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Can Directors Under Investigation Be Suspended?
Posted By admin On September 10, 2010 @ 10:26 In Removal Election, Ann_Small, SCA Board, Community Affairs, Laws & Rules | No Comments
With the mounting evidence of flagrant abuse of power and allegations of suspected fraud going on against the SCA Board, the question has been asked: “Can the State Ombudsman suspend a director that is under investigation?”
Answer: no.
The governmental chain of authority (Ombudsman Office, Real Estate Division, Governor) cannot interfere with a corporate director’s duties without following the lawful due process involving allegations, investigations, hearing and judgment by the Commission for Common Interest Communities, or by a court of law. In both cases, those processes usually take years to complete.
On, the other hand, the laws provide that corporate share-holders (i.e., home owners) can conduct a “removal election” for one or more unacceptable directors. The removal process can be completed in a matter of a few weeks–if over 17.5% of the members vote in favor of removal.
That internal process protects the rights of the owners, and allows action to be completed fairly quickly. It has been effective in many NV homeowner associations in the past decade. And, when it looks like they are likely to be “removed” in an election, volunteer directors can elect to resign in lieu of being forcibly rejected by neighbors.
Of course, when there are suspicions of illegal behavior by directors, citizens are required by law to “report” on such concerns to the appropriate law enforcement agencies. Citizen(s) are not required to prove their concerns–that is the job of law enforcement.
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