Henderson’s Somerset Park residents face financial burden after emergency water system repairs
A year-long water crisis reaches its financial climax as condo owners prepare for mandatory tax lien payments
The residents of Somerset Park, an 85-unit condominium complex in Henderson, are now confronting the financial aftermath of a water infrastructure crisis that has plagued their community for nearly a year. After the City of Henderson stepped in to perform emergency repairs on the property’s failing water system, homeowners are facing a difficult choice: pay substantial fees or deal with tax liens on their properties.
The payment plan reality
Starting this August, Somerset Park residents who couldn’t pay the full repair assessment upfront will begin making eight monthly payments of $1,003.37 each, continuing through March 2027. The city had originally offered residents the option to pay the full amount of $8,026.99 by March 31, 2025, to avoid having a tax lien placed on their property. However, many residents were unable to meet this deadline, leaving them with no choice but to enter the extended payment plan with the lien in place.
The financial strain is evident among the community members. Alexis McKee, who moved to Somerset Park in May 2024, acknowledged the burden: “It’s a lot, and I don’t blame anyone for struggling with that.” Kenny Kester, a resident since 2018, described the situation as “very, very tough.”
Both McKee and Kester managed to pay the full amount to avoid the lien, but not without significant personal sacrifice. Kester had to sell his two motorcycles to cover the cost, while McKee depleted her savings account and is still working to rebuild her financial reserves.
A crisis that could have been worse
Despite the substantial financial burden on residents, the city’s intervention actually saved the community from an even more devastating expense. The City of Henderson’s total repair cost of $682,293.74 was approximately half of what the homeowners association’s proposed solution would have cost. In September, HOA board members and state lawmakers who owned units in the complex reported that the cheapest repair estimate they had received was $1.2 million.
The city’s emergency replacement of the water system came after months of deteriorating conditions that included persistent water leaks and dangerous sinkholes throughout the property. The situation had become so severe that municipal intervention was necessary to ensure the safety and habitability of the complex.
The root of the problem: HOA mismanagement
The Somerset Park water crisis didn’t happen overnight. The underlying issues trace back to serious problems with the property’s homeowners association management. The complex’s former HOA manager, Diana Stegeman, had her certificate suspended after documents from the Nevada Real Estate Division revealed she had forged checks at a previous development she managed.
State lawmakers associated with the Somerset Park property later provided evidence that Stegeman had engaged in similar fraudulent activities at their complex as well. This mismanagement left the HOA without the necessary funds to address the deteriorating water infrastructure, ultimately leading to the emergency situation that required city intervention.
Understanding Nevada’s reserve fund requirements
Las Vegas HOA attorney Bruce Flammey explains that Nevada law specifically addresses these types of situations through comprehensive reserve fund requirements detailed in Nevada Revised Statutes Chapter 116. The law mandates that HOAs maintain what’s essentially a “forced savings account” called a reserve fund.
According to NRS 116.31152, 116.3102, 116.3115, and 116.31151, this reserve fund must contain sufficient money to cover all future repairs of common areas, including landscaping, sidewalks, roadways, plumbing, and other shared infrastructure elements.
“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 explained.
Legal requirements and oversight
Nevada law requires HOA boards to have common areas professionally inspected every five years to evaluate the remaining lifespan of various infrastructure elements. This assessment helps boards budget appropriately for future repairs and maintenance needs.
The board must then review these study results annually to determine if reserve funds are adequate. If they’re insufficient, the board is required to increase HOA fees to build up reserves or reallocate funds to ensure all necessary repairs can be covered when needed.
Additionally, HOA boards must provide detailed budget breakdowns showing how much money is allocated for each type of repair, including projections for inflation and compound interest on reserve funds. This transparency allows residents to understand where their money is going and what future costs they might face.
Protecting your community
For residents in other HOA communities throughout the Las Vegas Valley, the Somerset Park situation serves as a cautionary tale. Flammey advises that if your HOA or management company isn’t following all the requirements outlined in NRS Chapter 116, residents have several options:
They can run for the HOA board themselves to implement proper management practices, petition to remove board members who aren’t fulfilling their duties, or take legal action against those responsible for mismanagement. The goal is to prevent other communities from experiencing similar crises.
Looking forward
As Somerset Park residents begin their payment schedules this August, their situation highlights the critical importance of proper HOA management and adherence to state regulations. The community’s experience demonstrates how quickly infrastructure problems can escalate when reserve funds are mismanaged or depleted through fraudulent activity.
The city’s intervention, while costly for residents, ultimately provided a solution that was more affordable than private alternatives. However, the financial burden on individual homeowners remains substantial, with many residents having to make significant personal sacrifices to meet their obligations.
For the broader Henderson and Las Vegas communities, the Somerset Park case underscores the need for vigilant oversight of HOA management and the importance of understanding the legal protections available to homeowners under Nevada law.
Image Source: https://www.ktnv.com/news/somerset-park-residents-preparing-for-tax-lien-payments-after-city-repairs-broken-water-system
Category: Local News, Real Estate, Business
Subcategory: Community News
Date: 06/27/2025
