Formal Demand to Rescind Approval of Issuance Agreement

UPDATE: The September 2 HOA vote raises even more serious questions.

At the September 2 Board meeting, Board President Drew Park stated, in substance, that:

• The Issuance Agreement does not create any new obligations;

• The Board was directed and/or authorized by the existing CC&Rs to enter into the agreement; and

• The provision permitting Club dues to increase by as much as 15% in any 12-month period had already been disclosed to homeowners through the CC&Rs and required disclosures.

We are now asking the Board to prove those statements against the actual governing documents.

First, the proposed agreement allows Club dues to increase by as much as 15% in a 12-month period. We have reviewed the CC&Rs and have not located language expressly granting the Club Owner that 15% annual increase right. If the Board maintains that homeowners were already bound by and properly disclosed this obligation, it should identify the exact recorded document, section, and page where that right appears.

Second, the agreement appears to impose a potentially significant new financial obligation on the HOA by requiring the Association to remit Club dues to the Club Owner even when the HOA has not successfully collected those amounts from delinquent homeowners.

Management has indicated there are currently approximately 46 delinquent accounts. At the current annual Club assessment of approximately $2,592 per home, 46 fully unpaid annual accounts would equal approximately $119,232 in potential exposure. The actual amount may be different, but that is exactly why this risk should have been calculated and disclosed before the Board voted.

We are demanding that the Board identify the exact CC&R or Bylaw provision that already required the HOA to cover uncollected Club assessments. If no such provision exists, then the statement that this agreement creates “no new obligations” deserves immediate reconsideration.

Nevada law also requires HOA board members to act as fiduciaries, on an informed basis, in good faith, and in the best interests of the Association. This is especially important where the Association is entering into a long-term agreement with a Club Owner affiliated with the declarant.

We have now formally requested that the Board:

• Suspend implementation of the September 2 approval;

• Rescind or formally reconsider the vote;

• Identify the exact governing-document authority for the 15% increase and delinquent-account obligation;

• Disclose the Association’s actual financial exposure for delinquent Club assessments;

• Preserve the meeting recording, drafts, redlines, communications, and related records; and

• Obtain independent legal review focused solely on the interests of the Association and homeowners.

This is no longer just about whether a 15% increase is too high.

The real issue is whether the Board approved a long-term agreement after being told its material obligations already existed when the governing documents may show otherwise.

If those obligations truly already exist, the Board should be able to identify them.

If they do not, homeowners deserve to know that before the HOA assumes additional financial and legal liability.

Please continue sharing this petition with your neighbors. The more homeowners who stay informed and involved, the harder it is for these questions to be ignored.