HENDERSON (KTNV) — Condo owners at the 85-unit Somerset Park property in Henderson will soon have to make their first payments after an emergency replacement was made on its failing water system.
This is a community we've been talking about for nearly a year. They dealt with water leaks and sinkholes until the City of Henderson stepped in to fix it.
For some, the problems are just beginning, though.
I spoke to residents in the area about how this whole situation impacted them.
Last September, the city fully replaced the water system and fronted the cost; however, owners now have to pay the city back using two options.
They had a chance to make one $8,026.99 payment by March 31 to avoid a tax lien on their property, but now the lien is in place and the first of eight $1,003.37 payments is due in August. The payments will last through March 2027.
Here is a link showing the repayment system the City of Henderson referenced in its letter to residents detailing the payments. It states that interest will be added to the payments if they are not made in time.
“It’s a lot, and I don’t blame anyone for struggling with that," said Alexis McKee who moved to Somerset Park in May 2024.
“Very, very tough," said Kenny Kester, a Somerset Park resident since 2018.
Both Kester and McKee own their units, and both decided to pay the more than $8,000 in full to avoid a lien on their property, but it wasn't easy.
“I myself had to sell my two motorcycles to pay for the damages," Kester said.
I asked McKee if she had depleted her savings account to make the payment.
“Yes, I’m still trying to get back to what I was at before," McKee said.
Despite the hardship, the city's $682,293.74 fix was nearly half of what the proposed HOA's fix would've been.
How did this all begin?
In September, HOA board members and several state lawmakers who own units on the property told me the cheapest fix they had was estimated at $1.2 million.
The main issue, though, is how they got here.
It all started with issues involving their HOA. I previously reported the former manager over the HOA, Diana Stegeman had her certificate suspended.
Click here to read the full report regarding Stegeman.
According to Nevada Real Estate Division documents, it was revealed she forged checks at a previous development she managed. Some state lawmakers associated with the property later told me they had proof that she did it at Somerset Park, too.
That meant there was no money to fix the problem.
“One of the things the law requires is a forced savings account, it’s called the reserve fund," said Bruce Flammey, Las Vegas HOA lawyer.
Flammey tells me it's all detailed in NRS 116.
He pointed out NRS 116.31152, 116.3102, 116.3115 and 116.31151.
According to state law, the reserve fund is supposed to have enough money to cover all the future repairs of the common area, pretty much the entire portion of the property outside of the individual units that the HOA owns.
This includes landscaping, sidewalks, the roadway, plumbing and more.
“The idea behind the forced savings is if you take small pieces of the money you’re going to need for 20 years, on a line item, for example, that says plumbing line repair, then at the end of 20 years you should have most if not all of that money," Flammey said.
The law states that the HOA board is required to have the common area inspected every five years to evaluate how much longer each element of the common area will be viable before a repair.
This allows the HOA board to better budget out the money needed for each fix.
The board then has to review the results of that study every year and determine if the reserves are sufficient. If it's not, then they need to increase the HOA fee to have more money to set aside to make sure that when a repair is needed, they can cover it, or they need to move money around to still cover everything.
The board must also list out the amount of money going toward each fix in their budget. This allows everyone to see just how much money goes where, the total amount it will cost when adding inflation each year, plus if any changes need to be made.
Flammey tells me compound interest is also added on to the amount in the reserve fund.
Flammey says if your HOA or manager is not doing all of these steps, along with others listed in NRS Chapter 116, then you can get on the board yourself to make a change, petition to remove a member of the board, or take legal action against the people responsible for the mismanagement, all to make sure your community does not end up in a similar situation.
You can also reach out to the Nevada Real Estate Division who has oversight over HOAs.
