, the SOA filed its Chapter 40 Complaint for Damages lawsuit against Somersett Development Company et al. This to recover SOA costs for Rockery Wall repairs.
  • In January 2018 Construction Materials Engineers, Inc. issued their Preliminary Failure Investigation Report, which concluded the lower wall (on SGCC leased property) failed first subsequently causing failure of the upper wall (on SOA Common Area property).
  • In July 2018, the SOA and the SGCC entered into a “Tolling Agreement”, wherein the parties agreed to place litigation on hold pending the outcome of the SOA’s Chapter 40 lawsuit. Under this agreement the SGCC is paying the SOA $500/month in consideration of the loan the SGCC took out to pay for repairs. This agreement ends on December 31, 2019, but also has a 30 notice termination clause.
  • On October 2, 2019 the Washoe District Court ruled against the SOA in its Chapter 40 lawsuit and issued a Summary Judgement in favor of the Defendants.

Which brings us to the present, and what action will the SOA Board now take? We say the SOA Board, because the SGCC has no incentive to do anything in the absence of any agreement for the repayment of any money or other assets. Which leaves the SOA with the following options:

1. Appeal the Court ruling and extend the Tolling Agreement with the SGCC – What would this cost in legal fees and what is the probability of overturning the decision?

2. Do nothing – Accept the status quo and move on. Most likely preferred by the SGCC Members.

3. Proceed with a lawsuit against the SGCC for the recovery of funds for repair of the wall on SGCC leased property (~$680K). In this event, what if:

      • The SOA wins – Does the SGCC have the resources to pay? Probably not without an assessment on its membership. Would it require them to file for bankruptcy with the result that they default on the Purchase Agreement and that all Land, Water Facilities and Water Rights revert back to SOA control? What would the SOA do in this event and what would be the short and long term costs to owners?
      • The SOA Looses – How sure are the SOA Attorneys and Consultants on the cause of failure and that the Purchase Agreement provisions will prevail in a Court of Law? The SOA Attorney’s recent advise on the James’ and Rockery Wall lawsuits certainly did not prevail, costing the SOA around $1M. What legal costs would the SOA be out in this regard?

4. Negotiate a settlement with the SGCC outside of a Court of Law. Rather that attempting to recover the entire $680K, perhaps the SOA and SGCC can reach an agreement on a lesser amount (e.g., split the cost?).

Note that all of the above could have been avoided if not for the ill advised Purchase Agreement, which has placed this burden on the SOA Membership instead of on the SGCC Membership where it belongs!

Resolving this issue will certainly be a challenge for the SOA Board of Directors, which will consist of two new members come this November. With the two scheduled “Meet the Candidate” nights, perhaps our candidates will express their viewpoints on this subject.

Comments from our readers are solicited, particularly with regard to the following:

  1. Which of the above four options would you support – appeal, do nothing, sue or negotiate?
  2. Should the SGCC default on the Purchase Agreement, what direction should the SOA take?
  3. Do you believe that the SOA membership has an obligation to help out the SGCC financially to keep them afloat?
  4. To what extent do you believe the two SOA Board members who are also SGCC members, should recuse themselves from discussion and voting on SGCC related issues?

References:

26 thoughts on “Decision Time !

  1. After the rockery wall failed in January 2017, The Somersett Country Club Inc took out a loan of $600K from Meadows Bank 3/9/2017.

    The best early estimates for fixing their wall which failed ranged between $500,000 and $1,000,000.

    Fixing the wall was a high priority to the SCC as the fallen rocks affected the Fairway on Hole 5….
    It seems that the SCC might have been acting proactively, to make sure that they had monies available to fix their wall…maybe

    When the SOA Board negotiated the Tolling Agreement in July 2018, they must have known that there was no collateral available to cover the repair costs ($680K) for the Country Club Walls… This could mean the Board has violated their Fiduciary Duty when they signed the Tolling Agreement, agreeing to suspend the SCC’s payment, awaiting the results of the lawsuit. All homeowners in Somersett have each paid $215 (of the $1200 special assessment) on behalf of the private country club.

    It is likely, maybe, that when the bill is presented for payment again, in January 2020 when the Tolling agreement expires … that the SCC will be unable/refuse to pay and then file for bankruptcy.

    The SOA financials for 2020 do not obviously have any contingency funds for this event … or plan of action… which would necessitate bringing an Independent Golf Course operator to operate the SCC as a Public Golf Course (and the money losing Championship 9 as well?) – mimicking the approach taken by Wolf Run and Arrowcreek.

    Perhaps the Board can explain to all the residents what contingency funds are available in the 2020 budget in the event of the SCC bankruptcy, plus funding the water-works repairs necessary to maintain the water rights?

    Maybe that is what the proposed $13/month association dues is really for – $13 x 12 = ~$500,000. (cost of the estimated repairs to the SCC irrigation system range from ~$400K to $750K).

  2. The homeowners have already been assessed for the wall repairs. Suing the SGCC is a mute point as they have no money and if membership is assessed there will be no members as the results would place an unlimited liability on the SGCC which no one would accept. I dont think members have any equity in the SGCC. Bankrupting the SGCC would place all and future rock wall repairs on the SOA, which they now have. Bankrupting the SGCC would place the responsibility on running and maintaining the golf course on the SOA with no members to support it.At least now the golf course breaks even. Would the SOA like to cover the burden of running and maintaining the course with no members. Or the SOA could let the golf course revert to nature and have another eyesore on there hands and the reduced property values that would ensue,(take a look at DeAndrea). The reduced property values would be much greater the the $600K owed by SGCC.

    The best course of action, in my opinion, would be to rewrite the agreement with the SGCC eliminating any responsibilty for rock wall problems and work with the SGCC to find a management team that would possibly purchase the golf course and run it and use the money to reimburse the homeowners or create a fund to cover future rock wall liabilities which are more than likely to occur. Also we need the homeowners of Somersett to support the CC with attendance at the great restaurant which they do not do now.

    1. Mr. Harder,

      From your comment it would appear that the SGCC has no contingency funds for any event and are just operating on a day to day basis, and that to prevent bankruptcy, Somersett owners should willingly accept funding some of their liabilities (does this include needed repair/replacement of Water Facility equipment clearly the responsibility of the SGCC?} to prevent same? Country Club members like to base this on their claim of a detrimental impact on home values should bankruptcy happen, without any hard data to back it up. With regard to assessments, like it or not Somersett owners were all assessed $1200 to cover Rockery Wall repairs, are you saying that SGCC members would not agree to any assessment to “save” their golf course from bankruptcy for whatever reason? sounds like a lack of loyalty to me. However, that said, I like your suggestion that the SOA and SGCC work together to find a purchaser for the golf course that would take it out of both our hands. Also, that residents frequent the SGCC restaurant.

      Jim Haar

    2. Seems like SGCC should have made some plans long ago to become financially liable without depending on continuous bailouts from SOA. Foreclosure now seems like the appropriate action. As an owner in SC, I do not believe that the golf course has any positive impact on my property value, but may have a negative impact by increased HOA fees to support SGCC.
      Maybe those who think their property values would be negatively impacted, should come up with the money to support the SGCC, not all of SOA. Your proposal in the last paragraph seems to have merit, and may have been a viable solution, but it appears that SGCC has done nothing to remedy their financial obligations other than to turn them over to SOA.

  3. The two conflicted board/SGCC members need to fulfill their fiduciary duties and recuse and “go fishing” when votes are to be taken. Time to resign from the board? It’s obvious why they are on the board. Man up.

    In any case, hang onto your pocketbooks.

  4. I think we need new attorneys. The one we have are too expensive & obviously, not very good. I guess Sommersett is now a “cash cow.”

  5. As I will not be at the meet the candidate nights because of prior commitments, I will comment on your questions based on my read of the attached documents which I thank this blog for providing. It has provided me with more understanding of the history and legal ramifications.
    (1) I would demand payment under the provision of the Purchase Agreement and failing that go to court or arbitration (which is cheaper) to force payment. If the SGCC cannot pay then take action to seize the clubhouse or other assets. If the SGCC files for bankruptcy protection then the lease is done and we can dispose of the property any way we see fit. If they file Chapter 11 then we can force better terms then we have. The current lessee is using the fear of losing the golf course and subsequent property value reductions to get incredibly good terms. It cannot be sustained by the SOA. What is the next calamity to fall on the golf course that SGCC cannot pay?
    The other options presented are not viable. Appeal of the summary judgment is useless. The judge virtually called it a gossamer thread of whimsy. Do nothing is what the lessee wants to keep his great terms that he can fail to meet with impunity as demonstrated by the denial of the warranty under the terms of the purchase agreement. No thanks. Negotiations in the past seem to yield even more favorable terms to the lessee to save the golf course. No thanks again.
    Press the terms of the agreement and then sue for breach if no compliance.

    (2) Answered above. Sue for breach and then upon judgment which is likely, foreclose and do what we will with the property.

    (3) I think the SOA has already provided significant support for the SGCC and we are at our financial breaking point with little prospect of future recovery from the lessee. The SGCC has been given extremely good terms over the years to retain the golf course but there has no improvement in outlook. Instead SOA is faced with even greater unknown but real liabilities from any future calamities.

    (4) For the two board members who are SGCC members, I would expect to act in a fiduciary manner and if they cannot be objective then they should recuse themselves. I would rely on their good conscience and sense to accept the facts and vote accordingly without prejudice or personal bias.

    Thank you for the chance to respond.

    Vote for me. Could not resist.

  6. To begin with when a person or entity feel they have to rely on the court system to solve their problem they are in trouble.
    There was more than one earthquake around the time of the rocky-wall problem, there was nothing said about that ? Is their insurance ?
    The Golf Course is just a loser.

  7. Thank You to “Somersett United” for spelling out the facts and detailed history of the SGCC and its current state of affairs. SGCC members are legally and morally bound to live up to their fiscal responsibilities or surrender the ownership of this exclusive club. All owners in Somersett have given more than their fair share to the SGCC to build a clubhouse and provide the SGCC members with an “illusion” that they are members of an “exclusive” club. If it wasn’t for the $2.75M gift from the SOA then, there would be no SGCC. I completely agree with the facts as stated. The two BOD members, who are also members of the SGCC, are legally bound to recuse themselves from voting on any issues regarding the SGCC or they will have failed their fiduciary responsibilities and could be subject to legal consequences.

    1. How’s this for “in the best interest of homeowners..”? If they recuse themselves, there is no board quorum..The board has not made any effort to change this conflict of interest, therefore they have violated NRS 116..

  8. Its clear SOA needs new attorney’s. They current firm started a fight with the builders they should have known the SOA would loose. Even as a layman the action against the builders appeared to be a longshot. Guess what, the attorneys won because they still got paid. That time and money would have been better spent on working on the agreement between the SOA and SGCC.

    Please help me understand something from the comments above. Would the SGCC would go bankrupt over $680k? That is about the value of one house in the SGCC community.

  9. The SOA BOD is not responsible for solving SGCC’s problems and should not attempt to do so. The SOA has a fiduciary duty only to SOA members. The BOD should determine what if any funds are owed to SOA and proceed to try to collect them. A deal negotiated without legal action would be preferred. I will not opine on next steps until we determine where we are. SOA members have paid special assessments and now a $13/month increase. So if SGCC members step up and pay what they owe, then problem solved. If SGCC members are unwilling to pay then SGCC is not a going concern. No point in speculating beyond this point until BOD knows where SGCC stands on paying up.

  10. As a homeowner and SGCC member unless the SOA accepts full responsibility for rock wall liability no management group will ever buy the club. There is just too great a liability. Therefore I believe it is in the best interest of the SOA to work out an agreement whereby the SGCC is relieved of any liability, and as part of the agreement the SOA and SGCC immediately seek a buyer to take over ownership and management of the club and the proceeds are used to repay the loan and if insufficient funds are received the remainder of the loan be forgiven. This solution provides funds for the SOA to maintain a contingency fund for future rock wall repairs and still have a viable golf course that is one of the best in Reno. No matter what was agreed upon in the past the SOA knew any major rock wall problems would be theirs and the homeowners responsibilty.

    1. Charles

      The transcript of the recent Washoe District Court hearing makes interesting reading – specifically, the rock walls are supposed to last for 50 years. So the suggestion that some of the 17 miles of community walls might need repair, means that reserve funds should be accumulated towards their maintenance.

      Many homeowners have rockery walls on their property, and it is their responsibility to maintain/repair them. Walls on the private Golf Course, outside the PUD are the responsibility of who controls them – in this instance the lessee – the Private Country Club!

      I don’t understand what there is to argue about.

      I presume from your comments that the Country Club is unwilling or unable to maintain their leased property and pay for repairs to the landscaping and water facilities. Hence the agreement should be cancelled.

      As you suggest, the SOA management should invite a professional golf management company, such as Duncan Golf Management, into to assess operating the Championship Golf Course as a public course. Hopefully this can be worked out.

      If we are told that the Championship Golf Course is not viable by a professional management company…then we should convert it into Green Space and sell off the surplus water rights (at least 200 AF can be sold at $6 – 8K/per acre feet = $1 million +). The Golf Course should be annexed into the PUD as open space, note that the Canyon 9 is a part of the PUD and we can still call Somersett a Golfing Community.

      Please note, that the value of the houses in the Whisper Rock area of Somersett, even though they are on the browned out, unwatered former Northgate Golf Club, have recovered beyond their pre-Great Recession values. A much better scenario than the Toll Brother Houses on the green Championship golf course (eg Fairway). Remember there are only 3 things that matter for property values – Location, Location and Location. D’Andrea is not here, and yes the houses built on the golf course there in 2004 are now selling for more than the original owners paid – with scrubby desert open space!

      1. Well written Geoffrey. In the past decade golf clubs have been going bankrupt with regularity. One conclusion of this trend is that the country club “business model” is not viable except for the 1% of US wealth holders. Except in the case of the very wealthy members are not willing to pay monthly fees that cover the cost of sustaining the club. If SGCC can not financially support itself without SOA subsidies then it is not viable on going concern. Such has been then case on many of the clubs folding.
        SGCC needs to come clean on the state of their finances before any arbitration or negotiation begins and answer some critical questions. Is SGCC currently generating enough cash flow to sustain itself through another recession or would SOA be called on to deliver another handout? Can SOA cover the cost of replacing or repairing buildings and equipment? Or will this be tossed to SOA?
        At some point the SOA Board (excluding SGCC members) should engage one of the 2 or 3 local golf course management companies to assess what is or is not viable with the SGCC property.
        SOA subsidizing SGCC ad infinitum is hardly an alternative. (How would that effect property values?)

        1. I agree that the SGCC probably doesnt have the funds for the rock wall and water repair as it is just breaking even. I am not on the board and am just a simple member and homeowner in Somersett. But I think the community is better off with the great golf course we have and I do believe that property values will suffer if the course ceases to exist. However , if the Golf course cant make it with membership dues, mainly because of a lack of support from the community( I understand golf is not the thing it used to be, and we only have 300+ members while we need 500 to make it profitable) and increasing dues is not feasabile as other courses in the area are cheaper, the SOA will have to maintain the property as a green belt which will require water, mowing and maintainence which will require approximately 500K/yr.(guess) The SOA and SGCC need to work together to figure out a solution that will benefit the community. Fighting and legal proceedings will not do this. The SOA’s track record of legal proceedings leaves much to be desired

          1. Mr. Harder,

            Thank you for your candor on the SGCC’s financial status and I agree with your suggestion that the SOA and the SGCC work together to find a solution. However, let me address some of your other comments:

            1. Living directly adjacent to the Country Club’s 4th fairway, I should agree that the Community is better off with the Golf Course. However, that really depends on what is done with the land if the SGCC should cease to exist. Depends on the solution.
            2. Your comment that the golf course is short of membership dues “mainly because of lack of support from the community” is somewhat disingenuous (hopefully I have misconstrued your intent here). What do you expect, that Sommersetters join the Country Club even if they are not interested in golf, or do not have the excess cash to do so. but should somehow otherwise support the SGCC’s bottom line?
            3. You state that “increasing (SGCC) dues is not feasible as other courses in the area are cheaper”. That is always the case for private Country Clubs. SGCC members should expect to pay more. Sounds like the SGCC is lacking loyalty and a commitment from its membership.
            4. You agree “that the SGCC probably doesnt have the funds for the rock wall and water repair”. But apparently the SOA does as all it has to do is increase unit owners monthly assessments ($13 for 2020) or issue a special assessment ($1200/owner for 2019) to cover their shortfalls (as well as the SGCC’s in the case of the SGCC Rockery Wall failure and potentially for Water Facility repairs). Why cannot the SGCC do the same with their membership? Raising SGCC equity member dues by $50/month and assessing an additional $1000 to cover shortfalls would put ~$500K in the SGCC’s pocket. Private Country Club members expect to pay more for the status of belonging to a Private Club and the benefits it provides. However, it appears that the SGCC members do not fall into this category. Perhaps it is time to admit that the SGCC simply cannot exist as a Private Country Club.

            Hopefully your candor does not put you at odds with the SGCC’s Board as they (as well as the SOA’s Board) always seem reluctant to publicly share the SGCC’s financial status with the community.

            Jim Haar

            1. Thank you Jim Harr! Well said! I have a question: When we bought our home in Somersett we were encouraged to become equity members of the SGCC. We declined when we were told that equity members might be held financially liable should SGCC not be able to pay its bills and/or go bankrupt. Has anyone checked to see if LEGALLY the SCGG equity members are personally liable?

          2. Charles, the SGCC’s record of doing anything for the community is, well, absent.. they are verbally vicious, if anyone cites them for seeking financial help from their neighbors, instead of reaching into their own pockets. If each SGCC member wrote a check from his/her own account for $3000 (a pittance for the elite club) we would not be having this discussion.

  11. OUR OPINIONS ON SOMERSETT UNITED’S QUESTIONS:

    QUESTIONS #1 & 2
    1. Which of the above four options would you support – appeal, do nothing, sue or negotiate?
    2. Should the SGCC default on the Purchase Agreement, what direction should the SOA take?

    ANSWERS 1 & 2: Given that : *It is our understanding that the current attorneys have failed to win two major lawsuits ….which they advised us to pursue (against the Developer and James Family)
    * These lawsuits have resulted in massive legal fees for the SOA/Homeowners. We feel it is best to consider using a different attorney, and definitely one with no ties to SGCC, for the following actions:

    1). The SGCC MUST BE SELF SUPPORTING AND INDEPENDENT OF SOA /HOMEOWNERS. Make a formal/legal demand for SGCC payment for all costs incurred by SOA/Homeowners ASAP. (including , but not limited to : payments, loans, loan origination costs, interest, legal fees, and potential legal costs/damages should SGCC file for bankruptcy ).

    2). If SGCC fails to fulfill ALL their responsibilities according to Purchase Agreement and findings of the Geo-Tech report . Take legal action to recoup SOA/Homeowner costs via taking control of SGCC assets. It is our understanding that SOA will retain water rights and thus we can maintain green spaces for future uses to be determined by the majority of homeowners. The green spaces will need to be watered and mowed, but not manicured for golf.

    QUESTION #3. Do you believe that the SOA membership has an obligation to help out the SGCC financially to keep them afloat?

    ANSWER #3: ABSOLUTELY NOT ! We still have the 9 hole course. We will still be a golf course community. Given the current decline in golfing nationwide, if SGCC can’t ,or won’t , support themselves now, there is little hope their financial situation and level of cooperation will improve in the future. Continued uncertainty will drive prices down . Friends of ours were discouraged from looking in Somersett ….by a local realtor ….who told them, “SOA/SGCC is having some problems.” Some SGCC members have been making negative comments on social media about Somersett United, and appear to be trying to bully non-SGCC members into silence on the issue of reimbursement by SGCC. With 3-5 minutes of posting my concerns about the recent $1200 Special Assessment, it appears I have now been blocked from using the Somersett FB page.

    SGCC MUST BE SELF-SUPPORTING, OR HOMEOWNERS WILL BE FACING EVER-INCREASING DUES AND SPECIAL ASSESSMENT TO SUPPORT SGCC IN THE FUTURE..

    QUESTION #4
    To what extent do you believe the two SOA Board members who are also SGCC members, should recuse themselves from discussion and voting on SGCC related issues?

    ANSWER #4 : Absolutely must recuse themselves or resign. Those SGCC members on the BOARD who voted to have SOA/Homeowners shoulder the cost of SGCC responsibilities, if any, should resign. If not, SOA should contact Nevada Ombudsman

    1. I believe the SGCC has a loan with Meadows Bank, for $600K.. the Deed of Trust would gives them all the assets, if they default on their loan (unless it has been paid in full at this time..but I don’t think so). The SOA would get nothing.

  12. MY THOUGHT….and I am open to constructive comments and/or corrections:

    Based on a chart (previously posted on SU) said to reflect SGCC financials from 2010-2018, it appears that in 2018 SGCC took in approximately $3,148,000, but spent approximately $3,257,000.

    On Oct 11 2019 …on the SGCC FB website…There appear to be screenshots from the embedded SGCC magazine “SETT”. In the back of this booklet there is a chart which contains mention of “prioritize and budget outside equipment needs, replacement and course improvements, clubhouse improvements and maintenance., improve website…new ambassador program…indoor winter practice facility…improve member experience….repurpose old clubhouse….”. I didn’t see any mention of budgeting to fulfill the Purchase Agreement . Unless I missed it, doesn’t seem that repaying the SOA Homeowners or replacing/repair of the water pump is a SGCC priority.

    QUESTION: Is it reasonable to conclude that money SPENT , not money coming in, is the problem? By cutting back on expensive golf events, parties, “improvements”, and “repurposing”, might SGCC financially be able to pick up their share (if any) of the rockery wall repair and the cost of the upcoming repair or replacement of the water pump?

  13. There are 4 candidates for the HOA Board of Directors. Three are new and one (Frank Leto) was one of the board members to nullify the vote of the homeowners to not proceed with the wall legal action. Its my personal opinion that he (or any other board member) should not be considered based on that action. Its also my personal opinion that there are no specific conditions in the Somersett CC&Rs or the NRS requirements that could supersede a specific requirement that vote of the homeowners was needed by at least 50.1% of the total membership. Something happened between the HOA Board of Directors, HOA attorney or maybe the management company which needs to be explained to the membership. I wrote a letter to the HOA Board of Directors asking them to explain and advise where in the HOA CC&Rs or any NRS law that would allow the board members to nullify a required vote of the homeowners. I received a letter from the HOA attorney “The SOA Board believes it has complied with the law and followed our advice on the commencement and continuation of the lawsuit.” I have belonged to many HOA’s and read CC&R’s of those and others and I have never seen any condition in CC&R’s where the Board of Directors could nullify a vote of the members. Based on how the HOA attorney responded to my letter, they knew a vote was required (50.1), but the HOA attorney advise the Somersett Board on something in the CC&Rs or NRS, but they did not want to identify those conditions. Its my personal opinion that the Somersett HOA Board of Directors exceeded their powers as board members and proceeded without the approval of the homeowners. If the board members disagree, then they can explain in great detail how it was within their powers to nullify a required vote of the homeowners.

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