Mike Kosovo’s Testimony in opposition to SB 417

SB 417- Testimony in opposition, Senate JudiciaryCommittee Tuesday April 11, 2023

My name is Mike Kosor. I strongly oppose SB 417. I serve as one of only two elected directors on mydeclarant controlled Master Board of a nearly 9,000 units community.

Senators, we should be seeking to ADVANCE board transparency, especially where boards are declarantcontrolled, and ENCOURAGE greater participation of owners in their HOAs. THIS BILL DOES THE OPPOSITE.

Prohibitions on defamatory statement is appropriate and long a violation of NRS. But as written, this bill (sec 2 & 3) will allow the association to determine what they consider defamatory and ultimatelyprovide the association the ability to censor free speech based on opposing positions from that of theboard (or declarant when appropriate). This section of NRS 116 was intended (in 2013 when added) toprovide the Division and Commission powers to protect homeowners from bulling, “out of control” HOAcorporate boards and management companies. Existing civil laws dealt with owner misconduct- amisdemeanor. What is now proposed creates as new crime and flips the protection on its head. It is anassault on First Amendment rights, an end-run of Nev anti-SLAPP laws, and generally works to chillowner opposition to the governance of their communities- not to mention a rainmaker for attorneys and management companies.

We have association attorneys routinely writing cease and desist letters to homeowners based onopposition to board actions made in person and/or on social media, most all of which are baseless and used simply to intimidate. They do not file litigation because 1) a vote of owners is righty required andmore importantly, 2) most all actions would be thrown out as baseless. But the threat of action -baseless or not- is the chilling element. If they could, as this bill attempts to permit, side-stepping theowner vote requirement or by using proxies, the chilling effect would be extensive and immediate – using the purse of owners.

I have been a victim of a defamation action- the first legal action of my life (Olympia v Kosor). It was 5years, A Neveda Supreme Court ruling, and nearly 7 figures in attorney fees, even when invoking Nevada’s anti-SLAPP law. While the developer lost its battle with me (the Court finding the action “quintessential SLAPP”), the developer and his appointed board won the war. My neighbors dare not benext. But they did subsequently elect me to represent them. I am a retired USAF Colonel and fighter pilot, with combat experience in the first Gulf War. This experience, defending the attacks by thisdeveloper on my family’s financial future, was in total the most stressful experience of my life.

I am uncertain as to the viability of the Division (or Commission) protecting the fundamental right of free speech and to perform the needed due process of law, censorship of communications in social media,work place violence, civil disobedience, etc., this bill could levy on it. Do you really want the Division orvolunteer directors susceptible to the influence of mangers and declarants involved here?

A second anti-transparency effort of the bill is it seeks to charge “actual” cost to inspect documents. Allcommunity managers are paid to provide the record keeping services for the association as part of theirbase fee. Any cost incurred in providing that service they are already made whole. Sec 1 of this billallowing for the “actual” (undefined and arbitrary) payment, is a doubling of the payment. It is inconsistent with other regulated charging for record inspections, will demand even moreassociation policies, and is totally inappropriate. This is simply, at best, a windfall subsidy to communitymanagers at the expense of the homeowners with a right to access community records. Ormore likely, it provides an ugly tool for association or managing agents so inclined to use cost barriers to chill transparency.

Sec 4 weaponizes the NRED complaint process to remove and ban “abusers” for up to 10 years fromserving on a board for a little as filing a “misleading” complaint (among other not well-defined offenses).

If “misleading” was a punishable standard for attorney’s filing civil litigation, we would most likely have a server shortage of litigators. In any case, in comparison, a convict out of probations can run for public office after only 4 years.

Sec 5 phrasing is nonsensical and adds ambiguity. An allegation of a violation is by definition a violationunder the condition of the hypothesis -“assuming it is true”. It would add an extra step to the complaint process and would take an already flawed complaint process, where the Division is not accountable forits decisions. It would make the process even more opaque, permitting a case closure at the outset before the Ombudsman is involved. Denying owners accesses to a Commission hearing leaves owners no recourse but costly litigation, where deep pockets and “influencers” have a huge advantage.

Lastly, had the CIC Task Force, specifically enacted by 2019 legislation to better bring HOAlaw changes for approval, been used as intended (not completely void for over 2 1/2 years) much if not all could have been avoided.

This is a bad bill all around. Please, do not pass.

Michael Kosor, Colonel, USAF Ret.Director, Southern Highlands Community AssociationMikekosor.com

HOA homeowners, protect your rights! Stop SB 417.

Contact your State representatives to oppose SB 417.

Link to contact info for the Nevada Legislators.