EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

1-1 Section 1. Chapter 116 of NRS is hereby amended by adding thereto

1-5 section 8 of this act.

1-6 Sec. 3. 1. Except as otherwise provided in subsection 2 and unless

1-7 the declaration of a common-interest community imposes more stringent

1-8 standards, the executive board of an association shall, not less than 30

1-9 days or more than 60 days before the beginning of the fiscal year of the

1-10 association, prepare and distribute to each unit’s owner a copy of:

2-1 (a) The budget for the daily operation of the association. The budget

2-2 must include, without limitation, the estimated annual revenue and

2-3 expenditures of the association and any contributions to be made to the

2-4 reserve account of the association.

2-5 (b) The budget to maintain the reserve required by paragraph (b) of

2-6 subsection 2 of NRS 116.3115. The budget must include, without

2-7 limitation:

2-8 (1) The current estimated replacement cost, estimated remaining

2-9 life and estimated useful life of each major component of the common

2-10 elements;

2-11 (2) As of the end of the fiscal year for which the budget is prepared,

2-12 the current estimate of the amount of cash reserves that are necessary,

2-13 and the current amount of accumulated cash reserves that are set aside,

2-14 to repair, replace, restore or maintain the major components of the

2-15 common elements;

2-16 (3) A statement as to whether the executive board has determined or

2-17 anticipates that the levy of one or more special assessments will be

2-18 required to repair, replace, restore or maintain any major component of

2-19 the common elements or to provide adequate reserves for that purpose;

2-20 and

2-21 (4) A general statement describing the procedures used for the

2-22 estimation and accumulation of cash reserves pursuant to subparagraph

2-23 (2), including, without limitation, the qualifications of the person

2-24 responsible for the preparation of the study required by section 4 of this

2-25 act.

2-26 2. In lieu of distributing copies of the budgets of the association

2-27 required by subsection 1, the executive board may distribute to each

2-28 unit’s owner a summary of those budgets, accompanied by a written

2-29 notice that the budgets are available for review at the business office of

2-30 the association or other suitable location and that copies of the budgets

2-31 will be provided upon request.

2-32 Sec. 4. 1. The executive board of an association shall:

2-33 (a) Cause to be conducted at least once every 3 years, a study of the

2-34 reserves required to repair, replace, restore and maintain the major

2-35 components of the common elements;

2-36 (b) Review the results of that study at least annually to determine if

2-37 those reserves are sufficient; and

2-38 (c) Make any adjustments it deems necessary to maintain the required

2-39 reserves.

2-40 2. The study required by subsection 1 must be conducted by a person

2-41 qualified by training and experience to conduct such a study and must

2-42 include, without limitation:

3-1 (a) A summary of an inspection of the major components of the

3-2 common elements the association is obligated to repair, replace, restore

3-3 or maintain;

3-4 (b) An identification of the major components of the common

3-5 elements that the association is obligated to repair, replace, restore or

3-6 maintain which have a remaining useful life of less than 30 years;

3-7 (c) An estimate of the remaining useful life of each major component

3-8 identified pursuant to paragraph (b);

3-9 (d) An estimate of the cost of repair, replacement, restoration or

3-10 maintenance of each major component identified pursuant to paragraph

3-11 (b) during and at the end of its useful life; and

3-12 (e) An estimate of the total annual assessment that may be required to

3-13 cover the cost of repairing, replacing, restoring or maintaining the major

3-14 components identified pursuant to paragraph (b), after subtracting the

3-15 reserves of the association as of the date of the study.

3-16 Sec. 5. 1. Except as otherwise provided in subsection 2, money in

3-17 the reserve account of an association may not be withdrawn without the

3-18 signatures of at least two members of the executive board or the

3-19 signatures of at least one member of the executive board and one officer

3-20 of the association who is not a member of the executive board.

3-21 2. The executive board may temporarily transfer money in the

3-22 reserve account of the association to the association’s general operating

3-23 account if the executive board has made and recorded in the minutes of

3-24 one of its meetings a written finding that unforeseen circumstances exist

3-25 which require the expenditure of the reserves to protect the health, safety

3-26 and welfare of the units’ owners. The finding must indicate how and

3-27 when the money so transferred will be repaid to the reserve account. The

3-28 money so transferred must be repaid to the reserve account within 1 year

3-29 after the date on which it was transferred.

3-30 3. The executive board shall collect a special assessment if required

3-31 to repay the money so transferred within the time required by this

3-32 section, regardless of any provisions to the contrary that may be

3-33 contained in the governing documents of the association prohibiting

3-34 such an assessment. If such a special assessment is collected, the board

3-35 may grant an extension to any unit’s owner who is unable to pay the

3-36 special assessment by the date on which it becomes due. The granting of

3-37 such an extension does not prohibit the executive board from pursuing

3-38 any remedies available to the board to collect the unpaid special

3-39 assessment.

3-40 Sec. 6. 1. A meeting of the executive board of an association must

3-41 be held at least once every 90 days.

3-42 2. Except in an emergency or unless the bylaws of an association

3-43 require a longer period of notice, the secretary or other officer specified

4-1 in the bylaws of the association shall, not less than 10 days before the

4-2 date of a meeting of the executive board, cause notice of the meeting to

4-3 be given to the units’ owners. Such notice may be:

4-4 (a) Hand-delivered or sent prepaid by United States mail to the

4-5 mailing address of each unit within the common-interest community; or

4-6 (b) If the bylaws of the association do not require the notice to be

4-7 given in accordance with paragraph (a):

4-8 (1) Posted in a prominent place or places within the common

4-9 elements of the association; or

4-10 (2) Published in a newsletter or other similar publication that is

4-11 circulated to each unit’s owner.

4-12 3. The notice of a meeting of the executive board of an association

4-13 must comply with the provisions of subsection 2 of NRS 116.3108.

4-14 4. The agenda of a meeting of the executive board of an association

4-15 must comply with the provisions of subsection 3 of NRS 116.3108. In an

4-16 emergency, the executive board may take action on an item which is not

4-17 listed on the agenda as an item on which action may be taken.

4-18 5. At a meeting of the executive board, unless the declaration or

4-19 bylaws of the association impose more stringent standards, the executive

4-20 board shall review:

4-21 (a) A current reconciliation of the operating account of the

4-22 association;

4-23 (b) A current reconciliation of the reserve account of the association;

4-24 (c) The actual revenues and expenses for the reserve account,

4-25 compared to the budget for that account for the current year;

4-26 (d) The latest account statements prepared by the financial institutions

4-27 in which the accounts of the association are maintained;

4-28 (e) An income and expense statement, prepared on at least a quarterly

4-29 basis, for the operating and reserve accounts of the association; and

4-30 (f) The current status of any civil action or claim before the

4-31 commission in which the association is a party.

4-32 6. The minutes of a meeting of the executive board of an association

4-33 must be made available to the units’ owners in accordance with the

4-34 provisions of subsection 5 of NRS 116.3108.

4-35 7. As used in this section, "emergency" means any occurrence or

4-36 combination of occurrences that could not have been reasonably

4-37 foreseen, which requires the immediate attention of, and possible action

4-38 by, the executive board and which makes it impracticable to comply with

4-39 the provisions of subsection 2 or 4.

4-40 Sec. 7. 1. Each association shall, at the time it pays the fee

4-41 required by NRS 116.31155, register with the ombudsman for owners in

4-42 common-interest communities on a form prescribed by the ombudsman.

4-43 2. The form for registration must include, without limitation:

5-1 (a) The name of the association;

5-2 (b) The name of the person engaged in property management for the

5-3 common-interest community;

5-4 (c) The date on which the common-interest community was created;

5-5 (d) The names of the members of the executive board of the

5-6 association; and

5-7 (e) The date of the most recent study of the reserves of the association

5-8 required by section 4 of this act.

5-9 Sec. 8. 1. There is hereby created within the office of the

5-10 ombudsman for owners in common-interest communities the commission

5-11 for the resolution of disputes related to common-interest communities, to

5-12 be composed of three members as follows:

5-13 (a) One member who is a hearing officer for the office of the

5-14 ombudsman for owners in common-interest communities; and

5-15 (b) Two members who are units’ owners selected by the ombudsman.

5-16 2. The members of the commission serve without compensation,

5-17 except that while engaged in the business of the commission, the hearing

5-18 officer is entitled to the per diem allowance and travel expenses provided

5-19 for state officers and employees generally.

5-20 3. After the initial terms, the term of each member of the commission

5-21 is 3 years. If a person is appointed to fill the unexpired term of a member

5-22 which is more than 2 years, he shall be deemed to have served a full

5-23 term.

5-24 4. A member of the commission selected pursuant to paragraph (b)

5-25 of subsection 1 may be removed by the ombudsman for good cause, and

5-26 the ombudsman shall appoint a person qualified to replace the member

5-27 for the remainder of the unexpired term.

5-28 5. The hearing officer shall preside at any hearing conducted by the

5-29 commission in the discharge of its duties.

5-30 Sec. 9. 1. A unit’s owner who has a claim relating to:

5-31 (a) The interpretation, application or enforcement of any covenants,

5-32 conditions or restrictions applicable to residential property or any bylaws,

5-33 rules or regulations adopted by an association; or

5-34 (b) The procedures used for increasing, decreasing or imposing

5-35 additional assessments upon residential property,

5-36 may file a written claim with the commission. The ombudsman for

5-37 owners in common-interest communities shall provide, without cost, the

5-38 forms necessary to file such a claim to any unit’s owner upon request. No

5-39 such claim may be submitted unless the unit’s owner has complied with

5-40 all administrative procedures specified in any covenants, conditions or

5-41 restrictions applicable to the property or in any bylaws, rules and

5-42 regulations of the association.

5-43 2. The claim must include:

6-1 (a) The complete names, addresses and telephone numbers of all

6-2 parties to the claim;

6-3 (b) A specific statement of the nature of the claim; and

6-4 (c) Such other information as may be required by the ombudsman for

6-5 owners in common-interest communities.

6-6 3. The written claim must be accompanied by a fee of $35.

6-7 4. Upon the filing of a claim pursuant to subsection 1, the claimant

6-8 shall serve a copy of the claim in the manner prescribed in Rule 4 of the

6-9 Nevada Rules of Civil Procedure for the service of a summons and

6-10 complaint. The person upon whom a copy of the written claim is served

6-11 shall, within the time established by the ombudsman for owners in

6-12 common-interest communities, but not less than 30 days or more than 60

6-13 days after service of the claim, file a written answer with the commission.

6-14 The answer must be accompanied by a fee of $35.

6-15 5. A civil action based upon such a claim may be commenced in any

6-16 court in this state unless the claim has been submitted to the commission

6-17 pursuant to this section.

6-18 Sec. 10. 1. Upon the receipt of a written claim pursuant to section

6-19 9 of this act, the commission shall:

6-20 (a) Set a date for a hearing on the claim within a time established by

6-21 the ombudsman for owners in common-interest communities;

6-22 (b) Give notice of the hearing to all interested parties in the manner

6-23 required by the ombudsman;

6-24 (c) Conduct the hearing as expeditiously as possible; and

6-25 (d) Render its decision in the form and manner prescribed by the

6-26 ombudsman.

6-27 2. A person who is aggrieved by a decision of the commission

6-28 relating to a written claim may petition for judicial review in the manner

6-29 provided in chapter 233B of NRS.

6-30 3. If a party who petitions for judicial review fails to obtain a more

6-31 favorable award or judgment than that which was rendered by the

6-32 commission, the court shall award to the opposing party court costs and

6-33 reasonable attorney’s fees incurred by the opposing party related to the

6-34 claim.

6-35 Sec. 11. 1. The ombudsman for owners in common-interest

6-36 communities shall administer the provisions of sections 8, 9 and 10 of

6-37 this act, and may adopt such regulations as are necessary to carry out

6-38 those provisions. The ombudsman shall adopt rules of practice, setting

6-39 forth the nature and requirements of all formal and informal procedures

6-40 used by the commission in the discharge of its duties.

6-41 2. All fees collected by the ombudsman pursuant to the provisions of

6-42 section 9 of this act must be:

7-1 (a) Deposited in the account for the ombudsman for owners in

7-2 common-interest communities;

7-3 (b) Accounted for separately in that account; and

7-4 (c) Used to administer the provisions of sections 8, 9 and 10 of this

7-5 act.

7-6 Sec. 12. If any change is made to the governing documents of an

7-7 association, the secretary or other officer specified in the bylaws of the

7-8 association shall, within 14 days after the change is made, prepare and

7-9 cause to be hand-delivered or sent prepaid by United States mail to the

7-10 mailing address of each unit or to any other mailing address designated

7-11 in writing by the unit’s owner, a copy of the change that was made.

7-12 Sec. 13. 1. The executive board of an association shall maintain

7-13 and make available for review at the business office of the association or

7-14 other suitable location:

7-15 (a) The financial statement of the association;

7-16 (b) The budgets of the association required to be prepared pursuant to

7-17 section 3 of this act; and

7-18 (c) The study of the reserves of the association required to be

7-19 conducted pursuant to section 4 of this act.

7-20 2. The executive board shall provide a copy of any of the records

7-21 required to be maintained pursuant to subsection 1 to a unit’s owner

7-22 within 14 days after receiving a request therefor. The executive board

7-23 may charge a fee to cover the actual costs of preparing a copy, but not to

7-24 exceed 25 cents per page.

7-25 Sec. 14. NRS 116.1116 is hereby amended to read as follows:

7-26 116.1116 1. The office of the ombudsman for owners in common-

7-43 materials related to those rights and responsibilities; [and]

8-1 (c) Assist persons appointed or elected to serve on executive boards of

8-2 associations to carry out their duties [.] ; and

8-3 (d) Compile and maintain a data base of the governing documents of

8-4 each association organized within this state. At the request of the

8-5 ombudsman, an association shall provide such information as is

8-6 necessary for the ombudsman to maintain the data base. The data base

8-7 must be:

8-8 (1) Maintained in such a format to ensure that information in the

8-9 data base is easily assessable and can be easily understood;

8-10 (2) Revised annually; and

8-11 (3) Available for use by members of the general public.

8-12 Sec. 15. NRS 116.1117 is hereby amended to read as follows:

8-13 116.1117 1. There is hereby created the account for the ombudsman

8-24 interest communities.

8-25 Sec. 16. NRS 116.1201 is hereby amended to read as follows:

8-26 116.1201 1. Except as otherwise provided in [NRS 116.1202 and

8-37 common-interest communities . [created on or after January 1, 1992.]

8-38 Sec. 17. NRS 116.3102 is hereby amended to read as follows:

8-39 116.3102 1. Except as otherwise provided in subsection 2, and

8-43 and collect assessments for common expenses from units’ owners;

9-1 (c) Hire and discharge managing agents and other employees, agents

9-2 and independent contractors;

9-3 (d) Institute, defend or intervene in litigation or administrative

9-4 proceedings in its own name on behalf of itself or two or more units’

9-5 owners on matters affecting the common-interest community;

9-6 (e) Make contracts and incur liabilities;

9-7 (f) Regulate the use, maintenance, repair, replacement and modification

9-8 of common elements;

9-9 (g) Cause additional improvements to be made as a part of the common

9-10 elements;

9-11 (h) Acquire, hold, encumber and convey in its own name any right, title

9-12 or interest to real estate or personal property, but:

9-13 (1) Common elements in a condominium or planned community may

9-14 be conveyed or subjected to a security interest only pursuant to NRS

9-15 116.3112; and

9-16 (2) Part of a cooperative may be conveyed, or all or part of a

9-17 cooperative may be subjected to a security interest, only pursuant to NRS

9-18 116.3112;

9-19 (i) Grant easements, leases, licenses and concessions through or over the

9-20 common elements;

9-21 (j) Impose and receive any payments, fees or charges for the use, rental

9-22 or operation of the common elements, other than limited common elements

9-23 described in subsections 2 and 4 of NRS 116.2102, and for services

9-24 provided to units’ owners;

9-25 (k) Impose charges for late payment of assessments and, except as

9-26 otherwise provided in NRS 116.31031, after notice and an opportunity to

9-27 be heard, levy reasonable fines for violations of the declaration, bylaws,

9-28 rules and regulations of the association;

9-29 (l) Impose reasonable charges for the preparation and recordation of

9-30 amendments to the declaration, the information required by NRS 116.4109

9-31 or statements of unpaid assessments;

9-32 (m) Provide for the indemnification of its officers and executive board

9-33 and maintain directors’ and officers’ liability insurance;

9-34 (n) Assign its right to future income, including the right to receive

9-35 assessments for common expenses, but only to the extent the declaration

9-36 expressly so provides;

9-37 (o) Exercise any other powers conferred by the declaration or bylaws;

9-38 (p) Exercise all other powers that may be exercised in this state by legal

9-39 entities of the same type as the association;

9-40 (q) Direct the removal of vehicles improperly parked on property owned

9-41 or leased by the association, pursuant to NRS 487.038; and

9-42 (r) Exercise any other powers necessary and proper for the governance

9-43 and operation of the association.

10-1 2. The declaration may not impose limitations on the power of the

10-2 association to deal with the declarant which are more restrictive than the

10-3 limitations imposed on the power of the association to deal with other

10-4 persons.

10-5 Sec. 18. NRS 116.31031 is hereby amended to read as follows:

10-6 116.31031 1. If a unit’s owner, or a tenant or guest of a unit’s owner,

10-33 subsection 6 of NRS 116.31065.

10-34 Sec. 19. NRS 116.31034 is hereby amended to read as follows:

10-35 116.31034 1. Except as otherwise provided in subsection 5 of NRS

10-42 (a) The terms of office of the members of the executive board; and

11-1 (b) The month during which elections for the members of the

11-2 executive board must be held.

11-3 3. An officer, employee, agent or director of a corporate owner of a

11-4 unit, a trustee or designated beneficiary of a trust that owns a unit, a partner

11-5 of a partnership that owns a unit, and a fiduciary of an estate that owns a

11-6 unit may be an officer or member of the executive board. In all events

11-7 where the person serving or offering to serve as an officer or member of the

11-8 executive board is not the record owner, he shall file proof [of authority] in

11-9 the records of the association [.

11-10 3.] that:

11-11 (a) He is associated with the corporate owner, trust, partnership or

11-12 estate as required by this subsection; and

11-13 (b) Identifies the unit or units owned by the corporate owner, trust

11-14 partnership or estate.

11-15 4. The election of any member of the executive board must be

11-16 conducted by secret written ballot. The secretary or other officer specified

11-17 in the bylaws of the association shall cause to be sent prepaid by United

11-18 States mail to the mailing address of each unit within the common-

11-19 interest community or to any other mailing address designated in writing

11-20 by the unit’s owner, a secret ballot and a return envelope. The governing

11-21 documents of the association must set forth the manner for counting the

11-22 ballots cast.

11-23 5. Each member of the executive board shall, [at the time of] within 30

11-24 days after his appointment or election, certify in writing that he has read

11-25 and understands the governing documents of the association and the

11-26 provisions of this chapter [.] to the best of his ability.

11-27 Sec. 20. NRS 116.31036 is hereby amended to read as follows:

11-28 116.31036 1. Notwithstanding any provision of the declaration or

11-43 the cost of defense, and may recover costs already expended from the

12-1 member of the executive board who so acted. Members of the executive

12-2 board are not personally liable to the victims of crimes occurring on the

12-3 property. Punitive damages may not be recovered against the association,

12-4 but may be recovered from persons whose activity gave rise to the

12-5 damages.

12-6 Sec. 21. NRS 116.31038 is hereby amended to read as follows:

12-7 116.31038 Within 30 days after units’ owners other than the declarant

12-42 community other than units in a planned community.

13-1 [8.] 9. Any renewable permits and approvals issued by governmental

13-2 bodies applicable to the common-interest community which are in force

13-3 and any other permits and approvals so issued and applicable which are

13-4 required by law to be kept on the premises of the community.

13-5 [9.] 10. Written warranties of the contractor, subcontractors, suppliers

13-6 and manufacturers that are still effective.

13-7 [10.] 11. A roster of owners and mortgagees of units and their

13-8 addresses and telephone numbers, if known, as shown on the declarant’s

13-9 records.

13-10 [11.] 12. Contracts of employment in which the association is a

13-11 contracting party.

13-12 [12.] 13. Any contract for service in which the association is a

13-13 contracting party or in which the association or the units’ owners have any

13-14 obligation to pay a fee to the persons performing the services.

13-15 Sec. 22. NRS 116.31065 is hereby amended to read as follows:

13-16 116.31065 The rules adopted by an association:

13-36 amendment to the rule.

13-37 Sec. 23. NRS 116.3108 is hereby amended to read as follows:

13-38 116.3108 1. A meeting of the units’ owners of an association must be

13-43 specified in the bylaws, of the votes in the association.

14-1 2. Not less than 10 nor more than 60 days in advance of any meeting [,]

14-2 of the units’ owners of an association, the secretary or other officer

14-3 specified in the bylaws shall cause notice of the meeting to be

14-4 hand-delivered or sent prepaid by United States mail to the mailing address

14-5 of each unit or to any other mailing address designated in writing by the

14-6 unit’s owner. The notice of [any] the meeting must state the time and place

14-7 of the meeting and include a copy of the agenda for the meeting. The notice

14-8 must include notification of the right of a unit’s owner to:

14-9 (a) Have a copy of the minutes or a summary of the minutes of the

14-10 meeting distributed to him upon request [if he pays] and, if required by the

14-11 executive board, upon payment to the association of the cost of making the

14-12 distribution.

14-13 (b) Speak to the association or executive board, unless the executive

14-14 board is meeting in executive session.

14-15 3. The agenda for [the] a meeting of the units’ owners must consist of:

14-16 (a) A clear and complete statement of the topics scheduled to be

14-17 considered during the meeting, including, without limitation, any proposed

14-18 amendment to the declaration or bylaws, any fees or assessments to be

14-19 imposed or increased by the association, any budgetary changes and any

14-20 proposal to remove an officer or member of the executive board.

14-21 (b) A list describing the items on which action may be taken and clearly

14-22 denoting that action may be taken on those items. In an emergency, the

14-23 units’ owners may take action on an item which is not listed on the

14-24 agenda as an item on which action may be taken.

14-25 (c) A period devoted to comments by units’ owners and discussion of

14-26 those comments. Except in emergencies, no action may be taken upon a

14-27 matter raised under this item of the agenda until the matter itself has been

14-28 specifically included on an agenda as an item upon which action may be

14-29 taken pursuant to paragraph (b).

14-30 4. If the association adopts a policy imposing a fine on a unit’s owner

14-31 for the violation of the declaration, bylaws or other rules established by the

14-32 association, the secretary or other officer specified in the bylaws shall

14-33 prepare and cause to be hand-delivered or sent prepaid by United States

14-34 mail to the mailing address of each unit or to any other mailing address

14-35 designated in writing by the unit’s owner, a schedule of the fines that may

14-36 be imposed for those violations.

14-37 5. Not more than 30 days after any meeting [,] of the units’ owners,

14-38 the secretary or other officer specified in the bylaws shall cause the minutes

14-39 or a summary of the minutes of the meeting to be made available to the

14-40 units’ owners. A copy of the minutes or a summary of the minutes must be

14-41 provided to any unit’s owner who pays the association the cost of providing

14-42 the copy to him.

15-1 6. As used in this section, "emergency" means any occurrence or

15-2 combination of occurrences that could not have been reasonably

15-3 foreseen, which requires the immediate attention of, and possible action

15-4 by, the executive board and which makes it impracticable to comply with

15-5 the provisions of subsection 2 or 3.

15-6 Sec. 24. NRS 116.31085 is hereby amended to read as follows:

15-7 116.31085 1. Except as otherwise provided in this section, a unit’s

15-41 executive session.

16-1 Sec. 25. NRS 116.311 is hereby amended to read as follows:

16-2 116.311 1. If only one of several owners of a unit is present at a

16-38 cast.

16-39 Sec. 26. NRS 116.31139 is hereby amended to read as follows:

16-40 116.31139 1. An association shall employ a person engaged in

16-43 property management for a common-interest community must:

17-1 (a) Hold a permit to engage in property management that is issued

17-2 pursuant to the provisions of chapter 645 of NRS; or

17-3 (b) Hold a certificate issued by the real estate commission pursuant to

17-4 subsection [2.] 3.

17-5 [2.] 3. The real estate commission shall provide by regulation for the

17-6 issuance of certificates for the management of common-interest

17-7 communities to persons who are not otherwise authorized to engage in

17-8 property management pursuant to the provisions of chapter 645 of NRS.

17-9 The regulations:

17-10 (a) Must establish the qualifications for the issuance of such a

17-11 certificate, including the education and experience required to obtain such a

17-12 certificate; [and]

17-13 (b) May require applicants to pass an examination in order to obtain a

17-14 certificate [.] ; and

17-15 (c) Must establish the grounds for initiating disciplinary action

17-16 against a person to whom such a certificate has been issued, including,

17-17 without limitation, the suspension or revocation of the certificate.

17-18 The real estate division of the department of business and industry may

17-19 collect a fee for the issuance of a certificate by the commission in an

17-20 amount not to exceed the administrative costs of issuing the certificate.

17-21 [3.] 4. The provisions of subsection [1] 2 do not apply to:

17-22 (a) A full-time employee of an association who manages only one

17-23 association.

17-24 (b) A financial institution.

17-25 (c) An attorney licensed to practice in this state.

17-26 (d) A trustee.

17-27 (e) An employee of a corporation who manages only the property of the

17-28 corporation.

17-29 (f) A declarant.

17-30 (g) A receiver.

17-31 [4.] 5. As used in this section, "property management" means the

17-32 physical, administrative or financial maintenance and management of real

17-33 property, or the supervision of those activities for a fee, commission or

17-34 other compensation or valuable consideration.

17-35 Sec. 27. NRS 116.3115 is hereby amended to read as follows:

17-36 116.3115 1. Until the association makes an assessment for common

17-42 provisions of chapter 119A of NRS, and unless the declaration imposes

18-1 more stringent standards, the budget must include a budget for the daily

18-2 operation of the association and the money for the reserve required by

18-3 paragraph (b) of subsection 2.

18-4 2. Except for assessments under subsections 4, 5 and 6:

18-5 (a) All common expenses, including a reserve, must be assessed against

18-6 all the units in accordance with the allocations set forth in the declaration

18-7 pursuant to subsections 1 and 2 of NRS 116.2107.

18-8 (b) The association shall establish [a] an adequate reserve , funded on a

18-9 reasonable basis, for the repair , [and] replacement , restoration and

18-10 maintenance of the major components of the common elements. [The]

18-11 Except as otherwise provided in section 5 of this act, the reserve may be

18-12 used only for [common expenses that involve major repairs or

18-13 replacement,] those purposes, including, without limitation, repairing ,

18-14 [and] replacing , restoring and maintaining roofs, roads and sidewalks,

18-15 and must not be used for daily maintenance.

18-16 3. Any past due assessment for common expenses or installment

18-17 thereof bears interest at the rate established by the association not

18-18 exceeding 18 percent per year.

18-19 4. To the extent required by the declaration:

18-20 (a) Any common expense associated with the maintenance, repair ,

18-21 restoration or replacement of a limited common element must be assessed

18-22 against the units to which that limited common element is assigned, equally,

18-23 or in any other proportion the declaration provides;

18-24 (b) Any common expense or portion thereof benefiting fewer than all of

18-25 the units must be assessed exclusively against the units benefited; and

18-26 (c) The costs of insurance must be assessed in proportion to risk and the

18-27 costs of utilities must be assessed in proportion to usage.

18-28 5. Assessments to pay a judgment against the association may be made

18-29 only against the units in the common-interest community at the time the

18-30 judgment was entered, in proportion to their liabilities for common

18-31 expenses.

18-32 6. If any common expense is caused by the misconduct of any unit’s

18-33 owner, the association may assess that expense exclusively against his unit.

18-34 7. If liabilities for common expenses are reallocated, assessments for

18-35 common expenses and any installment thereof not yet due must be

18-36 recalculated in accordance with the reallocated liabilities.

18-37 8. The association shall provide written notice to the owner of each

18-38 unit of a meeting at which an assessment for a capital improvement or the

18-39 commencement of a civil action is to be considered or action is to be taken

18-40 on such an assessment at least 21 calendar days before the meeting. Except

18-41 as otherwise provided in this subsection, the association may commence a

18-42 civil action only upon a vote [or agreement] of the owners of units to which

19-1 at least a majority of the votes of the members of the association are

19-2 allocated [.] , taken at a regularly scheduled meeting. The provisions of

19-3 this subsection do not apply to a civil action that is commenced:

19-4 (a) By an association for a time-share project governed by the

19-5 provisions of chapter 119A of NRS;

19-6 (b) To enforce the payment of an assessment;

19-7 (c) To enforce the declaration, bylaws or rules of the association;

19-8 (d) To proceed with a counterclaim; or

19-9 (e) To protect the health, safety and welfare of the members of the

19-10 association [.] from an imminent risk of loss of life or serious and

19-11 permanent damage to property. If a civil action is commenced pursuant

19-12 to this paragraph, the action must be ratified within 30 days after the

19-13 commencement of the action upon a vote of the owners of units to which

19-14 at least a majority of the votes of the members of the association are

19-15 allocated. If the action is not so ratified, the association shall file a

19-16 special motion to dismiss the action and the court shall dismiss the action

19-17 without prejudice for failure to comply with this paragraph.

19-18 Sec. 28. NRS 116.31155 is hereby amended to read as follows:

19-19 116.31155 1. An association [that is not a master association and

19-40 required to be paid pursuant to this section to more than one association.

19-41 Sec. 29. NRS 116.31162 is hereby amended to read as follows:

19-42 116.31162 1. Except as otherwise provided in subsection 4, in a

19-43 condominium, a cooperative where the owner’s interest in a unit is real

20-1 estate as determined pursuant to NRS 116.1105, or a planned community,

20-2 the association may foreclose its lien by sale after:

20-3 (a) The association has mailed by certified or registered mail, return

20-4 receipt requested, to the unit’s owner or his successor in interest, at his

20-5 address if known, and at the address of the unit, a notice of delinquent

20-6 assessment which states the amount of the assessments and other sums

20-7 which are due in accordance with subsection 1 of NRS 116.3116, a

20-8 description of the unit against which the lien is imposed, and the name of

20-9 the record owner of the unit;

20-10 (b) The association or other person conducting the sale has executed and

20-11 caused to be recorded, with the county recorder of the county in which the

20-12 common-interest community or any part of it is situated, a notice of default

20-13 and election to sell the unit to satisfy the lien, which contains the same

20-14 information as the notice of delinquent assessment, but must also describe

20-15 the deficiency in payment and the name and address of the person

20-16 authorized by the association to enforce the lien by sale; and

20-17 (c) The unit’s owner or his successor in interest has failed to pay the

20-18 amount of the lien, including costs, fees and expenses incident to its

20-19 enforcement, for 60 days following the recording of the notice of default

20-20 and election to sell.

20-21 2. The notice of default and election to sell must be signed by the

20-22 person designated in the declaration or by the association for that purpose,

20-23 or if no one is designated, by the president of the association.

20-24 3. The period of 60 days begins on the first day following the later of:

20-25 (a) The day on which the notice of default is recorded; or

20-26 (b) The day on which a copy of the notice of default is mailed by

20-27 certified or registered mail, return receipt requested, to the unit’s owner or

20-28 his successor in interest at his address if known, [otherwise to] and at the

20-29 address of the unit.

20-30 4. The association may not foreclose a lien by sale for the assessment

20-31 of a fine for a violation of the declaration, bylaws, rules or regulations of

20-32 the association, unless the violation is of a type that threatens the health

20-33 [and] , safety or welfare of the residents of the common-interest

20-34 community.

20-35 Sec. 30. NRS 116.4101 is hereby amended to read as follows:

20-36 116.4101 1. NRS 116.4101 to 116.412, inclusive, apply to all units

20-43 (b) Disposition pursuant to court order;

21-1 (c) Disposition by a government or governmental agency;

21-2 (d) Disposition by foreclosure or deed in lieu of foreclosure;

21-3 (e) Disposition to a dealer; or

21-4 (f) Disposition that may be canceled at any time and for any reason by

21-5 the purchaser without penalty . [; or

21-6 (g) Disposition of a unit in a planned community in which the

21-7 declaration limits the average annual assessment of any unit to not more

21-8 than $500, exclusive of optional users’ fees and any insurance premiums

21-9 paid by the association, or which contains no more than 12 units if:

21-10 (1) The declarant reasonably believes in good faith that the maximum

21-11 stated assessment will be sufficient to pay the expenses of the planned

21-12 community; and

21-13 (2) The declaration cannot be amended to increase the assessment

21-14 during the period of declarant’s control without the consent of all units’

21-15 owners.

21-16 3. Except as otherwise provided in subsection 2, the provisions of NRS

21-17 116.4101 to 116.412, inclusive, do not apply to a planned community

21-18 described in NRS 116.1203.]

21-19 Sec. 31. NRS 116.4103 is hereby amended to read as follows:

21-20 116.4103 1. Except as otherwise provided in NRS 116.41035, a

21-43 116.3115.

22-1 (f) A description of any services or subsidies being provided by the

22-2 declarant or an affiliate of the declarant, not reflected in the budget.

22-3 (g) Any initial or special fee due from the purchaser at closing, together

22-4 with a description of the purpose and method of calculating the fee.

22-5 (h) The terms and significant limitations of any warranties provided by

22-6 the declarant, including statutory warranties and limitations on the

22-7 enforcement thereof or on damages.

22-8 (i) A statement that unless the purchaser or his agent has personally

22-9 inspected the unit, the purchaser may cancel, by written notice, his contract

22-10 for purchase until midnight of the fifth calendar day following the date of

22-11 execution of the contract, and the contract must contain a provision to that

22-12 effect.

22-13 (j) A statement of any unsatisfied judgments or pending suits against the

22-14 association, and the status of any pending suits material to the common-

22-15 interest community of which a declarant has actual knowledge.

22-16 (k) Any current or expected fees or charges to be paid by units’ owners

22-17 for the use of the common elements and other facilities related to the

22-18 common-interest community.

22-19 2. A declarant is not required to revise a public offering statement

22-20 more than once each calendar quarter, if the following warning is given

22-21 prominence in the statement: "THIS PUBLIC OFFERING STATEMENT

22-22 IS CURRENT AS OF (insert a specified date). RECENT

22-23 DEVELOPMENTS REGARDING (here refer to particular provisions of

22-24 NRS 116.4103 and 116.4105) MAY NOT BE REFLECTED IN THIS

22-25 STATEMENT."

22-26 Sec. 32. NRS 116.41095 is hereby amended to read as follows:

22-27 116.41095 The information statement required by NRS 116.4109 must

22-42 community, but may also restrict what you can do to improve or change

23-1 your property and limit how you use and enjoy your property. By

23-2 purchasing a property encumbered by C, C & R’s, you are agreeing to

23-3 limitations that could affect your lifestyle and freedom of choice. You

23-4 should review the C, C & R’s and other governing documents before

23-5 purchasing to make sure that these limitations and controls are acceptable

23-6 to you.

23-7 2. YOU WILL HAVE TO PAY OWNERS’ ASSESSMENTS FOR AS

23-8 LONG AS YOU OWN YOUR PROPERTY?

23-9 As an owner in a common-interest community, you are responsible for

23-10 paying your share of expenses relating to the common elements, such as

23-11 landscaping, shared amenities and the operation of any homeowner’s

23-12 association. The obligation to pay these assessments binds you and every

23-13 future owner of the property. Owners’ fees are usually assessed by the

23-14 homeowner’s association and due monthly. You have to pay dues whether

23-15 or not you agree with the way the association is managing the property or

23-16 spending the assessments. The executive board of the association may have

23-17 the power to change and increase the amount of the assessment and to levy

23-18 special assessments against your property to meet extraordinary expenses.

23-19 In some communities, major components of the community such as roofs

23-20 and private roads must be maintained and replaced by the association. If the

23-21 association is not well managed or fails to maintain adequate reserves to

23-22 repair , [and] replace , restore and maintain common elements, you may

23-23 be required to pay large, special assessments to accomplish these tasks.

23-24 3. IF YOU FAIL TO PAY OWNERS’ ASSESSMENTS, YOU

23-25 COULD LOSE YOUR HOME?

23-26 If you do not pay these assessments when due, the association usually has

23-27 the power to collect them by selling your property in a nonjudicial

23-28 foreclosure sale. If fees become delinquent, you may also be required to

23-29 pay penalties and the association’s costs and attorney’s fees to become

23-30 current. If you dispute the obligation or its amount, your only remedy to

23-31 avoid the loss of your home may be to file a lawsuit and ask a court to

23-32 intervene in the dispute.

23-33 4. YOU MAY BECOME A MEMBER OF A HOMEOWNER’S

23-34 ASSOCIATION THAT HAS THE POWER TO AFFECT HOW YOU

23-35 USE AND ENJOY YOUR PROPERTY?

23-36 Many common-interest communities have a homeowner’s association. In a

23-37 new development, the association will usually be controlled by the

23-38 developer until a certain number of units have been sold. After the period

23-39 of developer control, the association may be controlled by property owners

23-40 like yourself who are elected by homeowners to sit on an executive board

23-41 and other boards and committees formed by the association. The

23-42 association, and its executive board, are responsible for assessing

23-43 homeowners for the cost of operating the association and the common or

24-1 shared elements of the community and for the day to day operation and

24-2 management of the community. Because homeowners sitting on the

24-3 executive board and other boards and committees of the association may

24-4 not have the experience or professional background required to understand

24-5 and carry out the responsibilities of the association properly, the association

24-6 may hire professional managers to carry out these responsibilities.

24-7 Homeowner’s associations operate on democratic principles. Some

24-8 decisions require all homeowners to vote, some decisions are made by the

24-9 executive board or other boards or committees established by the

24-10 association or governing documents. Although the actions of the

24-11 association and its executive board are governed by state laws, the C, C &

24-12 R’s and other documents that govern the common-interest community,

24-13 decisions made by these persons will affect your use and enjoyment of your

24-14 property, your lifestyle and freedom of choice, and your cost of living in

24-15 the community. You may not agree with decisions made by the association

24-16 or its governing bodies even though the decisions are ones which the

24-17 association is authorized to make. Decisions may be made by a few persons

24-18 on the executive board or governing bodies that do not necessarily reflect

24-19 the view of the majority of homeowners in the community. If you do not

24-20 agree with decisions made by the association, its executive board or other

24-21 governing bodies, your remedy is typically to attempt to use the democratic

24-22 processes of the association to seek the election of members of the

24-23 executive board or other governing bodies that are more responsive to your

24-24 needs. If persons controlling the association or its management are not

24-25 complying with state laws or the governing documents, your remedy is

24-26 typically to [seek to mediate or arbitrate the dispute and, if mediation or

24-27 arbitration is unsuccessful, file a lawsuit and ask a court to resolve the

24-28 dispute.] file a written claim with the commission for the resolution of

24-29 disputes related to common-interest communities and, if that is

24-30 unsuccessful, seek judicial review of the decision rendered by the

24-31 commission. In addition to your personal cost in mediation or arbitration,

24-32 or to prosecute a lawsuit, you may be responsible for paying your share of

24-33 the association’s cost in defending against your claim. There is no

24-34 government agency in this state that investigates or intervenes to resolve

24-35 disputes in homeowner’s associations.

24-36 5. YOU ARE REQUIRED TO PROVIDE PROSPECTIVE BUYERS

24-37 OF YOUR PROPERTY WITH INFORMATION ABOUT LIVING IN

24-38 YOUR COMMON-INTEREST COMMUNITY?

24-39 The law requires you to provide to a prospective purchaser of your

24-40 property, before you enter into a purchase agreement, a copy of the

24-41 community’s governing documents, including the C, C & R’s, association

24-42 bylaws, and rules and regulations, as well as a copy of this document. You

24-43 are also required to provide a copy of the association’s current financial

25-1 statement, operating budget and information regarding the amount of the

25-2 monthly assessment for common expenses, including the amount set aside

25-3 as reserves for the repair , [and] replacement , restoration and

25-4 maintenance of common elements. You are also required to inform

25-5 prospective purchasers of any outstanding judgments or lawsuits pending

25-6 against the association of which you are aware. You are also required to

25-7 provide a copy of the minutes from the most recent meeting of the

25-8 homeowner’s association or its executive board. For more information

25-9 regarding these requirements, see Nevada Revised Statutes 116.4103.

25-10 6. YOU HAVE CERTAIN RIGHTS REGARDING OWNERSHIP IN

25-11 A COMMON-INTEREST COMMUNITY THAT ARE GUARANTEED

25-12 YOU BY THE STATE?

25-13 Pursuant to provisions of chapter 116 of Nevada Revised Statutes, you

25-14 have the right:

25-15 (a) To be notified of all meetings of the association and its executive

25-16 board, except in cases of emergency.

25-17 (b) To attend and speak at all meetings of the association and its

25-18 executive board, except in some cases where the executive board is

25-19 authorized to meet in closed, executive session.

25-20 (c) To request a special meeting of the association upon petition of at

25-21 least 10 percent of the homeowners.

25-22 (d) To inspect, examine, photocopy and audit financial and other

25-23 records of the association.

25-24 (e) To be notified of all changes in the community’s rules and

25-25 regulations and other actions by the association or board that affect you.

25-26 7. QUESTIONS?

25-27 Although they may be voluminous, you should take the time to read and

25-28 understand the documents that will control your ownership of a property in

25-29 a common-interest community. You may wish to ask your real estate

25-30 professional, lawyer or other person with experience to explain anything

25-31 you do not understand. You may also request assistance from the

25-32 ombudsman for owners in common-interest communities, Nevada Real

25-33 Estate Division, at (telephone number).

25-34 Buyer or prospective buyer’s initials:_____

25-35 Date:_____

25-36 Sec. 33. NRS 116.4117 is hereby amended to read as follows:

25-37 116.4117 1. If a declarant or any other person subject to this chapter

25-42 this act and except as otherwise provided in NRS 116.3111, a civil action

26-1 for damages caused by a failure or refusal to comply with any provision of

26-2 this chapter or the governing documents of an association may be brought:

26-3 (a) By the association against:

26-4 (1) A declarant; or

26-5 (2) A unit’s owner.

26-6 (b) By a unit’s owner against:

26-7 (1) The association;

26-8 (2) A declarant; or

26-9 (3) Another unit’s owner of the association.

26-10 3. Punitive damages may be awarded for a willful and material failure

26-11 to comply with this chapter if the failure is established by clear and

26-12 convincing evidence.

26-13 4. [The] Except as otherwise provided in section 10 of this act, the

26-14 court may award reasonable attorney’s fees to the prevailing party.

26-15 5. The civil remedy provided by this section is in addition to, and not

26-16 exclusive of, any other available remedy or penalty.

26-17 Sec. 34. NRS 38.250 is hereby amended to read as follows:

26-18 38.250 Except as otherwise provided in [NRS 38.310:] section 9 of

26-25 to arbitration if the parties agree, orally or in writing, to the submission.

26-26 Sec. 35. NRS 38.300, 38.310, 38.320, 38.330, 38.340, 38.350,

26-27 38.360, 116.1102, 116.1115, 116.1202, 116.1203, 116.1204, 116.1205,

26-28 116.1206, 116.1207 and 116.1208 are hereby repealed.

26-29 Sec. 36. The executive board of a unit-owners’ association organized

26-30 under NRS 116.3101 shall cause to be prepared a study of the reserves of

26-31 the association required by section 4 of this act by October 1, 2000.

26-32 Sec. 37. Any declaration, bylaw or other governing document of a

26-33 common-interest community in effect on October 1, 1999, that does not

26-34 conform to the provisions of chapter 116 of NRS, as amended by this act,

26-35 shall be deemed to have been conformed to those provisions by operation

26-36 of law. Notwithstanding any other provision of law to the contrary, not later

26-37 than October 1, 2000, any such declaration, bylaw or other governing

26-38 document must be changed to conform with chapter 116 of NRS, as

26-39 amended by this act, and may be so changed without complying with the

26-40 procedural requirements generally applicable to the adoption of an

26-41 amendment to such a declaration, bylaw or other governing document.

27-1 LEADLINES OF REPEALED SECTIONS

27-2 38.300 Definitions.