REQUIRES TWO-THIRDS MAJORITY VOTE (§ 29) EXEMPT
(REPRINTED WITH ADOPTED AMENDMENTS)
THIRD REPRINT S.B. 261
Senate Bill No. 261–Senator Schneider
February 28, 2001
____________
Referred to Committee on Judiciary
SUMMARY—Makes various changes to provisions governing time shares and common-interest communities. (BDR 10‑819)
FISCAL NOTE: Effect on Local Government: Yes.
Effect on the State: No.
~
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).
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
1-1 Section 1. NRS 116.1201 is hereby amended to read as follows:
1-2 116.1201 1. Except as otherwise provided in this section and NRS
1-3 116.1203, this chapter applies to all common-interest communities created
1-4 within this state.
1-5 2. This chapter does not apply to:
1-6 (a) Associations created for the limited purpose of maintaining:
1-7 (1) The landscape of the common elements of a common-interest
1-8 community;
1-9 (2) Facilities for flood control; or
1-10 (3) A rural agricultural residential common-interest community.
1-11 (b) A planned community in which all units are restricted exclusively to
1-12 nonresidential use unless the declaration provides that the chapter does
1-13 apply to that planned community. This chapter applies to a planned
1-14 community containing both units that are restricted exclusively to
1-15 nonresidential use and other units that are not so restricted, only if the
1-16 declaration so provides or the real estate comprising the units that may be
2-1 used for residential purposes would be a planned community in the absence
2-2 of the units that may not be used for residential purposes.
2-3 (c) Common-interest communities or units located outside of this state,
2-4 but the provisions of NRS 116.4102 to 116.4108, inclusive, apply to all
2-5 contracts for the disposition thereof signed in this state by any party unless
2-6 exempt under subsection 2 of NRS 116.4101.
2-7 (d) Except as otherwise provided in this chapter, time shares governed
2-8 by the provisions of chapter 119A of NRS.
2-9 3. The provisions of this chapter do not:
2-10 (a) Prohibit a common-interest community created before January 1,
2-11 1992, from providing for separate classes of voting for the units’ owners of
2-12 the association;
2-13 (b) Require a common-interest community created before January 1,
2-14 1992, to comply with the provisions of NRS 116.2101 to 116.2122,
2-15 inclusive;
2-16 (c) Invalidate any assessments that were imposed on or before
2-17 October 1, 1999, by a common-interest community created before
2-18 January 1, 1992; or
2-19 (d) Prohibit a common-interest community created before January 1,
2-20 1992, from providing for a representative form of government.
2-21 4. The provisions of chapters 117 and 278A of NRS do not apply to
2-22 common-interest communities.
2-23 5. For the purposes of this section, the administrator shall establish, by
2-24 regulation, the criteria for determining whether an association is created for
2-25 the limited purpose of maintaining the landscape of the common elements
2-26 of a common-interest community, maintaining facilities for flood control or
2-27 maintaining a rural agricultural residential common-interest community.
2-28 Sec. 2. NRS 116.212 is hereby amended to read as follows:
2-29 116.212 1. If the declaration provides that any of the powers
2-30 described in NRS 116.3102, are to be exercised by or may be delegated to
2-31 a profit or nonprofit corporation that exercises those or other powers on
2-32 behalf of one or more common-interest communities or for the benefit of
2-33 the units’ owners of one or more common-interest communities, or on
2-34 behalf of a common-interest community and a time-share plan created
2-35 pursuant to chapter 119A of NRS, all provisions of this chapter applicable
2-36 to unit-owners’ associations apply to any such corporation, except as
2-37 modified by this section.
2-38 2. Unless it is acting in the capacity of an association described in NRS
2-39 116.3101, a master association may exercise the powers set forth in
2-40 paragraph (b) of subsection 1 of NRS 116.3102 only to the extent expressly
2-41 permitted in [the] :
2-42 (a) The declarations of common-interest communities which are part of
2-43 the master association or expressly described in the delegations of power
2-44 from those common-interest communities to the master association[.] ; or
2-45 (b) The declaration of the common-interest community which is a part
2-46 of the master association and the time-share instrument creating the
2-47 time-share plan governed by the master association.
2-48 3. If the declaration of any common-interest community provides that
2-49 the executive board may delegate certain powers to a master association,
3-1 the members of the executive board have no liability for the acts or
3-2 omissions of the master association with respect to those powers following
3-3 delegation.
3-4 4. The rights and responsibilities of units’ owners with respect to the
3-5 unit-owners’ association set forth in NRS 116.3103 to 116.31038,
3-6 inclusive, 116.3108, 116.3109, 116.311 and 116.3112 apply in the conduct
3-7 of the affairs of a master association only to persons who elect the board of
3-8 a master association, whether or not those persons are otherwise units’
3-9 owners within the meaning of this chapter.
3-10 5. Even if a master association is also an association described in NRS
3-11 116.3101, the certificate of incorporation or other instrument creating the
3-12 master association and the declaration of each common-interest
3-13 community, the powers of which are assigned by the declaration or
3-14 delegated to the master association, may provide that the executive board
3-15 of the master association must be elected after the period of the declarant’s
3-16 control in any of the following ways:
3-17 (a) All units’ owners of all common-interest communities subject to the
3-18 master association may elect all members of the master association’s
3-19 executive board.
3-20 (b) All members of the executive boards of all common-interest
3-21 communities subject to the master association may elect all members of the
3-22 master association’s executive board.
3-23 (c) All units’ owners of each common-interest community subject to the
3-24 master association may elect specified members of the master association’s
3-25 executive board.
3-26 (d) All members of the executive board of each common-interest
3-27 community subject to the master association may elect specified members
3-28 of the master association’s executive board.
3-29 Sec. 3. NRS 116.31032 is hereby amended to read as follows:
3-30 116.31032 1. Except as otherwise provided in [subsection 2,] this
3-31 section, the declaration may provide for a period of declarant’s control of
3-32 the association, during which a declarant, or persons designated by him,
3-33 may appoint and remove the officers of the association and members of the
3-34 executive board. Regardless of the period provided in the declaration, a
3-35 period of declarant’s control terminates no later than : [the earlier of:]
3-36 (a) Sixty days after conveyance of 75 percent of the units that may be
3-37 created to units’ owners other than a declarant[, except that if a majority of
3-38 the units are divided into time shares, the percentage is 80 percent;] or, if
3-39 the association exercises powers over a common-interest community
3-40 pursuant to this chapter and a time-share plan pursuant to chapter 119A
3-41 of NRS, 120 days after conveyance of 80 percent of the units that may be
3-42 created to units’ owners other than a declarant;
3-43 (b) Five years after all declarants have ceased to offer units for sale in
3-44 the ordinary course of business; or
3-45 (c) Five years after any right to add new units was last
3-46 exercised[.] ,
3-47 whichever occurs earlier.
3-48 2. A declarant may voluntarily surrender the right to appoint and
3-49 remove officers and members of the executive board before termination of
4-1 that period, but in that event the declarant may require, for the duration of
4-2 the period of declarant’s control, that specified actions of the association or
4-3 executive board, as described in a recorded instrument executed by the
4-4 declarant, be approved by the declarant before they become effective.
4-5 [2.] 3. Not later than 60 days after conveyance of 25 percent of the
4-6 units that may be created to units’ owners other than a declarant, at least
4-7 one member and not less than 25 percent of the members of the executive
4-8 board must be elected by units’ owners other than the declarant. Not later
4-9 than 60 days after conveyance of 50 percent of the units that may be
4-10 created to units’ owners other than a declarant, not less than 33 1/3 percent
4-11 of the members of the executive board must be elected by units’ owners
4-12 other than the declarant.
4-13 Sec. 4. NRS 116.31038 is hereby amended to read as follows:
4-14 116.31038 Within 30 days after units’ owners other than the declarant
4-15 may elect a majority of the members of the executive board, the declarant
4-16 shall deliver to the association all property of the units’ owners and of the
4-17 association held by or controlled by him, including:
4-18 1. The original or a certified copy of the recorded declaration as
4-19 amended, the association’s articles of incorporation if the association is
4-20 incorporated, bylaws, minute books and other books and records of the
4-21 association and any rules or regulations which may have been adopted.
4-22 2. An accounting for money of the association and financial statements
4-23 from the date the association received money to the date the period of the
4-24 declarant’s control ends. The financial statements must fairly and
4-25 accurately report the association’s financial condition prepared in
4-26 accordance with generally accepted accounting principles.
4-27 3. A complete study of the reserves of the association, conducted by a
4-28 person qualified by training and experience to conduct such a study. At the
4-29 time the control of the declarant ends, he shall:
4-30 (a) Except as otherwise provided in this paragraph, deliver to the
4-31 association a reserve account that contains the declarant’s share of the
4-32 amounts then due, and control of the account. If the declaration was
4-33 recorded before October 1, 1999, and, at the time the control of the
4-34 declarant ends, he has failed to pay his share of the amounts due, the
4-35 executive board shall authorize the declarant to pay the deficiency in
4-36 installments for a period of 3 years, unless the declarant and the executive
4-37 board agree to a shorter period.
4-38 (b) Disclose, in writing, the amount by which he has subsidized the
4-39 association’s dues on a per unit or per lot basis.
4-40 [The provisions of this subsection do not apply to a time share or time-
4-41 share project governed by the provisions of chapter 119A of NRS.]
4-42 4. The association’s money or control thereof.
4-43 5. All of the declarant’s tangible personal property that has been
4-44 represented by the declarant as property of the association or, unless the
4-45 declarant has disclosed in the public offering statement that all such
4-46 personal property used in the common-interest community will remain the
4-47 declarant’s property, all of the declarant’s tangible personal property that is
4-48 necessary for, and has been used exclusively in, the operation and
4-49 enjoyment of the common elements, and inventories of these properties.
5-1 6. A copy of any plans and specifications used in the construction of
5-2 the improvements in the common-interest community which were
5-3 completed within 2 years before the declaration was recorded.
5-4 7. All insurance policies then in force, in which the units’ owners, the
5-5 association, or its directors and officers are named as insured persons.
5-6 8. Copies of any certificates of occupancy that may have been issued
5-7 with respect to any improvements comprising the common-interest
5-8 community other than units in a planned community.
5-9 9. Any renewable permits and approvals issued by governmental
5-10 bodies applicable to the common-interest community which are in force
5-11 and any other permits and approvals so issued and applicable which are
5-12 required by law to be kept on the premises of the community.
5-13 10. Written warranties of the contractor, subcontractors, suppliers and
5-14 manufacturers that are still effective.
5-15 11. A roster of owners and mortgagees of units and their addresses and
5-16 telephone numbers, if known, as shown on the declarant’s records.
5-17 12. Contracts of employment in which the association is a contracting
5-18 party.
5-19 13. Any contract for service in which the association is a contracting
5-20 party or in which the association or the units’ owners have any obligation
5-21 to pay a fee to the persons performing the services.
5-22 Sec. 5. NRS 116.3115 is hereby amended to read as follows:
5-23 116.3115 1. Until the association makes an assessment for common
5-24 expenses, the declarant shall pay all common expenses. After an
5-25 assessment has been made by the association, assessments must be made at
5-26 least annually, based on a budget adopted at least annually by the
5-27 association in accordance with the requirements set forth in NRS
5-28 116.31151. [Except for an association for a time-share project governed by
5-29 the provisions of chapter 119A of NRS, and unless] Unless the declaration
5-30 imposes more stringent standards, the budget must include a budget for the
5-31 daily operation of the association and the money for the reserve required by
5-32 paragraph (b) of subsection 2.
5-33 2. Except for assessments under subsections 4 to 7, inclusive:
5-34 (a) All common expenses, including a reserve, must be assessed against
5-35 all the units in accordance with the allocations set forth in the declaration
5-36 pursuant to subsections 1 and 2 of NRS 116.2107.
5-37 (b) The association shall establish an adequate reserve, funded on a
5-38 reasonable basis, for the repair, replacement and restoration of the major
5-39 components of the common elements. The reserve may be used only for
5-40 those purposes, including, without limitation, repairing, replacing and
5-41 restoring roofs, roads and sidewalks, and must not be used for daily
5-42 maintenance.
5-43 3. Any past due assessment for common expenses or installment
5-44 thereof bears interest at the rate established by the association not
5-45 exceeding 18 percent per year.
5-46 4. To the extent required by the declaration:
5-47 (a) Any common expense associated with the maintenance, repair,
5-48 restoration or replacement of a limited common element must be assessed
6-1 against the units to which that limited common element is assigned,
6-2 equally, or in any other proportion the declaration provides;
6-3 (b) Any common expense or portion thereof benefiting fewer than all of
6-4 the units must be assessed exclusively against the units benefited; and
6-5 (c) The costs of insurance must be assessed in proportion to risk and the
6-6 costs of utilities must be assessed in proportion to usage.
6-7 5. Assessments to pay a judgment against the association may be made
6-8 only against the units in the common-interest community at the time the
6-9 judgment was entered, in proportion to their liabilities for common
6-10 expenses.
6-11 6. If any common expense is caused by the misconduct of any unit’s
6-12 owner, the association may assess that expense exclusively against his unit.
6-13 7. The association of a common-interest community created before
6-14 January 1, 1992, is not required to make an assessment against a vacant lot
6-15 located within the community that is owned by the declarant.
6-16 8. If liabilities for common expenses are reallocated, assessments for
6-17 common expenses and any installment thereof not yet due must be
6-18 recalculated in accordance with the reallocated liabilities.
6-19 9. The association shall provide written notice to the owner of each
6-20 unit of a meeting at which an assessment for a capital improvement or the
6-21 commencement of a civil action is to be considered or action is to be taken
6-22 on such an assessment at least 21 calendar days before the meeting. Except
6-23 as otherwise provided in this subsection, the association may commence a
6-24 civil action only upon a vote or written agreement of the owners of units to
6-25 which at least a majority of the votes of the members of the association are
6-26 allocated. The provisions of this subsection do not apply to a civil action
6-27 that is commenced:
6-28 (a) [By an association for a time-share project governed by the
6-29 provisions of chapter 119A of NRS;
6-30 (b)] To enforce the payment of an assessment;
6-31 [(c)] (b) To enforce the declaration, bylaws or rules of the association;
6-32 [(d)] (c) To proceed with a counterclaim; or
6-33 [(e)] (d) To protect the health, safety and welfare of the members of the
6-34 association. If a civil action is commenced pursuant to this paragraph
6-35 without the required vote or agreement, the action must be ratified within
6-36 90 days after the commencement of the action by a vote or written
6-37 agreement of the owners of the units to which at least a majority of votes of
6-38 the members of the association are allocated. If the association, after
6-39 making a good faith effort, cannot obtain the required vote or agreement to
6-40 commence or ratify such a civil action, the association may thereafter seek
6-41 to dismiss the action without prejudice for that reason only if a vote or
6-42 written agreement of the owners of the units to which at least a majority of
6-43 votes of the members of the association are allocated was obtained at the
6-44 time the approval to commence or ratify the action was sought.
6-45 10. At least 10 days before an association commences or seeks to
6-46 ratify the commencement of a civil action, the association shall provide a
6-47 written statement to all units’ owners that includes:
6-48 (a) A reasonable estimate of the costs of the civil action, including
6-49 reasonable attorney’s fees;
7-1 (b) An explanation of the potential benefits of the civil action and the
7-2 potential adverse consequences if the association does not commence the
7-3 action or if the outcome of the action is not favorable to the association;
7-4 and
7-5 (c) All disclosures that are required to be made upon the sale of the
7-6 property.
7-7 11. No person other than a unit’s owner may request the dismissal of a
7-8 civil action commenced by the association on the ground that the
7-9 association failed to comply with any provision of this section.
7-10 Sec. 6. NRS 116.4102 is hereby amended to read as follows:
7-11 116.4102 1. Except as otherwise provided in subsection 2, a
7-12 declarant, before offering any interest in a unit to the public, shall prepare a
7-13 public offering statement conforming to the requirements of NRS 116.4103
7-14 to 116.4106, inclusive.
7-15 2. A declarant may transfer responsibility for the preparation of all or a
7-16 part of the public offering statement to a successor declarant [(] pursuant
7-17 to NRS 116.3104 and 116.31043 , [)] or to a dealer who intends to offer
7-18 units in the common-interest community. In the event of any such transfer,
7-19 the transferor shall provide the transferee with any information necessary
7-20 to enable the transferee to fulfill the requirements of subsection 1.
7-21 3. Any declarant or dealer who offers a unit to a purchaser shall deliver
7-22 a public offering statement in the manner prescribed in subsection 1 of
7-23 NRS 116.4108. The declarant or his transferee under subsection 2 is liable
7-24 under NRS 116.4108 and 116.4117 for any false or misleading statement
7-25 set forth therein or for any omission of a material fact therefrom with
7-26 respect to that portion of the public offering statement which he prepared.
7-27 If a declarant or dealer did not prepare any part of a public offering
7-28 statement that he delivers, he is not liable for any false or misleading
7-29 statement set forth therein or for any omission of a material fact therefrom
7-30 unless he had actual knowledge of the statement or omission or, in the
7-31 exercise of reasonable care, should have known of the statement or
7-32 omission.
7-33 4. If a unit is part of a common-interest community and is part of any
7-34 other real estate in connection with the sale of which the delivery of a
7-35 public offering statement is required under the laws of this state, a single
7-36 public offering statement conforming to the requirements of NRS 116.4103
7-37 to 116.4106, inclusive, as those requirements relate to the real estate in
7-38 which the unit is located, and to any other requirements imposed under the
7-39 laws of this state, may be prepared and delivered in lieu of providing two
7-40 or more public offering statements. [Except as otherwise provided in NRS
7-41 119A.165, if] If the requirements of this chapter conflict with those of
7-42 another law of this state, the requirements of this chapter prevail.
7-43 Sec. 7. NRS 116.4109 is hereby amended to read as follows:
7-44 116.4109 1. Except in the case of a sale in which delivery of a public
7-45 offering statement is required, or unless exempt under subsection 2 of NRS
7-46 116.4101, a unit’s owner shall furnish to a purchaser before the execution
7-47 of any contract for the sale of a unit, or otherwise before conveyance:
7-48 (a) A copy of the declaration, other than any plats and plans, the bylaws,
7-49 the rules or regulations of the association and [, except for a time share
8-1 governed by the provisions of chapter 119A of NRS,] the information
8-2 statement required by NRS 116.41095;
8-3 (b) A statement setting forth the amount of the monthly assessment for
8-4 common expenses , any other fees payable by a unit’s owner and any
8-5 unpaid assessment of any kind currently due from the selling unit’s owner
8-6 [;] that the purchaser will be obligated to pay;
8-7 (c) A statement setting forth any unpaid fines due from the selling
8-8 unit’s owner that the purchaser will be obligated to pay;
8-9 (d) A statement listing all written notices of a violation of the
8-10 governing documents of the association associated with the unit which
8-11 the association has previously provided to the selling unit’s owner and
8-12 which the purchaser will be obligated to correct or repair;
8-13 (e) The current operating budget of the association and a financial
8-14 statement for the association; [and
8-15 (d)] (f) A statement of any unsatisfied judgments or pending legal
8-16 actions [against] to which the association is a party and the status of any
8-17 such pending legal actions [relating to the common-interest community of
8-18 which the unit’s owner has actual knowledge.] ;
8-19 (g) A statement of any pending claims submitted to arbitration or
8-20 mediation to which the association is a party; and
8-21 (h) A statement of any claim for a constructional defect of which the
8-22 association has actual knowledge and for which the association will be a
8-23 party.
8-24 2. The association, within 10 days after receipt of a written request by
8-25 a unit’s owner, shall furnish a certificate addressed to the unit’s owner at
8-26 the address included in the written request containing the information
8-27 necessary to enable the unit’s owner to comply with this section. The
8-28 certificate must be signed by a member of the executive board of the
8-29 association or an authorized agent of the association. A unit’s owner
8-30 providing a certificate pursuant to subsection 1 is not liable to the
8-31 purchaser for any erroneous information provided by the association and
8-32 included in the certificate.
8-33 3. [Neither] Except as otherwise provided in subsection 6, neither a
8-34 purchaser nor the purchaser’s interest in a unit is liable to the association
8-35 for [any] :
8-36 (a) Any unpaid assessment , [or] fee or fine greater than the amount [set
8-37 forth in the certificate prepared by the association.] disclosed pursuant to
8-38 this section; or
8-39 (b) The correction or repair of any violation of the governing
8-40 documents of the association that is not disclosed pursuant to paragraph
8-41 (d) of subsection 1.
8-42 4. If the association fails to furnish the certificate within the 10 days
8-43 allowed by subsection 2, the seller is not liable to the association for [the] :
8-44 (a) Any delinquent assessment [.] , fee or fine owed to the association;
8-45 or
8-46 (b) The correction or repair of any violation of the governing
8-47 documents of the association associated with the unit that is required to
8-48 be disclosed pursuant to paragraph (d) of subsection 1.
9-1 5. A certificate issued by an association pursuant to this section
9-2 becomes effective on the date the certificate is signed pursuant to
9-3 subsection 2.
9-4 6. The association is not liable to any person for undisclosed
9-5 information if a unit’s owner does not make a written request for a
9-6 certificate pursuant to subsection 2.
9-7 Sec. 7.5. NRS 116.41095 is hereby amended to read as follows:
9-8 116.41095 The information statement required by NRS 116.4103 and
9-9 116.4109 must be in substantially the following form:
9-10 BEFORE YOU PURCHASE PROPERTY IN A
9-11 COMMON-INTEREST COMMUNITY
9-12 DID YOU KNOW . . .
9-13 1. YOU ARE AGREEING TO RESTRICTIONS ON HOW YOU
9-14 CAN USE YOUR PROPERTY?
9-15 These restrictions are contained in a document known as the Declaration of
9-16 Covenants, Conditions and Restrictions (C, C & R’s) that should be
9-17 provided for your review before making your purchase. The C, C & R’s
9-18 become a part of the title to your property. They bind you and every future
9-19 owner of the property whether or not you have read them or had them
9-20 explained to you. The C, C & R’s, together with other “governing
9-21 documents” (such as association bylaws and rules and regulations), are
9-22 intended to preserve the character and value of properties in the
9-23 community, but may also restrict what you can do to improve or change
9-24 your property and limit how you use and enjoy your property. By
9-25 purchasing a property encumbered by C, C & R’s, you are agreeing to
9-26 limitations that could affect your lifestyle and freedom of choice. You
9-27 should review the C, C & R’s and other governing documents before
9-28 purchasing to make sure that these limitations and controls are acceptable
9-29 to you.
9-30 2. YOU WILL HAVE TO PAY OWNERS’ ASSESSMENTS FOR AS
9-31 LONG AS YOU OWN YOUR PROPERTY?
9-32 As an owner in a common-interest community, you are responsible for
9-33 paying your share of expenses relating to the common elements, such as
9-34 landscaping, shared amenities and the operation of any homeowner’s
9-35 association. The obligation to pay these assessments binds you and every
9-36 future owner of the property. Owners’ fees are usually assessed by the
9-37 homeowner’s association and due monthly. You have to pay dues whether
9-38 or not you agree with the way the association is managing the property or
9-39 spending the assessments. The executive board of the association may have
9-40 the power to change and increase the amount of the assessment and to levy
9-41 special assessments against your property to meet extraordinary expenses.
9-42 In some communities, major components of the community such as roofs
9-43 and private roads must be maintained and replaced by the association. If
9-44 the association is not well managed or fails to maintain adequate reserves
9-45 to repair, replace and restore common elements, you may be required to
9-46 pay large, special assessments to accomplish these tasks.
10-1 3. IF YOU FAIL TO PAY OWNERS’ ASSESSMENTS, YOU
10-2 COULD LOSE YOUR HOME?
10-3 If you do not pay these assessments when due, the association usually has
10-4 the power to collect them by selling your property in a nonjudicial
10-5 foreclosure sale. If fees become delinquent, you may also be required to
10-6 pay penalties and the association’s costs and attorney’s fees to become
10-7 current. If you dispute the obligation or its amount, your only remedy to
10-8 avoid the loss of your home may be to file a lawsuit and ask a court to
10-9 intervene in the dispute.
10-10 4. YOU MAY BECOME A MEMBER OF A HOMEOWNER’S
10-11 ASSOCIATION THAT HAS THE POWER TO AFFECT HOW YOU
10-12 USE AND ENJOY YOUR PROPERTY?
10-13 Many common-interest communities have a homeowner’s association. In a
10-14 new development, the association will usually be controlled by the
10-15 developer until a certain number of units have been sold. After the period
10-16 of developer control, the association may be controlled by property owners
10-17 like yourself who are elected by homeowners to sit on an executive board
10-18 and other boards and committees formed by the association. The
10-19 association, and its executive board, are responsible for assessing
10-20 homeowners for the cost of operating the association and the common or
10-21 shared elements of the community and for the [day to day] day-to-day
10-22 operation and management of the community. Because homeowners sitting
10-23 on the executive board and other boards and committees of the association
10-24 may not have the experience or professional background required to
10-25 understand and carry out the responsibilities of the association properly,
10-26 the association may hire professional managers to carry out these
10-27 responsibilities.
10-28 Homeowner’s associations operate on democratic principles. Some
10-29 decisions require all homeowners to vote, some decisions are made by the
10-30 executive board or other boards or committees established by the
10-31 association or governing documents. Although the actions of the
10-32 association and its executive board are governed by state laws, the
10-33 C, C & R’s and other documents that govern the common-interest
10-34 community, decisions made by these persons will affect your use and
10-35 enjoyment of your property, your lifestyle and freedom of choice, and your
10-36 cost of living in the community. You may not agree with decisions made
10-37 by the association or its governing bodies even though the decisions are
10-38 ones which the association is authorized to make. Decisions may be made
10-39 by a few persons on the executive board or governing bodies that do not
10-40 necessarily reflect the view of the majority of homeowners in the
10-41 community. If you do not agree with decisions made by the association, its
10-42 executive board or other governing bodies, your remedy is typically to
10-43 attempt to use the democratic processes of the association to seek the
10-44 election of members of the executive board or other governing bodies that
10-45 are more responsive to your needs. If persons controlling the association or
10-46 its management are not complying with state laws or the governing
10-47 documents, your remedy is typically to seek to mediate or arbitrate the
10-48 dispute and, if mediation or arbitration is unsuccessful, file a lawsuit and
10-49 ask a court to resolve the dispute. In addition to your personal cost in
11-1 mediation or arbitration, or to prosecute a lawsuit, you may be responsible
11-2 for paying your share of the association’s cost in defending against your
11-3 claim. There is no government agency in this state that investigates or
11-4 intervenes to resolve disputes in homeowner’s associations.
11-5 5. YOU ARE REQUIRED TO PROVIDE PROSPECTIVE BUYERS
11-6 OF YOUR PROPERTY WITH INFORMATION ABOUT LIVING IN
11-7 YOUR COMMON-INTEREST COMMUNITY?
11-8 The law requires you to provide to a prospective purchaser of your
11-9 property, before you enter into a purchase agreement[, a] :
11-10 (a) A copy of the community’s governing documents, including the
11-11 C, C & R’s, association bylaws, and rules and regulations, as well as a
11-12 copy of this document. [You are also required to provide a]
11-13 (b) A copy of the association’s current financial statement, operating
11-14 budget and information regarding the amount of the monthly assessment
11-15 for common expenses, including the amount set aside as reserves for the
11-16 repair, replacement and restoration of common elements. [You are also
11-17 required to inform prospective purchasers]
11-18 (c) A statement setting forth any other fees payable by a unit’s owner
11-19 and any unpaid assessment or fine that the purchaser will be obligated to
11-20 pay.
11-21 (d) A statement listing all written notices of a violation of the
11-22 governing documents of the association associated with the unit which
11-23 the association has previously provided to you and which the purchaser
11-24 will be obligated to correct or repair.
11-25 (e) A statement of any outstanding judgments or [lawsuits pending
11-26 against] pending legal actions to which the association [of which you are
11-27 aware. You are also required to provide a] is a party and the status of such
11-28 pending legal actions.
11-29 (f) A statement of any pending claims submitted to arbitration or
11-30 mediation to which the association is a party.
11-31 (g) A statement of any claim for a constructional defect of which the
11-32 association has actual knowledge and for which the association will be a
11-33 party.
11-34 (h) A copy of the minutes from the most recent meeting of the
11-35 homeowner’s association or its executive board.
11-36 For more information regarding these requirements, see Nevada Revised
11-37 Statutes 116.4103[.] and 116.4109.
11-38 6. YOU HAVE CERTAIN RIGHTS REGARDING OWNERSHIP IN
11-39 A COMMON-INTEREST COMMUNITY THAT ARE GUARANTEED
11-40 YOU BY THE STATE?
11-41 Pursuant to provisions of chapter 116 of Nevada Revised Statutes, you
11-42 have the right:
11-43 (a) To be notified of all meetings of the association and its executive
11-44 board, except in cases of emergency.
11-45 (b) To attend and speak at all meetings of the association and its
11-46 executive board, except in some cases where the executive board is
11-47 authorized to meet in closed, executive session.
11-48 (c) To request a special meeting of the association upon petition of at
11-49 least 10 percent of the homeowners.
12-1 (d) To inspect, examine, photocopy and audit financial and other
12-2 records of the association.
12-3 (e) To be notified of all changes in the community’s rules and
12-4 regulations and other actions by the association or board that affect you.
12-5 7. QUESTIONS?
12-6 Although they may be voluminous, you should take the time to read and
12-7 understand the documents that will control your ownership of a property in
12-8 a common-interest community. You may wish to ask your real estate
12-9 professional, lawyer or other person with experience to explain anything
12-10 you do not understand. You may also request assistance from the
12-11 ombudsman for owners in common-interest communities, Nevada Real
12-12 Estate Division, at (telephone number).
12-13 Buyer or prospective buyer’s initials: ______
12-14 Date: ______
12-15 Sec. 8. Chapter 119A of NRS is hereby amended by adding thereto
12-16 the provisions set forth as sections 9 to 31, inclusive, of this act.
12-17 Sec. 9. “Affiliate of the manager” means any person who controls,
12-18 is controlled by or is under common control with a manager, including a
12-19 person who:
12-20 1. Is a general partner, officer, director or employer of the manager;
12-21 2. Directly or indirectly or acting in concert with one or more
12-22 persons, or through one or more subsidiaries, owns, controls, or holds
12-23 with the power to vote more than 20 percent of the voting interest in the
12-24 manager;
12-25 3. Controls the election of a majority of the directors of the
12-26 manager; or
12-27 4. Has contributed more than 20 percent of the capital of the
12-28 manager.
12-29 Sec. 10. “Association” means an association of owners established
12-30 pursuant to NRS 119A.520.
12-31 Sec. 11. “Board” means the governing body designated in a time-
12-32 share instrument to act on behalf of an association.
12-33 Sec. 12. “Common area” means those portions of a project other
12-34 than the units. The term includes any easement which benefits the
12-35 project.
12-36 Sec. 13. “Developer’s reserved rights” means any right reserved in a
12-37 time-share instrument for the benefit of the developer, the exercise of
12-38 which does not require a vote of the other owners.
12-39 Sec. 14. “Limited common area” means a portion of the common
12-40 area allocated by a time-share instrument for the exclusive use of at least
12-41 one, but not all, of the units in a project.
12-42 Sec. 15. “Manager” means a person who undertakes, directly or
12-43 indirectly, the duties, responsibilities and obligations of managing, in
12-44 whole or in part, a time-share plan or a project, or both, in accordance
12-45 with an agreement entered into pursuant to NRS 119A.530.
12-46 Sec. 16. “Permanent identifying number” means a series of
12-47 numbers or letters, or any combination thereof, which identifies, for the
12-48 duration of a time-share plan, one time share in the plan.
13-1 Sec. 17. “Time-share plan” means the rights to time shares and the
13-2 obligations and interests appurtenant thereto created by a time-share
13-3 instrument.
13-4 Sec. 18. 1. A building code may not impose any requirements upon
13-5 any structure in a project which it would not impose upon a physically
13-6 identical development under a different form of ownership.
13-7 2. Except as otherwise provided in subsection 1, the provisions of this
13-8 chapter do not invalidate or modify any provision of any building code or
13-9 zoning, subdivision or other law, ordinance, rule or regulation governing
13-10 the use of real estate.
13-11 Sec. 19. 1. Except as otherwise provided in subsection 2 and
13-12 subject to the provisions of the time-share instrument and other
13-13 provisions of law, a developer may, with the prior approval of the
13-14 division, relocate the boundaries between adjoining units by amending
13-15 the provisions of the time-share instrument and any recorded map or plat
13-16 relating thereto.
13-17 2. A developer may relocate the boundaries between adjoining units
13-18 without the prior approval of the division if:
13-19 (a) The relocation is necessary to comply with the law; or
13-20 (b) No time share attributable to either of the adjoining units is owned
13-21 by a purchaser.
13-22 Sec. 20. The provisions of this chapter and chapter 645 of NRS
13-23 relating to real estate brokers and sales agents do not apply to an owner,
13-24 other than a developer, who, for compensation, refers prospective
13-25 purchasers to a developer or an employee or agent of the developer, if the
13-26 owner:
13-27 1. Refers to the developer or an employee or agent of the developer,
13-28 or any combination thereof, not more than 20 prospective purchasers
13-29 within any 1 calendar year; and
13-30 2. Does not show a unit to the prospective purchaser, discuss with the
13-31 prospective purchaser the terms and conditions of the purchase or
13-32 otherwise participate in negotiations relating to the sale of the time
13-33 share.
13-34 Sec. 21. If a time-share instrument authorizes the developer to
13-35 withdraw units from the time-share plan, any unit that is subject to
13-36 withdrawal may not be withdrawn if a time share attributable to that unit
13-37 is owned by a purchaser.
13-38 Sec. 22. A description of a time share is a legally sufficient
13-39 description of the time share and all rights, obligations and interests
13-40 appurtenant to that time share that were created by the time-share plan if
13-41 the description includes, without limitation:
13-42 1. The name under which the time-share plan is registered with the
13-43 division;
13-44 2. The county in which the project is located;
13-45 3. Information which indicates where the time-share instruments are
13-46 recorded; and
13-47 4. The permanent identifying number of the time share as set forth
13-48 in the time-share instruments.
14-1 Sec. 23. 1. Except as otherwise provided in this section, a time-
14-2 share instrument may provide for a period of the developer’s control of
14-3 an association during which the developer, or a person designated by
14-4 him, may appoint and remove the officers of the association and the
14-5 members of the board. Regardless of the period provided in the time-
14-6 share instrument, the period of the developer’s control of the association
14-7 terminates no later than:
14-8 (a) One hundred and twenty days after conveyance of 80 percent of
14-9 the time shares that may be created by the time-share instrument to
14-10 owners other than the developer;
14-11 (b) Five years after the developer has ceased to offer time shares for
14-12 sale in the ordinary course of business; or
14-13 (c) Five years after any right to add new time shares was last
14-14 exercised,
14-15 whichever occurs earlier.
14-16 2. A developer may voluntarily surrender the right to appoint and
14-17 remove officers and members of the board before the end of the period
14-18 provided for in subsection 1 by executing and recording with the time-
14-19 share instrument a written instrument declaring the surrender. If such
14-20 an instrument is recorded, the developer may require that, for the
14-21 duration of the period of the developer’s control, specified actions of the
14-22 association or board, as described in the recorded instrument, be
14-23 approved by the developer before they become effective.
14-24 3. Not later than 60 days after conveyance of 25 percent of the time
14-25 shares that may be created pursuant to the time-share instrument to
14-26 owners other than the developer, at least one member and not less than
14-27 25 percent of the members of the board must be elected by owners other
14-28 than the developer. Not later than 60 days after conveyance of 50 percent
14-29 of the time shares that may be created pursuant to the time-share
14-30 instrument to owners other than the developer, not less than
14-31 33 1/3 percent of the members of the board must be elected by owners
14-32 other than the developer.
14-33 Sec. 24. 1. Notwithstanding any provision of a time-share
14-34 instrument or the bylaws of an association to the contrary, the owners, by
14-35 a two-thirds vote of all persons present, in person or by proxy, who are
14-36 entitled to vote at any meeting of the owners at which a quorum is
14-37 present, may remove any member of the board, with or without cause,
14-38 other than a member appointed by the developer.
14-39 2. If a member of the board is sued for liability for actions
14-40 undertaken in his role as a member of the board, the association shall
14-41 indemnify him for his losses or claims, and undertake all costs of
14-42 defense, unless it is proven that he acted with willful or wanton
14-43 misfeasance or with gross negligence. After such proof, the association is
14-44 no longer liable for the costs of defense, and may recover from the
14-45 member of the board who so acted, costs already expended. Members of
14-46 the board are not personally liable to the victims of crimes occurring on
14-47 the project. Punitive damages may not be recovered against the
14-48 association, but may be recovered from persons whose activity gave rise
14-49 to the damages.
15-1 Sec. 25. 1. Unless the bylaws of an association specify a larger
15-2 percentage, a quorum is present throughout any meeting of the
15-3 association if persons entitled to cast 10 percent of the votes that may be
15-4 cast are present in person or by proxy at the beginning of the meeting.
15-5 2. Unless the bylaws of an association provide otherwise, a quorum
15-6 shall be deemed to be present throughout a meeting of the board if
15-7 persons entitled to cast a majority of the votes on that board are present
15-8 at the beginning of the meeting.
15-9 Sec. 26. 1. The board of an association shall:
15-10 (a) Cause to be conducted at least once every 5 years, a study of the
15-11 reserves required to repair, replace and restore the major components of
15-12 the project;
15-13 (b) Review the results of that study at least annually to determine if
15-14 those reserves are sufficient; and
15-15 (c) Make any adjustments it deems necessary to maintain the required
15-16 reserves.
15-17 2. The study required by subsection 1 must be conducted by a person
15-18 qualified by training and experience to conduct such a study, including a
15-19 member of the board or the manager of the time-share plan or the
15-20 project, or both, who is so qualified. The study must include, without
15-21 limitation:
15-22 (a) A summary of an inspection of the major components of the
15-23 project;
15-24 (b) An identification of the major components of the project which
15-25 have a remaining useful life of less than 30 years;
15-26 (c) An estimate of the remaining useful life of each major component
15-27 identified pursuant to paragraph (b);
15-28 (d) An estimate of the cost of repair, replacement or restoration of
15-29 each major component identified pursuant to paragraph (b) during and
15-30 at the end of its useful life; and
15-31 (e) An estimate of the total annual assessment that may be required to
15-32 cover the cost of repairing, replacing or restoring the major components
15-33 identified pursuant to paragraph (b), after subtracting the reserves of the
15-34 association as of the date of the study.
15-35 3. The administrator shall adopt by regulation the qualifications
15-36 required for conducting a study required by subsection 1.
15-37 Sec. 27. An association, upon the receipt of a written request, shall
15-38 furnish to an owner or any lender who has a security interest in a time
15-39 share or the project, a statement setting forth the amount of unpaid
15-40 assessments made against the owner’s time share. The statement must be
15-41 furnished within 10 business days after receipt of the request and is
15-42 binding on the association, the board and every owner.
15-43 Sec. 28. A developer’s reserved rights may include, without
15-44 limitation, the right to:
15-45 1. Add units or real estate to, and withdraw units or real estate from,
15-46 a time-share plan.
15-47 2. Create units, a common area or a limited common area within the
15-48 project.
15-49 3. Subdivide units or convert units into a common area.
16-1 4. Make and complete improvements to the project.
16-2 5. Maintain sales offices, management offices and signs for
16-3 advertising the time-share plan, project and models.
16-4 6. Enter into a subsidy agreement with the association in lieu of
16-5 paying the assessments allocated to the time shares owned by the
16-6 developer.
16-7 7. Provide for the establishment of a master association, as defined
16-8 in NRS 116.110358.
16-9 8. Merge or consolidate a time-share plan with another time-share
16-10 plan which has the same form of ownership.
16-11 9. Relocate boundaries between adjoining units in accordance with
16-12 the provisions of this chapter.
16-13 Sec. 29. 1. A person who wishes to engage in the business of, act
16-14 in the capacity of, advertise or assume to act as a manager shall register
16-15 with the division on a form prescribed by the division.
16-16 2. The form for registration must include, without limitation:
16-17 (a) The registered name of the time-share plan or the project, or both,
16-18 that the manager will manage;
16-19 (b) The address and telephone number of the manager’s principal
16-20 place of business;
16-21 (c) The social security number of the manager; and
16-22 (d) The name of the manager’s responsible managing employee.
16-23 3. The form for registration must be accompanied by:
16-24 (a) Satisfactory evidence, acceptable to the division, that the manager
16-25 and his employees have obtained fidelity bonds in accordance with
16-26 regulations adopted by the division; and
16-27 (b) The statement required pursuant to NRS 119A.263.
16-28 4. The division may collect a fee for registering a manager in an
16-29 amount not to exceed the administrative costs of registering the manager.
16-30 5. As used in this section, “responsible managing employee” means
16-31 the person designated by the manager to:
16-32 (a) Make technical and administrative decisions in connection with
16-33 the manager’s business; and
16-34 (b) Hire, superintend, promote, transfer, lay off, discipline or
16-35 discharge other employees or recommend such action on behalf of the
16-36 manager.
16-37 Sec. 30. 1. A manager who enters into or renews an agreement
16-38 that must comply with the provisions of subsection 3 of NRS 119A.530
16-39 shall submit to the association and to the division a disclosure statement
16-40 that contains a description of any arrangement made by the manager or
16-41 an affiliate of the manager relating to:
16-42 (a) The resale of time shares on behalf of the association or its
16-43 members;
16-44 (b) Actions taken for the collection of assessments and the foreclosure
16-45 of liens on behalf of the association or its members;
16-46 (c) The exchange or rental of time shares owned by the association or
16-47 its members; and
17-1 (d) The use of the names of the members of the association for
17-2 purposes unrelated to the duties of the association as set forth in the
17-3 time-share instrument and this chapter.
17-4 2. The disclosure statement must be:
17-5 (a) Submitted annually at a time designated by the administrator and
17-6 at least 120 days before any date on which the agreement is
17-7 automatically renewed.
17-8 (b) Signed by the manager or an authorized representative of the
17-9 manager under penalty of perjury.
17-10 3. The administrator shall adopt regulations prescribing the form
17-11 and contents of the disclosure statements required by this section.
17-12 Sec. 31. 1. It is unlawful for any person to display or deliver to
17-13 prospective purchasers of time shares promotional material that
17-14 describes or portrays an improvement that has not been made to the
17-15 project unless the improvement is conspicuously labeled or identified
17-16 with the phrase “MUST BE BUILT” or “NEED NOT BE BUILT” or
17-17 with other similar language approved by the division.
17-18 2. A developer shall construct and complete any improvement to a
17-19 project that is described or portrayed in promotional material for the sale
17-20 of time shares unless the improvement is labeled or identified as
17-21 “NEED NOT BE BUILT” or with other similar language approved by
17-22 the division.
17-23 Sec. 32. NRS 119A.010 is hereby amended to read as follows:
17-24 119A.010 As used in this chapter, unless the context otherwise
17-25 requires, the words and terms defined in NRS 119A.020 to 119A.160,
17-26 inclusive, and sections 9 to 17, inclusive, of this act, have the meanings
17-27 ascribed to them in those sections.
17-28 Sec. 33. NRS 119A.030 is hereby amended to read as follows:
17-29 119A.030 [“Affiliate”] “Affiliate of the developer” means any person
17-30 who controls, is controlled by or is under common control with a
17-31 developer, including a person who:
17-32 1. Is a general partner, officer, director or employer of the developer;
17-33 2. Directly or indirectly or acting in concert with one or more other
17-34 persons, or through one or more subsidiaries, owns, controls, holds with
17-35 the power to vote, or holds proxies representing more than 20 percent of
17-36 the voting interest in the developer;
17-37 3. Controls the election of a majority of the directors of the
17-38 developer; or
17-39 4. Has contributed more than 20 percent of the capital of the
17-40 developer.
17-41 Sec. 34. NRS 119A.056 is hereby amended to read as follows:
17-42 119A.056 “Owner” means a [purchaser who is the equitable or legal
17-43 owner of a time share.] person, including a developer, who has an
17-44 equitable or legal interest in a time share. The term does not include a
17-45 person who has an interest in a time share solely as security for an
17-46 obligation.
18-1 Sec. 35. NRS 119A.080 is hereby amended to read as follows:
18-2 119A.080 “Project” means the real property [in which time shares are
18-3 created by a single instrument or set of instruments.] which, in whole or in
18-4 part, is the subject of a time-share plan.
18-5 Sec. 36. NRS 119A.090 is hereby amended to read as follows:
18-6 119A.090 “Project broker” means any person who coordinates the sale
18-7 of time shares for a time-share [project] plan and to whom sales agents and
18-8 representatives are responsible.
18-9 Sec. 37. NRS 119A.100 is hereby amended to read as follows:
18-10 119A.100 “Public offering statement” means a report, issued by the
18-11 administrator pursuant to the provisions of this chapter, which authorizes a
18-12 developer to offer to sell or sell time shares in the [project] time-share plan
18-13 which is the subject of the report.
18-14 Sec. 38. NRS 119A.140 is hereby amended to read as follows:
18-15 119A.140 “Time share” means the right to use and occupy a unit on a
18-16 recurrent periodic basis according to an arrangement allocating this right
18-17 among various [time-share] owners whether or not there is an additional
18-18 charge to the [time-share] owner for occupying the unit.
18-19 Sec. 39. NRS 119A.160 is hereby amended to read as follows:
18-20 119A.160 “Unit” means that portion of a project which is designated
18-21 for separate [use.] occupancy.
18-22 Sec. 40. NRS 119A.170 is hereby amended to read as follows:
18-23 119A.170 1. The provisions of this chapter, except subsection 4, do
18-24 not apply to:
18-25 (a) The sale of 12 or fewer time shares in a [time-share] project or the
18-26 sale of 12 or fewer time shares in the same subdivision;
18-27 (b) The sale or transfer of a time share by an owner who is not the
18-28 developer, unless the time share is sold in the ordinary course of business
18-29 of that owner;
18-30 (c) Any transfer of a time share [by] :
18-31 (1) By deed in lieu of foreclosure [or as a result of foreclosure of the
18-32 time share;] ;
18-33 (2) At a foreclosure sale; or
18-34 (3) By the resale of a time share that has been acquired by an
18-35 association by deed in lieu of foreclosure or at a foreclosure sale;
18-36 (d) A gratuitous transfer of a time share;
18-37 (e) A transfer by devise or descent or a transfer to an inter vivos trust; or
18-38 (f) The sale or transfer of the right to use and occupy a unit on a
18-39 periodic basis which recurs over a period of less than 5 years,
18-40 unless the method of disposition is adopted [for the purpose of evading] to
18-41 evade the provisions of this chapter[.] or chapter 645 of NRS.
18-42 2. Any campground or developer [which] who is subject to the
18-43 requirements of chapter 119B of NRS and complies with those provisions
18-44 is not required to comply with the provisions of this chapter.
18-45 3. The division may [from time to time, pursuant to regulations
18-46 adopted by it, exempt from any of the provisions] waive any provision of
18-47 this chapter [any other sale, transfer or disposition of a time share] if it
18-48 finds that the enforcement of [this chapter with respect to such a
19-1 transaction] that provision is not necessary in the public interest [and] or
19-2 for the protection of purchasers.
19-3 4. The provisions of chapter 645 of NRS apply to the sale of time
19-4 shares, except any sale of a time share to which this chapter applies, and
19-5 for that purpose the terms “real property” and “real estate” as used in
19-6 chapter 645 of NRS shall be deemed to include a time share, whether it is
19-7 an interest in real property or merely a contractual right to occupancy.
19-8 Sec. 41. NRS 119A.180 is hereby amended to read as follows:
19-9 119A.180 1. A [time-share owner] purchaser shall not be deemed to
19-10 hold an investment contract, nor shall his purchase be considered risk
19-11 capital, because income derived from the [time-share] project and any
19-12 personal property available for use by the [time-share owner] purchaser in
19-13 conjunction therewith reduces the assessment for time-share expenses, if
19-14 the income inures directly to the benefit of the association and not to his
19-15 direct benefit.
19-16 2. An interest in a time share is not a security under the provisions of
19-17 chapter 90 of NRS.
19-18 Sec. 42. NRS 119A.200 is hereby amended to read as follows:
19-19 119A.200 Time shares , [and] time-share plans and projects to which
19-20 this chapter applies are subject to licensing by local governments for
19-21 revenue but not for regulation.
19-22 Sec. 42.5. NRS 119A.250 is hereby amended to read as follows:
19-23 119A.250 1. [All registrations] The registration of a representative
19-24 issued pursuant to this chapter [expire] expires 1 year after [their] its
19-25 issuance.
19-26 2. Each representative who submits the statement required pursuant to
19-27 NRS 119A.263 and meets the requirements for renewal adopted by the
19-28 division may renew his registration upon the payment of the annual
19-29 renewal fee before the expiration of his registration.
19-30 3. If a representative fails to pay the annual renewal fee before the
19-31 expiration of his registration, the registration may be reinstated upon the
19-32 submission of the statement and payment of the reinstatement fee in
19-33 addition to the annual renewal fee. A registration may be reinstated under
19-34 this subsection only if the statement is submitted and the fees are paid
19-35 within 1 year after the registration expires.
19-36 4. A representative issued a registration shall not change his
19-37 association to another developer or change his location with the same
19-38 developer unless he has obtained from the division a transfer of his
19-39 registration for its unexpired term. An application to the division for the
19-40 transfer of his registration for the unexpired term must be accompanied by
19-41 the fee specified in NRS 119A.360 for the transfer of registration.
19-42 Sec. 43. NRS 119A.260 is hereby amended to read as follows:
19-43 119A.260 1. A representative shall not negotiate or make
19-44 representations concerning the merits or value of a time-share plan or a
19-45 project. He may only induce and solicit persons to attend promotional
19-46 meetings for the sale of time shares and distribute information [approved
19-47 by the division.] on behalf of a developer.
20-1 2. The representative’s activities must strictly conform to the methods
20-2 for the procurement of prospective purchasers which have been approved
20-3 by the division.
20-4 3. The representative shall comply with the same standards for
20-5 conducting business as are applied to real estate brokers and salesmen
20-6 pursuant to chapter 645 of NRS and the regulations adopted pursuant
20-7 thereto.
20-8 4. A representative shall not make targeted solicitations of
20-9 purchasers or prospective purchasers of time shares in another project. A
20-10 developer or project broker shall not pay or offer to pay a representative
20-11 a bonus or other type of special compensation to engage in such activity.
20-12 Sec. 44. NRS 119A.263 is hereby amended to read as follows:
20-13 119A.263 1. An applicant for the issuance or renewal of a sales
20-14 agent’s license or registration as a representative or manager shall submit
20-15 to the administrator the statement prescribed by the welfare division of the
20-16 department of human resources pursuant to NRS 425.520. The statement
20-17 must be completed and signed by the applicant.
20-18 2. The administrator shall include the statement required pursuant to
20-19 subsection 1 in:
20-20 (a) The application or any other forms that must be submitted for the
20-21 issuance or renewal of the license or registration; or
20-22 (b) A separate form prescribed by the administrator.
20-23 3. A sales agent’s license or registration as a representative or
20-24 manager may not be issued or renewed by the administrator if the
20-25 applicant:
20-26 (a) Fails to complete or submit the statement required pursuant to
20-27 subsection 1; or
20-28 (b) Indicates on the statement submitted pursuant to subsection 1 that he
20-29 is subject to a court order for the support of a child and is not in
20-30 compliance with the order or a plan approved by the district attorney or
20-31 other public agency enforcing the order for the repayment of the amount
20-32 owed pursuant to the order.
20-33 4. If an applicant indicates on the statement submitted pursuant to
20-34 subsection 1 that he is subject to a court order for the support of a child and
20-35 is not in compliance with the order or a plan approved by the district
20-36 attorney or other public agency enforcing the order for the repayment of
20-37 the amount owed pursuant to the order, the administrator shall advise the
20-38 applicant to contact the district attorney or other public agency enforcing
20-39 the order to determine the actions that the applicant may take to satisfy the
20-40 arrearage.
20-41 Sec. 45. NRS 119A.266 is hereby amended to read as follows:
20-42 119A.266 1. If the administrator receives a copy of a court order
20-43 issued pursuant to NRS 425.540 that provides for the suspension of all
20-44 professional, occupational and recreational licenses, certificates and
20-45 permits issued to a person who has been issued a sales agent’s license or
20-46 has been registered as a representative [,] or manager, the administrator
20-47 shall deem the license or registration to be suspended at the end of the
20-48 30th day after the date on which the court order was issued unless the
20-49 administrator receives a letter issued to the holder of the license or
21-1 registration by the district attorney or other public agency pursuant to NRS
21-2 425.550 stating that the holder of the license or registration has complied
21-3 with the subpoena or warrant or has satisfied the arrearage pursuant to
21-4 NRS 425.560.
21-5 2. The administrator shall reinstate a sales agent’s license or the
21-6 registration of a representative or manager that has been suspended by a
21-7 district court pursuant to NRS 425.540 if the administrator receives a letter
21-8 issued by the district attorney or other public agency pursuant to NRS
21-9 425.550 to the person whose license or registration was suspended stating
21-10 that the person whose license or registration was suspended has complied
21-11 with the subpoena or warrant or has satisfied the arrearage pursuant to
21-12 NRS 425.560.
21-13 Sec. 46. NRS 119A.300 is hereby amended to read as follows:
21-14 119A.300 Except as otherwise provided in NRS 119A.310, the
21-15 administrator shall issue a public offering statement and a permit to sell
21-16 time shares to each applicant who:
21-17 1. Submits an application, in the manner provided by the division,
21-18 which includes:
21-19 (a) The name and address of the project broker;
21-20 (b) A copy of [the document in which the time-share project is created;]
21-21 each time-share instrument that relates to the time-share plan;
21-22 (c) A preliminary title report for the [time-share] project and copies of
21-23 the documents listed as exceptions in the report;
21-24 (d) Copies of any other documents which relate to the time-share plan
21-25 or the project, including any contract, agreement or other document to be
21-26 used to establish and maintain an association [of time-share owners] and to
21-27 provide for the management of the time-share plan or the project[;] , or
21-28 both;
21-29 (e) Copies of instructions for escrow, deeds, sales contracts and any
21-30 other documents that will be used in the sale of the time shares;
21-31 (f) A copy of any proposed trust agreement which establishes a trust for
21-32 the time-share plan or the project[;] , or both;
21-33 (g) Documents which show the current assessments for property taxes
21-34 on the [time-share] project;
21-35 (h) Documents which show compliance with local zoning laws;
21-36 (i) If the units [in the time-share project] which are the subject of the
21-37 time-share plan are in a condominium project, or other form of
21-38 [community] common-interest ownership of property, documents which
21-39 show that use of the units [in a time-share project] is in compliance with
21-40 the documents which created the [community] common-interest
21-41 ownership;
21-42 (j) Copies of all documents which will be given to a purchaser who is
21-43 interested in participating in a program for the exchange of occupancy
21-44 rights among [time-share] owners and copies of the documents which show
21-45 acceptance of the time-share [project] plan in such a program;
21-46 (k) A copy of the budget or a projection of the operating expenses of the
21-47 association, if applicable;
21-48 (l) A financial statement of the developer; and
21-49 (m) Such other information as the division, by regulation, requires; and
22-1 2. Pays the fee provided for in this chapter.
22-2 Sec. 47. NRS 119A.305 is hereby amended to read as follows:
22-3 119A.305 The terms and conditions of the documents and agreements
22-4 submitted pursuant to NRS 119A.300 which relate to the creation and
22-5 management of the time-share [project] plan and to the sale of time shares
22-6 and to which the applicant or an affiliate of the applicant is a party must be
22-7 described in the public offering statement and constitute additional terms
22-8 and conditions of the applicant’s permit to sell time shares.
22-9 Sec. 48. NRS 119A.310 is hereby amended to read as follows:
22-10 119A.310 1. The administrator shall deny an application for a permit
22-11 to sell time shares if he finds that:
22-12 (a) The developer failed to comply with any of the provisions of this
22-13 chapter or the regulations adopted by the division; or
22-14 (b) The developer, any [of its affiliates] affiliate of the developer or any
22-15 officer of the developer or an affiliate[,] of the developer, has:
22-16 (1) Been convicted of or pleaded nolo contendere to forgery,
22-17 embezzlement, obtaining money under false pretenses, larceny, extortion,
22-18 conspiracy to defraud or other crime involving moral turpitude;
22-19 (2) Been the subject of a judgment in any civil or administrative
22-20 action, including a proceeding to revoke or suspend a license, involving
22-21 fraud or dishonesty;
22-22 (3) Been permanently enjoined by a court of competent jurisdiction
22-23 from selling real estate, time shares or securities in an unlawful manner;
22-24 (4) Had a registration as a broker-dealer in securities or a license to
22-25 act as a real estate broker or salesman, project broker or sales agent
22-26 revoked;
22-27 (5) Been convicted of or pleaded nolo contendere to selling time
22-28 shares without a license; or
22-29 (6) Had a permit to sell time shares, securities or real estate revoked.
22-30 2. The administrator may deny an application for a permit to sell time
22-31 shares if he finds that the developer, or any [of its affiliates,] affiliate of the
22-32 developer, has failed to offer satisfactory proof that it has a good reputation
22-33 for honesty, trustworthiness, integrity and competence to transact the
22-34 business of a developer in a manner which safeguards the interests of the
22-35 public.
22-36 3. The burden of proof is on the developer to establish to the
22-37 satisfaction of the division that [it] he is qualified to receive a license.
22-38 Sec. 49. NRS 119A.340 is hereby amended to read as follows:
22-39 119A.340 If a [time-share] project has not been completed before the
22-40 issuance of a permit to sell time shares, the permit must state the estimated
22-41 date of completion and:
22-42 1. The developer shall deliver to the agency a bond in an amount and
22-43 upon terms approved by the division to assure completion of the [time-
22-44 share] project free of any liens, which is payable to the division for the
22-45 benefit of the purchasers of the time-share property and which remains in
22-46 effect until the [time-share] project is completed free of all liens;
22-47 2. A cash deposit to cover the estimated costs of completing the [time-
22-48 share] project must be deposited with an escrow agent under an agreement
22-49 which is approved by the division; or
23-1 3. [Any] The developer shall make any other arrangement which is
23-2 approved by the division.
23-3 Sec. 50. NRS 119A.355 is hereby amended to read as follows:
23-4 119A.355 1. A permit must be renewed annually by the developer by
23-5 filing an application with and paying the fee for renewal to the
23-6 administrator. The application must be filed and the fee paid not later than
23-7 30 days before the date on which the permit expires. The application must
23-8 include the budget of the association [of time-share owners or the budget of
23-9 the developer, if there is no association,] and any change that has occurred
23-10 in the information previously provided to the administrator or in a
23-11 statement of disclosure provided to a prospective purchaser pursuant to the
23-12 provisions of NRS 119A.400.
23-13 2. The renewal is effective on the 30th day after the filing of the
23-14 application unless the administrator:
23-15 (a) Denies the renewal pursuant to NRS 119A.654 or for any other
23-16 reason;
23-17 (b) Approves the renewal on an earlier date.
23-18 Sec. 50.5. NRS 119A.360 is hereby amended to read as follows:
23-19 119A.360 1. The division shall collect the following fees at such
23-20 times and upon such conditions as it may provide by regulation:
23-21 Application fee for preliminary permit to sell time shares................................................................ $250
23-22 Application fee for registration of representative 65
23-23 For renewal of registration of representative. 65
23-24 Application fee for transfer of registration of representative to
23-25 different developer or location..................... 20
23-26 For reinstatement of registration of representative 25
23-27 For each permit to sell time shares, per subdivision 500
23-28 For each amendment to a public offering statement after the
23-29 issuance of the report................................ 100
23-30 For renewal of a permit............................. 500
23-31 2. Each developer shall pay an additional fee for each time share he
23-32 sells in a time-share [project] plan over 50 pursuant to the following
23-33 schedule:
23-34 Amount to be
23-35 Number of time shares paid per time share
23-36 51-250............................................ $5.00
23-37 251-500............................................. 4.00
23-38 501-750............................................. 3.00
23-39 751-1500............................................. 2.50
23-40 over 1500............................................. 1.00
23-41 3. Except for the fees relating to the registration of a representative, the
23-42 administrator may reduce the fees established by this section if the
23-43 reduction is equitable in relation to the costs of carrying out the provisions
23-44 of this chapter.
24-1 Sec. 51. NRS 119A.370 is hereby amended to read as follows:
24-2 119A.370 1. A time share must not be advertised or offered for sale
24-3 within this state until the advertisement or offering is [approved by] filed
24-4 with the division.
24-5 2. Each [advertisement must contain the processing number assigned
24-6 to it by the division.
24-7 3. Each application for the approval of advertising] such filing must:
24-8 (a) Include the form and content of advertising to be used;
24-9 (b) Include the nature of the offer of gifts or other free benefits to be
24-10 extended;
24-11 (c) Include the nature of promotional meetings involving any person or
24-12 act described in NRS 119A.300; and
24-13 (d) Be accompanied by a filing fee of not more than $200, to be
24-14 established by the division.
24-15 [4. The division shall render a decision upon an application for the
24-16 approval of advertising or an offer for sale within 30 days after the date the
24-17 application is filed.]
24-18 Sec. 52. NRS 119A.380 is hereby amended to read as follows:
24-19 119A.380 1. Each time-share [project] plan must be created by [a
24-20 time-share instrument which provides:
24-21 1.] one or more time-share instruments.
24-22 2. A time-share instrument must provide:
24-23 (a) A legal description and the physical address of the [time-share
24-24 project;
24-25 2.] project;
24-26 (b) The name [and location] of the time-share [project;
24-27 3.] plan;
24-28 (c) A system [of identification of the time periods by letter, name,
24-29 number or any combination thereof;
24-30 4.] for establishing the permanent identifying numbers of the time
24-31 shares;
24-32 (d) For assessment of the expenses of the time-share [project] plan and
24-33 an allocation of those expenses among the time shares [and the] ;
24-34 (e) The voting rights which are assigned to each time share;
24-35 [5. A]
24-36 (f) If applicable, the procedure to add units and other real estate to ,
24-37 and to withdraw units and other real estate from, the time-share [project;
24-38 6.] plan, and the method of reallocating expenses among the time
24-39 shares after any such addition or withdrawal;
24-40 (g) The maximum number of time shares that may be created under
24-41 the time-share plan;
24-42 (h) For selection of the trustee for insurance which is required to be
24-43 maintained by the association or the developer;
24-44 [7.] (i) For maintenance of the [time-share units;
24-45 8.] units;
24-46 (j) For management of the time-share [project;
24-47 9.] plan;
24-48 (k) A procedure to amend the time-share instrument; and
25-1 [10.] (l) The rights of the purchaser relating to the occupancy of the
25-2 [time-share] unit.
25-3 3. A time-share instrument may provide for:
25-4 (a) The developer’s reserved rights;
25-5 (b) Cumulative voting, but only for the purpose of electing the
25-6 members of the board; and
25-7 (c) The establishment of:
25-8 (1) Separate voting classes based on the size or type of unit to which
25-9 the votes are allocated; and
25-10 (2) A separate voting class for the developer during the period in
25-11 which the developer is in control.
25-12 4. The provisions of a time-share instrument are severable.
25-13 5. The rule against perpetuities and NRS 111.103 to 111.1039,
25-14 inclusive, do not apply to defeat any provisions of a time-share
25-15 instrument.
25-16 Sec. 53. NRS 119A.430 is hereby amended to read as follows:
25-17 119A.430 Escrow may not be closed unless the developer has
25-18 provided satisfactory evidence to the administrator that:
25-19 1. The project is free and clear of any blanket encumbrance;
25-20 2. Each person who holds an interest in the blanket encumbrance has
25-21 executed an agreement, approved by the administrator, to subordinate his
25-22 rights to the rights of the purchaser;
25-23 3. Title to the [time-share] project has been conveyed to a trustee;
25-24 4. All holders of a lien recorded against the project have recorded an
25-25 instrument providing for the release and reconveyance of each time share
25-26 from the lien upon the payment of a specified sum or the performance of a
25-27 specified act;
25-28 5. [He] The developer has obtained and recorded [a] one or more
25-29 binding nondisturbance [agreement] agreements acceptable to the
25-30 administrator, that:
25-31 (a) Are executed by [himself and] the developer, all holders of a lien
25-32 recorded against the project [which provides that subsequent owners or
25-33 foreclosing holders of a lien take title to the project subject to the rights of
25-34 prior purchasers provided in the contracts] and any other person whose
25-35 interest in the project could defeat the rights or interests of any
25-36 purchaser under the time-share instrument or contract of sale; and
25-37 (b) Provide that any person whose interest in the project could defeat
25-38 the rights or interests of any purchaser under the time-share instrument
25-39 or contract of sale takes title to the project subject to the rights of the
25-40 purchasers; or
25-41 6. Alternative arrangements have been made which are adequate to
25-42 protect the rights of the purchasers of the time shares and approved by the
25-43 administrator.
25-44 Sec. 54. NRS 119A.450 is hereby amended to read as follows:
25-45 119A.450 1. A contract for the sale of a time share or any other
25-46 evidence of an obligation to purchase a time share must provide in 12-point
25-47 bold type that the purchaser is relieved of all obligations under the contract
25-48 if his interests are defeated because of the foreclosure of liens against the
25-49 project. The provisions of this subsection do not apply to any [time-share]
26-1 project which meets any one of the requirements of subsections 1 to 5,
26-2 inclusive, of NRS 119A.430.
26-3 2. If a developer or owner is in default on a blanket encumbrance, he
26-4 may not sell or pledge any of the notes or contracts of sale given in
26-5 payment of the time shares purchased from him.
26-6 Sec. 55. NRS 119A.460 is hereby amended to read as follows:
26-7 119A.460 If a trust is created pursuant to a requirement of this chapter,
26-8 the:
26-9 1. Trustee must be approved by the administrator.
26-10 2. Trust must be irrevocable, unless otherwise provided by the
26-11 division.
26-12 3. Trustee must not be permitted to encumber the property unless
26-13 permission to do so has been given by the division.
26-14 4. Association or each [time-share] owner must be made a third-party
26-15 beneficiary.
26-16 5. Trustee must be required to give at least 30 days’ notice in writing
26-17 of his intention to resign to the association, if it has been formed, and to the
26-18 division, and the division must approve a substitute trustee before the
26-19 resignation of the trustee may be accepted.
26-20 Sec. 56. NRS 119A.470 is hereby amended to read as follows:
26-21 119A.470 1. If title to a [time-share] project is conveyed to a trustee
26-22 pursuant to subsection 3 of NRS 119A.430, before escrow closes for the
26-23 sale of the first time share, the developer must provide the division with
26-24 satisfactory evidence that:
26-25 (a) Title to the project has been conveyed to the trustee.
26-26 (b) All proceeds received by the developer from the sales of time shares
26-27 are being delivered to the trustee and deposited in a fund which has been
26-28 established to provide for the payment of any taxes, costs of insurance or
26-29 the discharge of any lien recorded against the project.
26-30 2. The trustee shall pay the charges against the trust in the following
26-31 order:
26-32 (a) Trustee’s fees and costs.
26-33 (b) Payment of taxes.
26-34 (c) Payments due any holder of a lien recorded against the project.
26-35 (d) Any other payments authorized by the document creating the trust.
26-36 3. The administrator may inspect the records relating to the trust at any
26-37 reasonable time.
26-38 Sec. 57. NRS 119A.4771 is hereby amended to read as follows:
26-39 119A.4771 1. A person who , on behalf of an owner other than a
26-40 developer, wishes to list, advertise or promote for resale, or solicit
26-41 prospective purchasers of, [promote or resell] 12 or more time shares that
26-42 were previously sold must:
26-43 (a) Be licensed as a real estate broker pursuant to the provisions of
26-44 chapter 645 of NRS; and
26-45 (b) Register as a time-share resale broker with the division by
26-46 completing a form for registration provided by the division.
26-47 2. A time-share resale broker shall renew his registration with the
26-48 division annually on a form provided by the division.
27-1 3. Unless the method of resales of time shares is made to evade the
27-2 provisions of this chapter, a person is not required to register as a time-
27-3 share resale broker if the person:
27-4 (a) Has acquired fewer than 12 time shares and [who] later resells or
27-5 offers to resell one or more of those time shares; or
27-6 (b) Is a project broker who resells or offers to resell a time share in a
27-7 project as an agent for a developer who holds a permit for the project.
27-8 Sec. 57.5. NRS 119A.4773 is hereby amended to read as follows:
27-9 119A.4773 1. A time share must not be advertised or offered for
27-10 resale within this state until the advertisement or offering is [approved by]
27-11 filed with the division.
27-12 2. Each [advertisement must contain the processing number assigned
27-13 to it by the division.
27-14 3. Each application for the approval of advertising] such filing must
27-15 include:
27-16 (a) The form and content of advertising to be used;
27-17 (b) The nature of the offer of gifts or other free benefits to be extended;
27-18 and
27-19 (c) The nature of promotional meetings involving any person or act
27-20 described in NRS 119A.300.
27-21 [4. The division shall render a decision upon an application for the
27-22 approval of advertising or an offer for resale within 30 days after the date
27-23 the application is filed.]
27-24 Sec. 58. NRS 119A.4775 is hereby amended to read as follows:
27-25 119A.4775 1. Before a purchaser signs any contract to purchase a
27-26 time share that is offered for resale, the person who is reselling the time
27-27 share , other than a developer, shall disclose by a written document
27-28 separate from the contract to purchase a time share:
27-29 (a) The period during which the purchaser may use the time share;
27-30 (b) A legal description of the interest in the time share;
27-31 (c) The earliest date that the prospective purchaser may use the time
27-32 share;
27-33 (d) The name, address and telephone number of the agent managing the
27-34 time-share plan and the project;
27-35 (e) The place where the documents of formation of the association and
27-36 documents governing the time-share plan and the project may be obtained;
27-37 (f) The amount of the annual assessment of the association of the time
27-38 share for the current fiscal year, if any;
27-39 (g) Whether all assessments against the time share are paid in full, and
27-40 the consequences of failure to pay any assessment;
27-41 (h) Whether participation in any program for the exchange of
27-42 occupancy rights among [time-share] owners or with the owners of time
27-43 shares in other time-share [properties] plans is mandatory; and
27-44 (i) Any other information required to be disclosed pursuant to the
27-45 regulations adopted by the administrator pursuant to subsection 2.
27-46 2. The administrator shall adopt regulations prescribing the form and
27-47 contents of the disclosure statement described in this section.
28-1 Sec. 59. NRS 119A.490 is hereby amended to read as follows:
28-2 119A.490 1. Any proposed amendment by the developer of the
28-3 provisions of [the document which created the time-share project] a time-
28-4 share instrument must be filed with the division.
28-5 2. Unless the division notifies the developer of its disapproval within
28-6 15 days, the amendments shall be deemed to be approved by the division.
28-7 Sec. 60. NRS 119A.500 is hereby amended to read as follows:
28-8 119A.500 No action for partition of a [time-share] unit may be
28-9 maintained except as provided in the time-share instrument. If a time share
28-10 is owned by two or more persons, an action may be brought for the judicial
28-11 sale of the time share. A provision for the waiver or subordination of the
28-12 right of partition or any other right characteristic of a tenancy in common is
28-13 valid.
28-14 Sec. 61. NRS 119A.510 is hereby amended to read as follows:
28-15 119A.510 If a unit is unavailable for a period to which the owner is
28-16 entitled by schedule or by confirmed reservation, the owner is entitled to be
28-17 provided by the association : [or, if there is no association, by the
28-18 developer:]
28-19 1. A comparable unit; or
28-20 2. Monetary compensation for the loss of such use.
28-21 Sec. 62. NRS 119A.520 is hereby amended to read as follows:
28-22 119A.520 1. Each owner is a member of the association for the time-
28-23 share [project.] plan. The association may be incorporated.
28-24 2. The state of incorporation may be:
28-25 (a) This state;
28-26 (b) The state in which the [time-share] project is located; or
28-27 (c) Any state where the developer has obtained a permit to sell time
28-28 shares under statutes which govern the sale of time shares.
28-29 3. The [developer shall transfer to the owners the control of the
28-30 association within 120 days after 80 percent of the time shares have been
28-31 sold.] association may adopt and amend bylaws, rules and regulations.
28-32 4. Except as otherwise provided in NRS 82.321, any proxy which is
28-33 executed by an owner to an association is valid for an indefinite period if
28-34 the owner may revoke his proxy, by written notice to the association, to
28-35 vote at a particular meeting.
28-36 Sec. 63. NRS 119A.530 is hereby amended to read as follows:
28-37 119A.530 1. A developer or an affiliate of the developer shall
28-38 provide for the management of the time-share plan and the project, by a
28-39 written agreement with the [time-share] association or, if there is no
28-40 association, with the owners. The initial term of the agreement must expire
28-41 upon the first annual meeting of the members of the association or at the
28-42 end of 5 years, whichever comes first. All succeeding terms of the
28-43 agreement must be renewed annually unless the manager refuses to renew
28-44 the agreement or a majority of the [owners,] members of the association
28-45 who are entitled to vote, excluding the developer, [notify] notifies the
28-46 manager of [their] its refusal to renew the agreement.
28-47 2. The agreement must provide that:
28-48 (a) The manager or a majority of the owners may terminate the
28-49 agreement for cause.
29-1 (b) The resignation of the manager will not be accepted until 90 days
29-2 after receipt by the association, or if there is no association, by the
29-3 owners , of the written resignation.
29-4 (c) A fidelity bond must be delivered by the manager to the association.
29-5 3. An agreement entered into or renewed on or after October 1, 2001,
29-6 must contain a detailed, itemized schedule of all fees, compensation or
29-7 other property that the manager is entitled to receive for services
29-8 rendered to the association or any member of the association or
29-9 otherwise derived from the manager’s affiliation with the time-share plan
29-10 or the project, or both, unless the manager is the developer or an affiliate
29-11 of the developer. Upon the request of the association, the manager shall
29-12 disclose to the association annual revenue received by the manager from
29-13 the manager’s affiliation with the time-share plan or the project, or both.
29-14 4. Except as otherwise provided in this subsection, if the developer
29-15 retains a [reversionary] property interest in the [time-share] project, the
29-16 parties to such an agreement must include the developer, the manager and
29-17 the association. In addition to the provisions required in subsections 1 and
29-18 2, the agreement must provide:
29-19 (a) That the project will be maintained in good condition. Except as
29-20 otherwise provided in this paragraph, any defect which is not cured within
29-21 10 days after notification by the developer may be cured by him. In an
29-22 emergency situation, notice is not required. The association must repay the
29-23 developer for any cost of the repairs plus the legal rate of interest. Each
29-24 owner must be assessed for his share of the cost of repairs.
29-25 (b) That, if any dispute arises between the developer and the manager or
29-26 association, either party may request from the American Arbitration
29-27 Association or the Nevada Arbitration Association a list of seven potential
29-28 factfinders from which one must be chosen to settle the dispute. The
29-29 agreement must provide for the method of selecting one factfinder from
29-30 this list.
29-31 (c) For the collection of assessments from the owners to pay obligations
29-32 which may be due to the developer for breach of the covenant to maintain
29-33 the premises in good condition and repair.
29-34 If the developer[, after his request to be included,] is not made a party to
29-35 this agreement, he shall be considered to be a third-party beneficiary of
29-36 such an agreement.
29-37 Sec. 64. NRS 119A.540 is hereby amended to read as follows:
29-38 119A.540 1. The association or , if there is no association, the
29-39 developer shall adopt an annual budget for revenues, expenditures and
29-40 reserves and collect assessments for the expenses of the time-share plan
29-41 and the project from [time-share] the owners. The annual budgets of the
29-42 association must be submitted to and approved by the division until such
29-43 time as the association is controlled by members other than the developer.
29-44 2. The administrator may require that the association [,] or , if there is
29-45 no association, the developer provide, at the association’s or the
29-46 developer’s expense, an opinion from an independent professional
29-47 consultant as to the sufficiency of the budget to sustain the time-share plan
29-48 offered by the association or the developer. The association or the
29-49 developer shall place any money collected for assessments [in a trust
30-1 account.] and any other revenues received by or on behalf of the
30-2 association in an account established by the association.
30-3 3. The developer shall pay assessments for any time shares which are
30-4 unsold or enter into an agreement with the association, [on] in a form
30-5 approved by the division, to pay the difference between the actual expenses
30-6 incurred by the association and the sum of the amounts payable to the
30-7 association as assessments by [the time-share owners.] owners, other than
30-8 the developer, and other revenues received by the association. The
30-9 division may require the developer to provide a surety bond or other form
30-10 of security which is satisfactory to the division, to guarantee payment of
30-11 the developer’s obligation.
30-12 Sec. 65. NRS 119A.550 is hereby amended to read as follows:
30-13 119A.550 1. The developer or the association may levy and enforce
30-14 a reasonable assessment upon any time share in accordance with the time-
30-15 share instrument, which is a debt of the owner thereof at the time the
30-16 assessment is made. The amount of the assessment plus any other charges
30-17 thereon, such as interest, costs, attorney’s fees and penalties, as may be
30-18 provided for in the time-share instrument is a lien upon the time share
30-19 assessed when the developer or the association causes to be recorded with
30-20 the county recorder of the county in which the [time-share] project is
30-21 located a notice of assessment, which must state:
30-22 (a) The amount of the assessment and such other charges thereon as
30-23 may be authorized by the time-share instrument;
30-24 (b) A description of the time share against which the lien has been
30-25 assessed; and
30-26 (c) The name of the [time-share] owner.
30-27 The notice must be signed by an authorized representative of the developer
30-28 or the association or as otherwise provided in the time-share instrument.
30-29 Upon payment of the assessment and charges in connection with which the
30-30 notice has been so recorded, or other satisfaction thereof, the developer or
30-31 the association shall cause to be recorded a further notice stating the
30-32 satisfaction and the release of the lien thereof.
30-33 2. The lien is prior to all other liens recorded [subsequent to] after the
30-34 recordation of the notice of assessment except that the time-share
30-35 instrument may provide for the subordination thereof to any other liens and
30-36 encumbrances. Unless sooner satisfied and released or the enforcement
30-37 thereof initiated as provided in subsection 3, the lien expires and has no
30-38 further force or effect 1 year after the date of recordation of the notice of
30-39 assessment, but the 1-year period may be extended by the developer or the
30-40 association for a period not to exceed 1 additional year by recording a
30-41 written extension thereof.
30-42 3. The lien may be enforced by sale by the developer or the
30-43 association, its agent or attorney, after failure of the owner to pay such an
30-44 assessment in accordance with the terms of the time-share instrument. The
30-45 sale must be conducted in accordance with the provisions of Covenants
30-46 Nos. 6, 7 and 8 of NRS 107.030, and NRS 107.090 insofar as they are
30-47 consistent with the provisions of NRS 119A.560, or in any other manner
30-48 permitted by law. Unless otherwise provided in the time-share instrument,
30-49 the developer or the association, if it is a corporation, cooperative
31-1 association, partnership or natural person, may bid at foreclosure sale and
31-2 hold, lease, mortgage and convey the time share.
31-3 Sec. 66. NRS 119A.560 is hereby amended to read as follows:
31-4 119A.560 1. The power of sale may not be exercised until:
31-5 (a) The developer or the association, its agent or attorney has first
31-6 executed and caused to be recorded with the recorder of the county wherein
31-7 the [time-share] project is located a notice of default and election to sell the
31-8 time share or cause its sale to satisfy the assessment lien; and
31-9 (b) The [time-share] owner or his successor in interest has failed to pay
31-10 the amount of the lien, including costs, fees and expenses incident to its
31-11 enforcement for 60 days computed as prescribed in subsection 2.
31-12 2. The 60-day period provided in subsection 1 begins on the first day
31-13 following the day upon which the notice of default and election to sell is
31-14 recorded and a copy of the notice is mailed by certified or registered mail
31-15 with postage prepaid to the [time-share] owner or to his successor in
31-16 interest at his address if that address is known, otherwise to the address of
31-17 the [time-share] project. The notice must describe the deficiency in
31-18 payment.
31-19 3. The developer or the association, its agent or attorney shall, after
31-20 expiration of the 60-day period and before selling the time share, give
31-21 notice of the time and place of the sale in the manner and for a time not
31-22 less than that required for the sale of real property upon execution, except
31-23 that a copy of the notice of sale must be mailed on or before the first
31-24 publication or posting required by NRS 21.130 by certified or registered
31-25 mail with postage prepaid to the [time-share] owner or to his successor in
31-26 interest at his address if that address is known, otherwise to the address of
31-27 the [time-share] project. The sale [itself] may be made at the office of the
31-28 developer or the association if the notice so provided, whether the [time-
31-29 share] project is located within the same county as the office of the
31-30 developer or the association or not.
31-31 4. Every sale made under the provisions of NRS 119A.550 vests in the
31-32 purchaser the title of the [time-share] owner without equity or right of
31-33 redemption.
31-34 Sec. 67. NRS 119A.570 is hereby amended to read as follows:
31-35 119A.570 1. The developer or the association, if it has been formed,
31-36 shall maintain:
31-37 (a) Property insurance on the [time-share] project and any personal
31-38 property available for use by the [time-share] owners in conjunction
31-39 therewith, other than personal property separately owned by [a time-share]
31-40 an owner, insuring against all risks of direct physical loss commonly
31-41 insured against, with a provision agreed to by the lender, that the proceeds
31-42 must be disbursed for the repair or restoration of the property, and that the
31-43 [time-share] owners and lien holders are not entitled to receive payment of
31-44 any portion of the proceeds unless there is a surplus of proceeds after the
31-45 property has been completely repaired or restored;
31-46 (b) Liability insurance, including insurance for medical payments, in an
31-47 amount not less than $1,000,000 per occurrence, covering all occurrences
31-48 commonly insured against for death, bodily injury and property damage
32-1 arising out of or in connection with the use, ownership or maintenance of
32-2 the time-share property and [time-share] units; and
32-3 (c) Insurance covering the costs of temporary quarters for the [time-
32-4 share] owners and other losses commonly insured against.
32-5 2. Each insurance policy carried pursuant to subsection 1 must provide
32-6 that:
32-7 (a) Each [time-share] owner is an insured person under the policy
32-8 whether designated as an insured by name individually or as part of a
32-9 named group or otherwise, as his interest may appear;
32-10 (b) The insurer waives its right to subrogation under the policy against
32-11 any [time-share] owner or members of his household; and
32-12 (c) No act or omission by any [time-share] owner, unless acting within
32-13 the scope of his authority on behalf of an association, will void the policy
32-14 or be a condition to recovery by any other person under the policy.
32-15 Sec. 68. NRS 119A.580 is hereby amended to read as follows:
32-16 119A.580 No labor performed or services or materials furnished with
32-17 the consent of or at the request of [a time-share] an owner may be the basis
32-18 for the filing of a lien against the time share of any other [time-share]
32-19 owner, or against any part thereof, or against any other property of any
32-20 other [time-share] owner, unless the other owner has expressly consented
32-21 to or requested the performance of such labor or furnishing of such
32-22 materials or services. Express consent shall be deemed to have been given
32-23 by the owner of any time share in the case of emergency repairs thereto.
32-24 Labor performed or services or materials furnished for the insured
32-25 property, if authorized by the association and provided for in the time-share
32-26 instrument, shall be deemed to be performed or furnished with the express
32-27 consent of each [time-share owner. A time-share] owner. An owner may
32-28 remove his time share from a lien against two or more time shares or any
32-29 part thereof by payment to the holder of the lien of the fraction of the total
32-30 sum secured by such lien which is attributable to his time share.
32-31 Sec. 69. NRS 119A.590 is hereby amended to read as follows:
32-32 119A.590 1. A developer who offers a program for the exchange of
32-33 occupancy rights among [time-share] owners or with the owners of time
32-34 shares in other time-share [properties,] plans, or both, shall give to the
32-35 purchaser the following information:
32-36 (a) The name and address of the company offering the program.
32-37 (b) The names of the officers, directors and shareholders owning at least
32-38 5 percent of the outstanding stock of that company.
32-39 (c) A statement indicating whether the company or any of its officers or
32-40 directors has any legal or beneficial interest in any interest of the developer
32-41 or managing agent in any time-share plan [to sell time shares] included in
32-42 the program and, if so, the name, location and nature of the interest.
32-43 (d) A statement that the purchaser’s contract with the company is a
32-44 contract separate and distinct from the contract to purchase the time share,
32-45 unless the company and the developer or an affiliate of the developer are
32-46 the same.
32-47 (e) A statement indicating whether the purchaser’s participation in the
32-48 program is dependent upon the continued inclusion of the time-share plan
32-49 [to sell time shares] in the program.
33-1 (f) A statement indicating whether the purchaser’s membership or
33-2 participation in the program, is voluntary or mandatory.
33-3 (g) A complete and accurate description of:
33-4 (1) The terms and conditions of the purchaser’s contractual
33-5 relationship with the company and the procedure by which changes thereto
33-6 may be made.
33-7 (2) The procedure to qualify for and make exchanges.
33-8 (3) All limitations, restrictions or priorities of the program, including,
33-9 but not limited to, limitations on exchanges based on the seasons of the
33-10 year, the size of units or levels of occupancy, printed in boldface type, and,
33-11 if such limitations, restrictions or priorities are not uniformly applied by the
33-12 program, a clear description of the manner in which they are applied.
33-13 (h) A statement indicating whether exchanges are arranged on the basis
33-14 of available space and whether there are any guarantees of fulfilling
33-15 specific requests for exchanges.
33-16 (i) A statement indicating whether and under what circumstances an
33-17 owner, in dealing with the company, may lose the right to use and occupy a
33-18 [time-share] unit in any properly applied for exchange without being
33-19 provided with substitute accommodations by the company.
33-20 (j) The fees to be paid by owners in the program, including a statement
33-21 indicating whether any fees may be changed by the company and, if so, the
33-22 circumstances under which those changes may be made.
33-23 (k) The name and address of the site of each [time-share] project
33-24 included in the program.
33-25 (l) The number of units in each [project] time-share plan included in
33-26 the program which are available for occupancy, expressed in numerical
33-27 groupings of from 1 to 5, 6 to 10, 11 to 20, 21 to 50 and over 50.
33-28 (m) The number of owners with respect to each time-share plan [to sell
33-29 time shares] or other property who are eligible to participate in the
33-30 program, expressed in numerical groupings of from 1 to 100, 101 to 249,
33-31 250 to 499, 500 to 999 and at least 1,000, and a statement of the criteria
33-32 used to determine those owners who are eligible to participate in the
33-33 program.
33-34 (n) The disposition made by the company of time shares deposited with
33-35 the program by owners who are eligible to participate in the program and
33-36 not used by the company in effecting exchanges.
33-37 (o) An annual report completed on or before July 1 of the succeeding
33-38 year which must be independently certified by a certified public accountant
33-39 or accounting firm in accordance with the standards of the Accounting
33-40 Standards Board of the American Institute of Certified Public Accountants,
33-41 as those standards exist on May 19, 1983. The report must include:
33-42 (1) The number of owners who are enrolled to participate in the
33-43 program, including an indication of whether the relationship between the
33-44 company and the owners is based on the payment of a fee or is gratuitous.
33-45 (2) The number of time-share [projects] plans included in the
33-46 program, categorized by those [projects] plans which are the subject of a
33-47 contract between the developer or the association and the company and
33-48 those [projects] plans which are the subject of a contract between the
33-49 company and owners directly.
34-1 (3) The number of time shares for which the company has an
34-2 outstanding obligation to provide an exchange to an owner who
34-3 relinquished a time share during the year in exchange for a time share in
34-4 any future year.
34-5 (4) The number of exchanges confirmed by the company during the
34-6 year.
34-7 2. The information required by subsection 1 must be delivered to the
34-8 purchaser before the execution of any contract between the purchaser and
34-9 the company or the contract to purchase the time share.
34-10 3. Upon receipt of the information, the purchaser shall certify in
34-11 writing that he has received the information from the developer.
34-12 4. Except as otherwise provided in this subsection, the information
34-13 required by subsection 1 must be [accurate as of 30 days before the date on
34-14 which the information is delivered to the purchaser.] periodically revised to
34-15 reflect any material changes in that information. The information
34-16 required by paragraphs (b), (c), (k), (l), (m) and (o) of subsection 1 must be
34-17 consistent with the latest audited statement of the company which is
34-18 prepared not more than 18 months before the information is delivered.
34-19 Sec. 70. NRS 119A.600 is hereby amended to read as follows:
34-20 119A.600 If a company intends to offer a program for the exchange of
34-21 occupancy rights among [time-share] owners or with the owners of time
34-22 shares in other time-share [projects,] plans, or both, directly to a purchaser
34-23 or owner, the company shall deliver to him, before the offering or the
34-24 execution of any contract between the purchaser or owner and the company
34-25 offering the program, the information set forth in subsection 1 of NRS
34-26 119A.590. The requirements of this section do not apply to any renewal of
34-27 a contract between an owner and such a company.
34-28 Sec. 71. NRS 119A.620 is hereby amended to read as follows:
34-29 119A.620 1. A company whose program for the exchange of
34-30 occupancy rights among [time-share] owners or with the owners of time
34-31 shares in other time-share [projects,] plans, or both, is offered to
34-32 purchasers of time shares in this state shall, on or before July 1 of each
34-33 year, file with the division and secretary of the association the information
34-34 required by subsection 1 of NRS 119A.590 as it relates to that plan.
34-35 2. No developer is liable for the use, delivery or publication of
34-36 information provided to it by the company.
34-37 3. Except as otherwise provided in this subsection, no company is
34-38 liable for:
34-39 (a) Any representation made by the developer relating to the program or
34-40 company.
34-41 (b) The use, delivery or publication by the developer of any information
34-42 relating to the program or company.
34-43 Such a company is liable only for the written information provided to the
34-44 developer by the company.
34-45 Sec. 72. NRS 119A.660 is hereby amended to read as follows:
34-46 119A.660 1. Whenever the administrator believes that any person
34-47 has violated any order, regulation, permit, decision, demand or
34-48 requirement, or any of the provisions of this chapter, he may bring an
34-49 action in the district court in the county in which the person resides or
35-1 maintains his principal place of business or, if the person resides outside
35-2 the state, in any court of competent jurisdiction within or outside the state,
35-3 against the person to enjoin him from continuing the violation.
35-4 2. The administrator may intervene in any action involving a time-
35-5 share [property,] plan, a project or a time share if intervention is necessary
35-6 in the public interest and for the protection of purchasers.
35-7 Sec. 73. NRS 119A.665 is hereby amended to read as follows:
35-8 119A.665 1. When the administrator ascertains that an association
35-9 [of time-share owners] or a developer, if there is no association, is
35-10 insolvent or in imminent danger of insolvency, or the association’s or
35-11 developer’s affairs are being mismanaged, he may file a complaint in the
35-12 district court of the county in which the principal office of the association
35-13 or developer is located for the appointment of a receiver.
35-14 2. Upon appointment, the receiver shall take possession of all the
35-15 property, business and assets of the association or developer which are
35-16 located within this state and retain possession of them until further order of
35-17 the court. The receiver shall make or cause to be made an inventory of the
35-18 assets and known liabilities of the association or developer. Upon approval
35-19 of the court, the receiver shall take such other actions as appear necessary
35-20 and reasonable for the conduct of the business of the association or
35-21 developer.
35-22 3. The inventory made by the receiver and all claims filed by creditors
35-23 are open at all reasonable times for inspection and any action taken by the
35-24 receiver upon any of the claims is subject to the approval of the court
35-25 before which the cause is pending.
35-26 4. The expenses of the receiver and compensation of counsel, as well
35-27 as all expenditures required in any liquidation proceeding, must be fixed by
35-28 the receiver, subject to the approval of the court, and, upon certification of
35-29 the receiver, must be paid out of the assets he controls as receiver.
35-30 Sec. 74. NRS 119A.680 is hereby amended to read as follows:
35-31 119A.680 1. It is unlawful for any person to engage in the business
35-32 of, act in the capacity of, advertise or assume to act as a:
35-33 (a) Project broker or sales agent within the State of Nevada without first
35-34 obtaining a license from the division pursuant to chapter 645 of NRS or
35-35 NRS 119A.210.
35-36 (b) Representative , manager or time-share resale broker within the
35-37 State of Nevada without first registering with the division.
35-38 2. Any person who violates subsection 1 is guilty of a gross
35-39 misdemeanor.
35-40 Sec. 75. NRS 119A.690 is hereby amended to read as follows:
35-41 119A.690 Any person who willfully submits, in the application for a
35-42 permit to sell time shares or an application for a sales agent’s license, any
35-43 materially false or misleading information or fails to submit an annual
35-44 report on a program for the exchange of occupancy rights among [time-
35-45 share] owners or with the owners of time shares in other time-share
35-46 [properties,] plans, or both, is guilty of a misdemeanor.
36-1 Sec. 76. NRS 119A.710 is hereby amended to read as follows:
36-2 119A.710 It is unlawful to engage in unfair methods of competition or
36-3 deceptive or unfair acts in the offer to sell or sale of a time share including,
36-4 without limitation:
36-5 1. Misrepresenting or failing to disclose any material fact concerning a
36-6 time share.
36-7 2. Including in an agreement for the purchase of a [time-share] time
36-8 share provisions purporting to waive any right or benefit provided for
36-9 purchasers under this chapter.
36-10 3. Receiving from a prospective purchaser any money or other
36-11 valuable consideration before the purchaser has received a statement of
36-12 public offering.
36-13 4. Misrepresenting the amount of time or period of time the unit will
36-14 be available to a purchaser.
36-15 5. Misrepresenting the location or locations of the unit.
36-16 6. Misrepresenting the size, nature, extent, qualities or characteristics
36-17 of the unit.
36-18 7. Misrepresenting the nature or extent of any services incident to the
36-19 unit.
36-20 8. Misrepresenting the conditions under which a purchaser may
36-21 exchange occupancy rights to a unit in one location for occupancy rights to
36-22 a unit in another location.
36-23 9. Failing to disclose initially that any promised entertainment, food or
36-24 other inducements are being offered to solicit the sale of a time share.
36-25 10. Conducting or participating in, without prior approval by the
36-26 division, any type of lottery or contest, or offering prizes or gifts to induce
36-27 or encourage a person to visit a [time-share] project, attend a meeting at
36-28 which a time share will be discussed, attend a presentation or purchase a
36-29 time share.
36-30 11. Failing to disclose initially to a prospective purchaser any
36-31 agreement between the project broker or sales agent and the developer that
36-32 results in a sharing of sales proceeds in excess of a minimum sales price for
36-33 a time share.
36-34 12. Any act or practice considered an unfair method of competition or
36-35 an unfair or deceptive act or practice under NRS 207.170, 207.171 or
36-36 598.0915 to 598.0925, inclusive, or chapter 598A or 599A of NRS.
36-37 Sec. 77. Section 29 of this act is hereby amended to read as follows:
36-38 Sec.29. 1. A person who wishes to engage in the business of,
36-39 act in the capacity of, advertise or assume to act as a manager shall
36-40 register with the division on a form prescribed by the division.
36-41 2. The form for registration must include, without limitation:
36-42 (a) The registered name of the time-share plan or the project, or
36-43 both, that the manager will manage;
36-44 (b) The address and telephone number of the manager’s principal
36-45 place of business; and
36-46 (c) [The social security number of the manager; and
36-47 (d)] The name of the manager’s responsible managing employee.
36-48 3. The form for registration must be accompanied by[:
37-1 (a) Satisfactory] satisfactory evidence, acceptable to the division,
37-2 that the manager and his employees have obtained fidelity bonds in
37-3 accordance with regulations adopted by the division . [; and
37-4 (b) The statement required pursuant to NRS 119A.263.]
37-5 4. The division may collect a fee for registering a manager in an
37-6 amount not to exceed the administrative costs of registering the
37-7 manager.
37-8 5. As used in this section, “responsible managing employee”
37-9 means the person designated by the manager to:
37-10 (a) Make technical and administrative decisions in connection with
37-11 the manager’s business; and
37-12 (b) Hire, superintend, promote, transfer, lay off, discipline or
37-13 discharge other employees or recommend such action on behalf of the
37-14 manager.
37-15 Sec. 78. NRS 119A.165 is hereby repealed.
37-16 Sec. 79. Notwithstanding the provisions of section 29 of this act, a
37-17 person who is engaged in the business of, acting in the capacity of,
37-18 advertising or assuming to act as a manager on October 1, 2001, shall
37-19 register with the real estate division of the department of business and
37-20 industry no later than January 1, 2002.
37-21 Sec. 80. The amendatory provisions of this act do not apply to
37-22 offenses committed before October 1, 2001.
37-23 Sec. 81. 1. This section, sections 1 to 76, inclusive, and 78, 79 and
37-24 80 of this act become effective on October 1, 2001.
37-25 2. Section 77 of this act becomes effective on the date on which the
37-26 provisions of 42 U.S.C. § 666 requiring each state to establish procedures
37-27 under which the state has authority to withhold or suspend, or to restrict the
37-28 use of professional, occupational and recreational licenses of persons who:
37-29 (a) Have failed to comply with a subpoena or warrant relating to a
37-30 procedure to determine the paternity of a child or to establish or enforce an
37-31 obligation for the support of a child; or
37-32 (b) Are in arrears in the payment for the support of one or more
37-33 children,
37-34 are repealed by the Congress of the United States.
37-35 TEXT OF REPEALED SECTION
37-36 119A.165 Applicability of chapter to matter also governed by
37-37 chapter 116 of NRS.
37-38 1. If a matter governed by this chapter is also governed by chapter 116
37-39 of NRS, compliance with the provisions of chapter 116 of NRS governing
37-40 the matter which are in addition to or different from the provisions in this
37-41 chapter governing the same matter is not required. In the event of a
37-42 conflict between provisions of this chapter and chapter 116 of NRS, the
37-43 provisions of this chapter prevail.
38-1 2. Without limiting the generality of subsection 1, the provisions of
38-2 NRS 116.11145, 116.12065, 116.3103, 116.31031, 116.31034, 116.3106,
38-3 116.31065, 116.3108 to 116.311, inclusive, 116.31139, 116.31145 to
38-4 116.31158, inclusive, 116.31162, 116.31175, 116.31177, 116.41095 and
38-5 116.4117 do not apply to a time share or a time-share project.
38-6 H