That rumors are alive and well in Sun City is self evident, even to the casual observer. Those who have recently looked at our local CATV Channel 99 can find Favil West and Bob Berman responding to or shutting down this or that rumor of the week. While some rumors are strange and stretch credulity, they have acquired a life of their own perhaps due to a lack of trust on someone's part or due to the belief, however faulty, that there must be a grain of truth in the rumor.

Occasionally, though, some rumors have been around for quite a while--sitting out there like an orphaned child--waiting to be rescued and deserving special attention. I believe it's time to focus some light on one such rumor.

For the longest time, a rumor has been circulating out there that an oral agreement has existed between the lessee of Trumpets and the landlord that affects or impacts in some manner the terms or conditions of the lease. This rumor should be a very simple one to put to bed. Either such an oral agreement(s) exists or it does not. If the rumor is false and no such agreement ever existed, the matter is resolved.

On the other hand, if there is some truth to the rumor, there is a very heavy burden on RMI and the Board to make this disclosure to members in a timely manner. If that paper document handed out by Administration purporting to be a true copy of the lease is in fact not a true copy of the lease as amended by an oral agreement, we may have a compliance problem under state law, known as NRS 116 (see the statute below). Providing members with only a portion of a contract, in this case consisting of only the original written lease agreement, does not comply with NRS 116 if an oral agreement exists.

What does NRS say? NRS says that "the executive board of an association shall, . . . make available [to unit owners] . . . . without limitation, all contracts to which the association is a party." An incomplete or a partial contract does not constitute a contract to which the association is a party to the extent there exists an oral agreement that is alleged to apply to such contract. If such an oral agreement exists, it must reduced to writing and made part of the original lease agreement.

If the Board alleges there is no such oral agreement, the Board is then precluded from taking any settlement action that would have the effect of recognizing the existence of an oral agreement.

The Board and RMI do not have any choice or discretion in complying with NRS 116 since we as members of the Association are entitled to know the contents of any contract, inlcluding contracts (such as the Trumpets lease) that have been modified in any way. The fact that the lease itself prohibits oral agreements does not negate the possibility that such an oral agreement exists.

There is no alternative available to the Board or RMI other than to provide members with a full and complete disclosure of the terms and conditions of the lease when a request has been made for a copy of the lease. Any such oral agreements must be reduced to writing and made a part of the original lease. The Association may not evade their duty to comply by claiming confidentially since any such oral agreement, if one exists, is by its very nature not subject to a claim of confidentially.

Here is a list of some questions needing answers:

• Is it true that such an oral agreement exists?
• Is there more than one such agreement?
• What oral agreements were made prior to the date of the lease, following the signing of the lease up to the beginning of ongoing negotiations?
• What are the entire contents of any such oral agreement?
• Who are the parties to the agreement?
• When was the agreement entered into?
• What is the background for such an agreement?
• Have the bona fides of the agreement been attested to?
• Did any of the parties to the agreement commit that agreement to writing?
• If the agreement was not committed to writing, what is the explanation for not doing so?
• How may any such agreement affect the Association?
• What is the legal foundation for concluding that any such agreement actually impacts the terms and conditions of the lease?  

Ron Johnson 24 July 2006

Books, Records and Other Documents

      NRS 116.31175  Maintenance and availability of books, records and other papers of association: General requirements; exceptions; general records concerning certain violations; enforcement by Ombudsman; limitations on amount that may be charged to conduct review.     

1.  Except as otherwise provided in this subsection, the executive board of an association shall, upon the written request of a unit’s owner, make available the books, records and other papers of the association for review during the regular working hours of the association, including, without limitation, all contracts to which the association is a party and all records filed with a court relating to a civil or criminal action to which the association is a party. The provisions of this subsection do not apply to:      (a) The personnel records of the employees of the association, except for those records relating to the number of hours worked and the salaries and benefits of those employees;      (b) The records of the association relating to another unit’s owner, except for those records described in subsection 2; and      (c) A contract between the association and an attorney.

2.  The executive board of an association shall maintain a general record concerning each violation of the governing documents, other than a violation involving a failure to pay an assessment, for which the executive board has imposed a fine, a construction penalty or any other sanction. The general record:      (a) Must contain a general description of the nature of the violation and the type of the sanction imposed. If the sanction imposed was a fine or construction penalty, the general record must specify the amount of the fine or construction penalty.      (b) Must not contain the name or address of the person against whom the sanction was imposed or any other personal information which may be used to identify the person or the location of the unit, if any, that is associated with the violation.      (c) Must be maintained in an organized and convenient filing system or data system that allows a unit’s owner to search and review the general records concerning violations of the governing documents.

3.  If the executive board refuses to allow a unit’s owner to review the books, records or other papers of the association, the Ombudsman may:      (a) On behalf of the unit’s owner and upon written request, review the books, records or other papers of the association during the regular working hours of the association; and      (b) If he is denied access to the books, records or other papers, request the Commission, or any member thereof acting on behalf of the Commission, to issue a subpoena for their production.

4.  The books, records and other papers of an association must be maintained for at least 10 years. The provisions of this subsection do not apply to:      (a) The minutes of a meeting of the units’ owners which must be maintained in accordance with NRS 116.3108; or      (b) The minutes of a meeting of the executive board which must be maintained in accordance with NRS 116.31083.

5.  The executive board shall not require a unit’s owner to pay an amount in excess of $10 per hour to review any books, records, contracts or other papers of the association pursuant to the provisions of this section.      (Added to NRS by 1999, 2996; A 2003, 2245)