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1. What does NORA stand for? NORA stands for New Owner RESERVE ASSESSMENT.
2. When will the Ballots for the NORA vote be sent out to each of the Owners? The goal is to send the Ballots out in the middle of July 2024. The ballot packet will be mailed to every owner (one ballot per household), at the address on file that the Owner has designated to receive their mail at. Along with the ballot, there will be a prepaid addressed envelope for each Owner to return their ballot in.
3. When will the ballots have to be returned by? The Election Committee will set an election date that the ballots need to be returned by. However, if the ballots needed to pass or fail the initiative have not been received, the Board can extend the election day until such a time the initiative passes or fails.
4. Why is it important that all Current Owners cast their vote on the NORA amendment? There are 7,781 homes in Sun City Summerlin. It will take a 5,214 (67%) “yes” vote to pass the NORA or 2,568 (33%) “no” votes to defeat the NORA amendment.
5. What if people do not vote? Since this vote is for the amendment of the current governing documents, it means that if 5,214 yes votes are NOT received, then the ballot initiative to amend fails. This means that any vote not cast ultimately represents a vote against the amendment,
6. If someone casts their vote and returns it, and later decides they want to change their vote, can they? No, votes cannot be changed once they have been submitted. That is why we are encouraging everyone to do their research, attend Town Halls and other meetings and make sure they understand the NORA before casting their ballot.
7. Why is this called an amendment to the governing documents? The NORA was adopted and has been in place since January 2005, a little over nineteen (19) years. Anyone who purchased a home in Sun City Summerlin in the last 19 ½ years paid a NORA fee as part of their escrow or closing fees. It was charged to you as the Buyer.
8. What is the NORA fee now? As of July 1, 2024, the NORA fee will be $1,913.24.
9. How many homes sell in SCSCA in a year that are subject to NORA? On an average there are 500 home sales a year that pay the NORA.
10. When I pass away does the person(s) I leave my home to have to pay the NORA? There are several exceptions to the NORA requirement. We encourage you to give Section 15 of the CC&R’s to your attorney or estate planner, so they can properly word your wishes to pass your SCSCA home to others. Most typical exceptions of the requirement to pay the NORA are transfers to your spouse or descendants by Joint Tenancy, Will or Trust or to any Entity in which the Owner(s) or their descendants maintain a majority beneficial interest, including transfers to an irrevocable living trust.
11. If I sale my existing home in SCSCA that I live in as my primary residence and buy another home in SCSCA to live in as my primary residence, do I have to pay the NORA on the new home I am purchasing? If you purchase a home in SCSCA as your primary residence within 180 days of selling your previous primary residence in SCSCA you will be exempt from the NORA fee on your new home, and although it will have been collected at Escrow, SCSCAI will refund it to you.
12. What are NORA funds used for? NORA funds are deposited in the Association Reserve Fund account. The Reserve Fund account is a savings account for scheduled, routine, and unscheduled, major repairs or replacements of the vital components of SCSCAI. The reserve fund is required by Nevada state law, and provides the financial resource to maintain, repair, and upgrade the shared assets of the community. NORA funds are never used for Operating expenses or New Capital Expenses.
13. Who prepares the Reserve Study? In the state of Nevada, it is required that the Reserve Study be prepared by a professional reserve analyst or consulting firm that specializes in reserves studies and is registered with the State of Nevada per the requirements of NRS 116. SCSCAI uses professionals that are Certified Reserve Analysts (CRAs).
14. How often is a Reserve Study Required? In the State of Nevada, it is required that a Reserve Study is done every five (5) years. However, recently, leaders in the community association industry have found that five (5) years may not be often enough due to unforeseen items, cost of living increases, minimum wage increases, and other factors outside of the Board of Directors control and the SCSCA Board of Directors has opted to do annual updates.
15. Who is responsible to pay the NORA and when is it paid? Only the BUYER is required to pay the NORA, and it is not paid until the day the Buyer closes on the home. The NORA is collected at closing and then forwarded to SCSCAI by the escrow company or attorney handling the closing. On rare occasions, when there is a private sale where the Owner sells direct to a Buyer, and the Seller fails to collect the NORA, SCSCAI collects the amount from the Buyer after we receive the deed and prior to issuing the Buyer a membership card to use the facilities.
16. At the time of sale can a Seller and Buyer negotiate who pays the NORA? Like the sales price of the home, commissions and closing costs, sellers can negotiate with the buyer all costs and fees associated with the sale of their home. This is an escrow and closing issue between the seller and the buyer, and not something that SCSCA is involved in. SCSCA gets payment directly from the escrow company or attorney handling the closing.
17. Do “flippers” have to pay the NORA? A “flipper” is a term used for an investor who buys a home, renovates, or remodels it, and then quickly sells the home for a profit. In most cases these homes are sold for a much higher price than they “flipper” paid for it. Flippers pay the NORA when they purchase the home and then when they sale the home, the New Owner pays the NORA when they buy the home from the flipper.
18. Do investors who have rental homes pay the NORA? When anyone buys a home in SCSCA at that time they are deemed a New Owner as of closing of escrow. It does not matter if the home is purchased by individuals, a trust, entity, investor or if they are going to live in the home or not, they are charged the NORA.
19. If the amendment passes will Current Owners be assessed the NORA? No, the NORA is not assessed until a home is sold and it is assessed to the New Owner.
20. What is the current balance in our Reserve Fund? The balance changes as we make deposits, earn interest, and replace or repair components. The balance in the reserve fund for this fiscal year that ends June 30, 2024, is estimated to be at $17 million.
21. To get to the 70% reserve funding by June 30, 2029, how much funding is needed? Assuming that the 2024 Reserve Study is correct, $30 million in our reserve account would be deemed 70% or adequately funded.
22. Where do the funds for the reserve fund come from? Funds for the reserve fund come from these sources.
A. Current Owners Assessment: A portion of your annual assessment is deposited into the reserve fund. Effective July 1, 2024, the annual assessment for each home is $2,487.72. Of the $2,487.72, $229.80 goes to the reserve fund.
B. Investment Income: The reserve funds are invested in insured CD’s and Money Markets, and we earn approximately $700,000.00 in interest annually.
C. NORA Revenue: The New Owner of each home sold pays the NORA fee. We estimate 500 home sales a year. Using fiscal year ending June 30, 2025, as an example, 500 home sales at the current rate of $1,913.24 will generate $956,620.00. If the amendment passes, 500 home sales at $5,000 will generate $2,500,000.
23. Can you simplify the reason the Board wants to increase the NORA? Yes. Using the model from above. In 2024 we estimate that at the current NORA fee of $1,913.24 we will generate revenue into the Reserve Fund of $956,620.00 for the fiscal year ending June 30, 2025. However, if the NORA Amendment was already passed and in place, we would generate revenue into the Reserve Fund of $2,500,000.00. This is a difference of $1,543,380.00 a year. This is over $1.5 million dollars in just one year that we do not have to assess to our 7,781 Current Owners to add funding to the Reserve Fund.
24. Do other HOA’s charge a NORA fee? If their governing documents allow it, other HOA’s can charge a fee to new buyers when they purchase within the community. The most common names for this type of charge are “initial fee”, “buy-in fee”, “common area preservation fee” or “capital improvement fee”, we happen to call ours a “New Owner Replacement Assessment”. Regardless of what the fee is called, when a new owner purchases a property in the HOA, this one-time payment is charged in order to make a contribution to a specified fund. In our case, the specified fund is the Reserve Fund.
25. What is a New Owner Reserve Assessment (NORA)? A NORA is an assessment used by homeowners’ associations to assess new owners for a share of the responsibility for maintaining and replacing the assets of the common areas, buildings, and amenities. These shared expenses for the preservation and enhancement of the common areas, buildings, and amenities are continually funded through the annual fees paid by each owner, the purpose of the NORA is to ensure the buyer (new owner) contributes to the Reserve Fund from the moment they take ownership.
26. Why does the NORA dollar amount need to be raised? The reserve fund is a debt to the Association that all Owners are required to pay. While it is often referred to as a contribution, it is actually an obligation. The purpose of the NORA is for New Owners to contribute a designated amount of money to cover their share of the association’s expenses or obligation to the Reserve Fund and to contribute an amount that is sufficient to assist in the building up of the Reserve Fund.
27. Why does the CPI need to be added to the NORA? The Consumer Price Index (CPI) measures the average change in prices of goods and services. If the Association fees do not keep up with the CPI, then funds collected will not keep up with the changes in the prices of the goods and services we use. Changes in the CPI have significant impact on the Associations saving and spending strategies and also align with the economic environment.
28. Why is the Reserve Fund underfunded? While not popular to state, inflation has had a significant impact on all HOA’s in the last four years. Labor costs and material and supply costs have risen drastically from before COVID. You probably experience this in your own home. All of the items in our Reserve Fund are impacted by this. For example, an item as simple as a split system air conditioner has increased 20% (without labor for installation) since 2019. The things that have contributed to this increase is (a) inflation (b) changes in raw material costs (c) advances in technology features (d) government regulations and energy efficiency standards and (e) shipping (fuel related) costs. The reserve fund is underfunded due to changes in the economy based on numerous factors over the last four to five years.
29. Will every buyer pay the same amount to NORA to purchase a home here? Yes, New Owner Reserve Assessments are almost always based on the owner’s percentage of ownership in the community. In Sun City Summerlin all Owners own equally.
30. What is the HOA Reserve Fund used for? Like all HOA Reserve Funds, these are funds set aside by the HOA to pay for future repairs, maintenance and replacement of common areas, facilities, and amenities. The Reserve Fund is currently funded through a portion of the annual dues you pay, the NORA fees paid by new buyers and interest earned on investment of the Reserve Fund monies. The purpose of the Reserve Fund is to have funds set aside to cover the necessary repairs, maintenance and replacement of the components that make up our common areas, facilities and amenities.
31. Why don’t we just stop spending from the Reserve Fund? (a)The reserve fund is intended to cover major repairs and replacements of the components of the Association. (b) If a component needs to be repaired or replaced the Association has a responsibility to use the reserve fund to make the repair or replacement. Also, making repairs or doing maintenance when needed can prevent more costly problems, repairs, and replacements in the future. and (c) Your property values, along with your enjoyment of living in Sun City Summerlin are enhanced significantly when the common areas, facilities and amenities are well maintained and not out-of-order or unavailable because of needed repair and maintenance.
32. If the NORA vote does not pass and a Special Assessment is needed, can a Special Assessment be assessed to only those Current Owners who voted NO? No, if it was deemed a Special Reserve Assessment was needed to assist in funding the Reserve Fund it would be assessed to all Current Owners equally.
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