REQUIRES TWO THIRDS MAJORITY VOTE (§ 28)
(REPRINTED WITH ADOPTED AMENDMENTS)
FIRST REPRINT S.B. 421
Senate Bill No. 421–Senator Schneider
March 19, 2001
____________
Referred to Committee on Commerce and Labor
SUMMARY—Makes various changes to provisions governing common-interest communities. (BDR 10‑446)
FISCAL NOTE: Effect on Local Government: Yes.
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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).
AN ACT relating to common-interest communities; creating the commission for common-interest communities to hear and take action on complaints related to such communities; requiring community managing agents to be licensed by the real estate division of the department of business and industry; requiring community managers to be certified by the division; limiting the circumstances under which an association may bring an action to recover damages resulting from constructional defects; revising the amount of a fine that may be imposed for a continuing violation of the governing documents of an association; requiring the removal of a member of the executive board of an association to be conducted by secret ballot; revising the circumstances under which an association may foreclose on its lien for unpaid assessments; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
1-1 Section 1. Chapter 116 of NRS is hereby amended by adding thereto
1-2 the provisions set forth as sections 2 to 43, inclusive, of this act.
1-3 Sec. 2. “Certificate” means a certificate for the management of a
1-4 common-interest community issued by the division pursuant to NRS
1-5 116.31139.
1-6 Sec. 3. “Commission” means the commission for common-interest
1-7 communities created pursuant to section 11 of this act.
1-8 Sec. 4. “Community manager” means a person who holds a
1-9 certificate or permit and provides for the management of a common-
1-10 interest community.
1-11 Sec. 5. “Community managing agent” means a person who is
1-12 responsible for supervising a holder of a certificate.
1-13 Sec. 6. “Division” means the real estate division of the department
1-14 of business and industry.
2-1 Sec. 7. “Management of a common-interest community” means the
2-2 physical, administrative or financial maintenance and management of a
2-3 common-interest community, or the supervision of those activities, for a
2-4 fee, commission or other valuable consideration.
2-5 Sec. 8. “Permit” means a permit to engage in property management
2-6 issued pursuant to the provisions of chapter 645 of NRS.
2-7 Sec. 9. “Respondent” means a person who is the subject of a written
2-8 affidavit filed with the division pursuant to section 18 of this act.
2-9 Sec. 10. If a matter governed by this chapter is also governed by
2-10 chapter 82 of NRS and there is a conflict between the provisions of this
2-11 chapter and the provisions of chapter 82 of NRS, the provisions of this
2-12 chapter prevail.
2-13 Sec. 11. 1. The commission for common-interest communities,
2-14 consisting of five members appointed by the governor, is hereby created
2-15 within the division.
2-16 2. The governor shall appoint to the commission:
2-17 (a) Two members who are units’ owners residing in this state, one of
2-18 whom is serving or has served as a member of the executive board of an
2-19 association;
2-20 (b) One member who is in the business of developing common-interest
2-21 communities in this state;
2-22 (c) One member who holds a permit or a certificate; and
2-23 (d) One member who has experience with or knowledge of matters
2-24 related to common-interest communities, other than the management of
2-25 a common-interest community.
2-26 3. Three members of the commission must be residents of a county
2-27 whose population is 400,000 or more. Each of the other two members of
2-28 the commission must be a resident of a county whose population is less
2-29 than 400,000. Each member of the commission must have resided in a
2-30 common-interest community or have been actively engaged in a business
2-31 related to common-interest communities for not less than 3 years
2-32 immediately preceding the date of his appointment.
2-33 4. After the initial terms, each member of the commission shall serve
2-34 a term of 3 years. Each member may serve no more than two consecutive
2-35 full terms. If a vacancy occurs during a member’s term, the governor
2-36 shall appoint a person qualified under this section to replace the member
2-37 for the remainder of the unexpired term.
2-38 5. While engaged in the business of the commission, each member is
2-39 entitled to receive:
2-40 (a) A salary of not more than $80 per day, as established by the
2-41 commission; and
2-42 (b) The per diem allowance and travel expenses provided for state
2-43 officers and employees generally.
2-44 Sec. 12. 1. The commission shall, at the first meeting of each fiscal
2-45 year, elect from its members a chairman, vice chairman and secretary.
2-46 2. The commission shall meet at least once each calendar quarter
2-47 and at other times on the call of the chairman or a majority of its
2-48 members.
3-1 3. A majority of the members of the commission constitutes a
3-2 quorum for the transaction of all business.
3-3 4. The commission shall prescribe such forms and adopt such
3-4 procedures as are necessary for submitting information to the
3-5 commission.
3-6 Sec. 13. 1. The division shall provide or arrange for courses of
3-7 instruction in rules of procedure and substantive law appropriate for
3-8 members of the commission.
3-9 2. Each person appointed to the commission shall attend the
3-10 instruction provided pursuant to subsection 1 before serving on the
3-11 commission.
3-12 Sec. 14. The commission shall:
3-13 1. Conduct such hearings as are required by sections 11 to 27,
3-14 inclusive, of this act.
3-15 2. Collect and maintain accurate information relating to:
3-16 (a) The number and kinds of common-interest communities created in
3-17 this state;
3-18 (b) The effect of the provisions of this chapter, and any rules or
3-19 regulations adopted pursuant thereto, on the development and
3-20 construction of common-interest communities, residential lending for
3-21 common-interest communities, and the operation and management of
3-22 common-interest communities;
3-23 (c) Violations of the provisions of this chapter and any rules or
3-24 regulations adopted pursuant thereto;
3-25 (d) The accessibility and use of, and the cost related to, mediation and
3-26 arbitration under NRS 38.300 to 38.360, inclusive, and the decisions
3-27 rendered and awards made pursuant thereto;
3-28 (e) The number of liens foreclosed on units within common-interest
3-29 communities for the failure to pay assessments levied against those units
3-30 or fines imposed against units’ owners; and
3-31 (f) The studies of reserves of associations required to be conducted
3-32 pursuant to NRS 116.31152.
3-33 3. Maintain current information concerning issues that are of
3-34 concern to units’ owners, associations, persons engaged in the
3-35 management of common-interest communities, developers and other
3-36 persons affected by common-interest communities.
3-37 4. Recommend and approve for accreditation programs of education
3-38 and research related to common-interest communities, including, without
3-39 limitation:
3-40 (a) The management of common-interest communities;
3-41 (b) The sale and resale of units in a common-interest community;
3-42 (c) Alternative methods that may be used to resolve disputes related to
3-43 common-interest communities; and
3-44 (d) The enforcement of liens foreclosed on units within a common-
3-45 interest community for the failure to pay assessments levied against those
3-46 units or for fines imposed against the units’ owners.
3-47 5. Perform such other acts as are necessary to carry out the
3-48 provisions of sections 11 to 27, inclusive, of this act.
4-1 Sec. 15. 1. The commission shall adopt by regulation:
4-2 (a) Standards for subsidizing proceedings for mediation and
4-3 arbitration conducted under NRS 38.300 to 38.360, inclusive, to ensure
4-4 that such proceedings are affordable, are not lengthy, are readily
4-5 accessible and resolve disputes related to common-interest communities
4-6 in an effective manner.
4-7 (b) The qualifications for a person who engages in the management
4-8 of a common-interest community, including, without limitation,
4-9 requirements for continuing education and standards of practice.
4-10 (c) Standards for conducting meetings of the executive boards of
4-11 associations, meetings of the units’ owners and elections of members of
4-12 executive boards of associations.
4-13 (d) Standards for enforcing the governing documents of associations
4-14 by the enforcement of liens or the imposition of fines.
4-15 2. The commission may:
4-16 (a) Adopt such regulations as are necessary for the administration of
4-17 sections 11 to 27, inclusive, of this act.
4-18 (b) By regulation, delegate any of its authority to the administrator to
4-19 be exercised pursuant to regulations adopted by the commission.
4-20 (c) Accept any gifts, grants or donations, and may enter into
4-21 agreements with other entities that are required or authorized to carry
4-22 out similar duties in this state or in other jurisdictions, to carry out the
4-23 provisions of sections 11 to 27, inclusive, of this act.
4-24 (d) Cooperate with other entities that are required or authorized to
4-25 carry out similar duties in this state or in other jurisdictions to develop
4-26 uniform procedures for carrying out the provisions of sections 11 to 27,
4-27 inclusive, of this act and for accumulating information needed to carry
4-28 out those provisions.
4-29 3. The commission shall not intervene in any internal activities of an
4-30 association except to the extent necessary to prevent or remedy a
4-31 violation of any provision of this chapter or any rule or regulation
4-32 adopted pursuant thereto.
4-33 Sec. 16. Any notice or other information required to be served upon
4-34 the commission may be delivered to the principal office of the division.
4-35 Sec. 17. 1. All money received by the commission must be
4-36 deposited in the account for common-interest communities and paid out
4-37 on its order for its expenses.
4-38 2. The commission may delegate to an independent hearing officer
4-39 or panel its authority to take any disciplinary action pursuant to sections
4-40 11 to 27, inclusive, of this act, including the authority to impose and
4-41 collect fines and penalties. Fines and penalties imposed by an
4-42 independent hearing officer or panel must be deposited in the account
4-43 for common-interest communities.
4-44 3. If a hearing officer or panel is not authorized to take disciplinary
4-45 action and determine the amount of any fine or penalty imposed
4-46 pursuant to subsection 2, the commission shall deposit the money
4-47 collected from the imposition of fines with the state treasurer for credit to
4-48 the state general fund. If the money is so deposited, the commission may
4-49 present a claim to the state board of examiners for recommendation to
5-1 the interim finance committee if money is required to pay attorney’s fees
5-2 or the costs of an investigation, or both.
5-3 Sec. 18. 1. A person who is aggrieved by any act committed in
5-4 violation of the provisions of this chapter may, within 1 year after the
5-5 discovery of the alleged violation, file with the division a written affidavit
5-6 that sets forth the facts constituting the alleged violation. Such an
5-7 affidavit may be filed only if the aggrieved person first provides to the
5-8 respondent, by certified mail, return receipt requested, two written
5-9 notices of the violation to be alleged in the affidavit. The notices must:
5-10 (a) Be mailed to the respondent’s last known address.
5-11 (b) Be mailed at least 15 days apart.
5-12 (c) Specify, in reasonable detail, the alleged violation, any injury
5-13 suffered by the aggrieved person as a result of the alleged violation and
5-14 any corrective action proposed by the aggrieved person.
5-15 2. A written affidavit filed with the division pursuant to subsection 1
5-16 must be:
5-17 (a) On a form prescribed by the commission.
5-18 (b) Be accompanied by evidence that:
5-19 (1) The respondent has been given a reasonable opportunity after
5-20 receiving the written notices to correct the alleged violation; and
5-21 (2) Reasonable efforts to resolve the alleged violation have failed.
5-22 3. Except as otherwise provided in this section, the division shall,
5-23 upon the receipt of a written affidavit, conduct an investigation to
5-24 determine whether good cause exists to proceed with a hearing on the
5-25 affidavit.
5-26 4. The commission shall adopt by regulation procedures for filing a
5-27 written affidavit pursuant to this section.
5-28 5. The commission may require any person who knowingly files a
5-29 false or fraudulent affidavit with the division to pay an administrative
5-30 fine of not more than $1,000.
5-31 Sec. 19. 1. If, after investigating a written affidavit received
5-32 pursuant to section 18 of this act, the division determines that the
5-33 affidavit is not frivolous, false or fraudulent and that good cause exists to
5-34 proceed with a hearing on the affidavit, the administrator shall file a
5-35 formal complaint with the commission and schedule a hearing before the
5-36 commission on the complaint.
5-37 2. The commission shall hold a hearing on the complaint within 90
5-38 days after the complaint is filed with the commission. The hearing may
5-39 be continued upon the motion of the commission or at the discretion of
5-40 the commission, upon the written request of the respondent or of the
5-41 division for good cause shown. The respondent may be represented by an
5-42 attorney at the hearing.
5-43 3. The division shall give the respondent written notice of the date,
5-44 time and place of the hearing at least 30 days before the date of the
5-45 hearing. The notice must be:
5-46 (a) Accompanied by:
5-47 (1) A copy of the complaint; and
5-48 (2) Copies of all communications, reports, affidavits and
5-49 depositions in the possession of the division that are relevant to the
6-1 complaint. The division may present evidence at the hearing that is
6-2 obtained after giving notice to the respondent only if the division proves
6-3 to the satisfaction of the commission that the evidence was not available
6-4 after diligent investigation before the notice was given to the respondent
6-5 and that the evidence was given or communicated to the respondent
6-6 immediately after it was obtained.
6-7 (b) Delivered personally to the respondent or mailed to the
6-8 respondent, by certified mail, to his last known address.
6-9 4. If the respondent is the holder of a permit or certificate, the
6-10 division shall give written notice of the complaint to the broker or
6-11 community managing agent with whom the respondent is associated. The
6-12 notice must:
6-13 (a) Be mailed to the broker or community managing agent, by
6-14 certified mail, to his last known address.
6-15 (b) Include an exact statement of the alleged violations.
6-16 (c) Include the date, time and place of the hearing.
6-17 Sec. 20. The commission may conduct any hearing required by
6-18 section 19 of this act by means of video teleconference or telephone
6-19 conference only if all participants in the proceedings are able to hear one
6-20 another.
6-21 Sec. 21. 1. The respondent shall file an answer with the
6-22 commission within 30 days after receiving the notice required by section
6-23 19 of this act.
6-24 2. The answer must:
6-25 (a) Contain an admission or a denial of the allegations contained in
6-26 the complaint and any defenses upon which the respondent will rely; and
6-27 (b) Be delivered to the commission or mailed to the principal office of
6-28 the division, by certified mail.
6-29 3. If an answer is not filed within the time required by subsection 1,
6-30 the division may, after giving notice to the respondent in the manner
6-31 prescribed in section 19 of this act, request the commission to enter a
6-32 finding of default against the respondent.
6-33 Sec. 22. 1. The commission shall render a final decision on the
6-34 complaint within 20 days after the final hearing thereon.
6-35 2. The commission shall notify all parties to the complaint of its
6-36 decision in writing by certified mail, return receipt requested, within 60
6-37 days after the date of the final hearing. The written decision must include
6-38 the commission’s findings of fact and conclusions of law.
6-39 Sec. 23. 1. If the commission determines, after notice and hearing,
6-40 that any person has violated a provision of this chapter, the commission
6-41 may:
6-42 (a) Issue an order to cease and desist from engaging in such conduct;
6-43 (b) Issue an order to take affirmative action to correct conditions
6-44 resulting from the unlawful conduct; or
6-45 (c) Take both actions authorized by paragraphs (a) and (b).
6-46 2. If a person fails to comply with an order issued pursuant to
6-47 subsection 1, the commission may impose a fine of not more than $1,000
6-48 for each violation.
7-1 Sec. 24. 1. If the commission determines that any person has
7-2 violated or will violate a provision of this chapter, the commission may
7-3 bring an action in the district court for the county in which the person
7-4 resides or, if the person does not reside in this state, in any court of
7-5 competent jurisdiction in this state, to enjoin that person from engaging
7-6 in the violation or from doing any act in furtherance of the violation.
7-7 2. The action must be brought in the name of the State of Nevada.
7-8 3. An injunction may be issued without:
7-9 (a) Proof of actual damage sustained by any person.
7-10 (b) The filing of any bond.
7-11 Sec. 25. The commission and any of its members, acting pursuant to
7-12 sections 11 to 27, inclusive, of this act, are immune from any civil
7-13 liability for any decision or action taken in good faith and without
7-14 malicious intent in response to a complaint filed with the commission.
7-15 Sec. 26. Within the limitations of legislative appropriations, the
7-16 division may employ such attorneys, investigators, professional
7-17 consultants and other employees as are necessary to carry out the
7-18 provisions of sections 11 to 27, inclusive, of this act.
7-19 Sec. 27. The rights and remedies provided by sections 11 to 26,
7-20 inclusive, of this act do not abrogate and are in addition to any other
7-21 rights and remedies that may exist at law or in equity.
7-22 Sec. 28. 1. Except as otherwise provided in this section, a person
7-23 acting as a community managing agent in this state must obtain a license
7-24 from the division.
7-25 2. The commission shall provide by regulation for the issuance of
7-26 licenses to community managing agents. The regulations:
7-27 (a) Must establish the qualifications for the issuance of such a license,
7-28 including the education and experience required to obtain such a
7-29 license;
7-30 (b) May require applicants for such a license to pass an examination
7-31 in order to obtain a license;
7-32 (c) Must establish standards of practice for persons holding such a
7-33 license;
7-34 (d) Must establish the grounds for initiating disciplinary action
7-35 against a person to whom a license has been issued, including, without
7-36 limitation, the grounds for placing conditions, limitations or restrictions
7-37 on a license and for the suspension or revocation of a license; and
7-38 (e) Must establish rules of practice and procedure for conducting
7-39 disciplinary hearings. No license may be revoked or suspended without
7-40 first giving notice and holding a hearing pursuant to section 19 of this
7-41 act.
7-42 3. The division may investigate the community managing agents to
7-43 whom licenses have been issued to ensure their compliance with the
7-44 standards of practice adopted pursuant to this section and collect a fee
7-45 for the issuance of a license by the division in an amount not to exceed
7-46 the administrative costs of issuing the license.
7-47 4. The provisions of subsection 1 do not apply to:
7-48 (a) A person who is engaged in the management of a common-interest
7-49 community on October 1, 2001, and is granted an exemption from the
8-1 requirements of subsection 1 by the administrator upon demonstration
8-2 that he is qualified and competent to engage in the management of a
8-3 common-interest community.
8-4 (b) A financial institution.
8-5 (c) An attorney who is licensed to practice in this state.
8-6 (d) A trustee.
8-7 (e) An employee of a corporation who manages only the property of
8-8 the corporation, unless that corporation is also an association.
8-9 (f) A declarant.
8-10 (g) A receiver.
8-11 (h) An officer or member of the executive board of an association who
8-12 acts as a community managing agent for the association.
8-13 Sec. 29. An application for a license to act as a community
8-14 managing agent or for a certificate to act as a community manager must:
8-15 1. Include the social security number of the applicant; and
8-16 2. Be accompanied by the statement required pursuant to section 30
8-17 of this act.
8-18 Sec. 30. 1. An applicant for a license to act as a community
8-19 managing agent or for a certificate to act as a community manager must
8-20 submit to the division the statement prescribed by the welfare division of
8-21 the department of human resources pursuant to NRS 425.520. The
8-22 statement must be completed and signed by the applicant.
8-23 2. The division shall include the statement required pursuant to
8-24 subsection 1 in:
8-25 (a) The application or any other forms that must be submitted for the
8-26 issuance of the license or certificate; or
8-27 (b) A separate form prescribed by the division.
8-28 3. A license or certificate may not be issued if the applicant:
8-29 (a) Fails to submit the statement required pursuant to subsection 1; or
8-30 (b) Indicates on the statement submitted pursuant to subsection 1 that
8-31 he is subject to a court order for the support of a child and is not in
8-32 compliance with the order or a plan approved by the district attorney or
8-33 other public agency enforcing the order for the repayment of the amount
8-34 owed pursuant to the order.
8-35 4. If an applicant indicates on the statement submitted pursuant to
8-36 subsection 1 that he is subject to a court order for the support of a child
8-37 and is not in compliance with the order or a plan approved by the district
8-38 attorney or other public agency enforcing the order for the repayment of
8-39 the amount owed pursuant to the order, the division shall advise the
8-40 applicant to contact the district attorney or other public agency enforcing
8-41 the order to determine the actions that the applicant may take to satisfy
8-42 the arrearage.
8-43 Sec. 31. 1. If the division receives a copy of a court order issued
8-44 pursuant to NRS 425.540 that provides for the suspension of all
8-45 professional, occupational and recreational licenses, certificates and
8-46 permits issued to the holder of a license to act as a community managing
8-47 agent or the holder of a certificate to act as a community manager, the
8-48 division shall deem the license or certificate to be suspended at the end of
8-49 the 30th day after the date the court order was issued unless the division
9-1 receives a letter issued to the holder of the license or certificate by the
9-2 district attorney or other public agency pursuant to NRS 425.550 stating
9-3 that the holder of the license or certificate has complied with a subpoena
9-4 or warrant or has satisfied the arrearage pursuant to NRS 425.560.
9-5 2. The division shall reinstate a license or a certificate that has been
9-6 suspended by a district court pursuant to NRS 425.540 if the division
9-7 receives a letter issued by the district attorney or other public agency
9-8 pursuant to NRS 425.550 to the holder of the license or certificate that he
9-9 has complied with the subpoena or warrant or has satisfied the arrearage
9-10 pursuant to NRS 425.560.
9-11 Sec. 32. 1. If the executive board of an association receives a
9-12 written complaint from a unit’s owner alleging that the board has
9-13 violated any provision of this chapter or any provision of the governing
9-14 documents of the association, the executive board shall, if action is
9-15 required by the board, place the subject of the complaint on the agenda
9-16 of the next regularly scheduled meeting of the executive board.
9-17 2. The executive board, or an authorized representative of the
9-18 association, shall, within 10 days after receiving such a complaint,
9-19 acknowledge the receipt of the complaint and notify the unit’s owner
9-20 that, if action is required by the board, the subject of the complaint will
9-21 be placed on the agenda of the next regularly scheduled meeting of the
9-22 executive board.
9-23 Sec. 33. An officer or member of the executive board of an
9-24 association or a person engaged in the management of a common-
9-25 interest community shall not solicit or accept any form of compensation,
9-26 gratuity or other remuneration that would improperly influence or would
9-27 appear to a reasonable person to influence improperly the decisions
9-28 made by those persons, or would result or would appear to a reasonable
9-29 person to result in a conflict of interest.
9-30 Sec. 34. A member of an executive board of an association shall not
9-31 take any retaliatory action against a unit’s owner because the unit’s
9-32 owner has:
9-33 1. Complained in good faith about any alleged violation of this
9-34 chapter or the governing documents of the association; or
9-35 2. Requested in good faith to review the books, records and papers of
9-36 the association.
9-37 Sec. 35. 1. A member of the executive board of an association
9-38 shall not:
9-39 (a) On or after October 1, 2001, enter into a contract or renew a
9-40 contract with the association to provide goods or services to the
9-41 association; or
9-42 (b) Otherwise accept any commission, personal profit or
9-43 compensation of any kind from the association for providing goods or
9-44 services to the association.
9-45 2. Except as otherwise provided in NRS 116.3105, the provisions of
9-46 this section do not prohibit:
9-47 (a) The payment of a salary or other income to a member of an
9-48 executive board of an association for acting in his official capacity.
10-1 (b) A declarant from entering into a contract with an association or
10-2 the payment of any consideration to the declarant for any goods or
10-3 services furnished by the declarant to the association.
10-4 (c) The declarant from serving as an officer or a member of the
10-5 executive board of the association.
10-6 3. As used in this section, “declarant” includes any agent, employee
10-7 or affiliate of a declarant.
10-8 Sec. 36. 1. An association may bring an action to recover damages
10-9 resulting from constructional defects in any of the units, common
10-10 elements or limited common elements of the common-interest
10-11 community, or submit such a claim to mediation pursuant to NRS
10-12 40.680, only:
10-13 (a) If the association first obtains the written approval of each unit’s
10-14 owner whose unit or interest in the common elements or limited common
10-15 elements will be the subject of the action or claim;
10-16 (b) Upon a vote of the units’ owners to which at least a majority of the
10-17 votes of the members of the association are allocated; and
10-18 (c) Upon a vote of the executive board of the association.
10-19 2. If an action is brought by an association to recover damages
10-20 resulting from constructional defects in any of the units, common
10-21 elements or limited common elements of the common-interest
10-22 community, or such a claim is submitted to mediation pursuant to NRS
10-23 40.680, the attorney representing the association shall provide to the
10-24 executive board of the association and to each unit’s owner a statement
10-25 that includes, in reasonable detail:
10-26 (a) The defects and damages or injuries to the units, common
10-27 elements or limited common elements;
10-28 (b) The cause of the defects, if the cause is known;
10-29 (c) The nature and the extent that is known of the damage or injury
10-30 resulting from the defects;
10-31 (d) The location of each defect within the units, common elements or
10-32 limited common elements, if known;
10-33 (e) A reasonable estimate of the cost of the action or mediation,
10-34 including reasonable attorney’s fees;
10-35 (f) An explanation of the potential benefits of the action or mediation
10-36 and the potential adverse consequences if the association does not
10-37 commence the action or submit the claim to mediation or if the outcome
10-38 is not favorable to the association; and
10-39 (g) All disclosures that are required to be made upon the sale of the
10-40 property.
10-41 3. An association or an attorney for an association shall not employ
10-42 a person to perform destructive tests to determine any damage or injury
10-43 to a unit, common element or limited common element caused by a
10-44 constructional defect unless:
10-45 (a) The person is licensed as a contractor pursuant to chapter 624 of
10-46 NRS;
10-47 (b) The association has obtained the prior written approval of each
10-48 unit’s owner whose unit or interest in the common element or limited
10-49 common element will be affected by such testing;
11-1 (c) The person has provided a written schedule for repairs;
11-2 (d) The person is required to repair all damage resulting from such
11-3 tests in accordance with state laws and local ordinances relating thereto;
11-4 and
11-5 (e) The association or the person so employed obtains all permits
11-6 required to conduct such tests and to repair any damage resulting from
11-7 such tests.
11-8 4. As used in this section, “constructional defect” has the meaning
11-9 ascribed to it in NRS 40.615.
11-10 Sec. 37. 1. Except as otherwise provided in subsection 2 and
11-11 section 36 of this act, an association may commence a civil action only
11-12 upon a vote or written agreement of the owners of the units to which at
11-13 least a majority of the votes of the members of the association are
11-14 allocated. In such a case, the association shall provide written notice to
11-15 the owner of each unit of a meeting at which the commencement of a
11-16 civil action is to be considered or action is to be taken within 21 calendar
11-17 days before the meeting.
11-18 2. The provisions of subsection 1 do not apply to a civil action that is
11-19 commenced:
11-20 (a) By an association for a time-share project governed by the
11-21 provisions of chapter 119A of NRS;
11-22 (b) To enforce the payment of an assessment;
11-23 (c) To enforce the declaration, bylaws or rules of the association;
11-24 (d) To proceed with a counterclaim; or
11-25 (e) To enforce or rescind a contract to which the association is a
11-26 party.
11-27 Sec. 38. 1. Notwithstanding any other provision of this chapter, in
11-28 a common-interest community that has at least 2,000 units and a master
11-29 association, some or all of the authority of the members of the
11-30 association may be exercised by delegates, including the voting rights of
11-31 the members of the association, if the declaration so provides.
11-32 2. For the purpose of determining whether a common-interest
11-33 community has at least 2,000 units, units that a declarant has reserved
11-34 the right to create pursuant to NRS 116.2105 and for which
11-35 developmental rights exist must be included.
11-36 Sec. 39. 1. If a common-interest community is developed in
11-37 separate phases and the declarant, including a successor declarant who
11-38 does not control the association established by the initial declarant, is
11-39 constructing additional common elements that will be added to the
11-40 association’s common elements, the declarant shall:
11-41 (a) Pay all common expenses related to the additional common
11-42 elements;
11-43 (b) Prepare a study of the reserves for the additional common
11-44 elements in accordance with NRS 116.31038; and
11-45 (c) Deliver to the association all reserves required by that section
11-46 before delivery of the common elements to the association.
11-47 2. If a declarant, including a successor declarant who does not
11-48 control the association established by the initial declarant, attempts to
11-49 deliver to the association common elements that have improvements for
12-1 which a study of reserves is required, the declarant that constructed those
12-2 common elements shall, before the delivery of the common elements to
12-3 the association, prepare a study of the reserves for the common elements
12-4 in accordance with NRS 116.31038. The study must be approved by the
12-5 association before the delivery of those common elements to the
12-6 association. If there is a deficiency in the amount of reserves collected by
12-7 the declarant or the association for those common elements, the
12-8 declarant shall deliver the deficiency to the association before delivery of
12-9 those common elements to the association.
12-10 Sec. 40. 1. In a county whose population is 400,000 or more, a
12-11 person who owns or, directly or indirectly, has an interest in, one or more
12-12 units within a planned community that are restricted to residential use by
12-13 the declaration, may use that unit or one of those units for a transient
12-14 commercial use if the governing documents of the association do not
12-15 prohibit such use.
12-16 2. If such a person owns or, directly or indirectly, has an interest in,
12-17 more than one such unit within the planned community, any additional
12-18 unit may be used for a transient commercial use only if:
12-19 (a) The governing documents of the association do not prohibit such
12-20 use; and
12-21 (b) Persons entitled to cast at least a majority of the votes in the
12-22 association approve the transient commercial use of the unit.
12-23 3. The association may establish requirements for such use,
12-24 including the payment of additional fees that are related to any increase
12-25 in services or other costs associated with the transient commercial use of
12-26 the unit.
12-27 4. In addition to taking any action against a person who owns or,
12-28 directly or indirectly, has an interest in a unit for violating any of the
12-29 provisions of this section, the commission may take any action authorized
12-30 by sections 23 and 24 of this act against any person who arranges or
12-31 negotiates for the transient commercial use of a unit in violation of this
12-32 section.
12-33 5. As used in this section:
12-34 (a) “Remuneration” means any compensation, money, rent or other
12-35 valuable consideration given in return for the occupancy, possession or
12-36 use of a unit.
12-37 (b) “Transient commercial use” means the use of a unit, for
12-38 remuneration, as a hostel, hotel, inn, motel, resort, vacation rental or
12-39 other form of transient lodging if the term of the occupancy, possession
12-40 or use of the unit is for less than 30 consecutive calendar days.
12-41 Sec. 41. The executive board of a master association of any
12-42 common-interest community that was created before January 1, 1975,
12-43 and is located in a county whose population is 400,000 or more may
12-44 record an amendment to the declaration pursuant to which the master
12-45 association reallocates the costs of administering the common elements
12-46 of the master association among the units of the common-interest
12-47 community uniformly and based upon the actual costs associated with
12-48 each unit.
13-1 Sec. 42. 1. Notwithstanding any other provision of this chapter, the
13-2 executive board of an association may, without giving notice to the units’
13-3 owners, employ a contractor licensed pursuant to the provisions of
13-4 chapter 624 of NRS and such other persons as are necessary to make
13-5 such repairs to a unit or common element within the common-interest
13-6 community as are required to protect the health, safety and welfare of the
13-7 units’ owners.
13-8 2. If the governing documents of the association require such action
13-9 to be taken at a meeting of the executive board of the association, the
13-10 executive board shall, within 90 days after employing any person
13-11 pursuant to subsection 1, provide written notice to the units’ owners of its
13-12 action and include the action on the agenda of its next regularly
13-13 scheduled meeting.
13-14 Sec. 43. Notwithstanding any other provision of this chapter, if a
13-15 declaration, any recorded instrument related to a common-interest
13-16 community or any contract to which an association is a party provides
13-17 for the imposition of an assessment, fine, penalty or other charge for any
13-18 failure to adhere to a schedule for the completion of the design,
13-19 commencement of the construction or completion of the construction of
13-20 a unit or an improvement within the unit, or for the issuance of any
13-21 necessary permit for the occupancy of the unit or the use of the
13-22 improvement, the assessment, fine, penalty or other charge is enforceable
13-23 if that schedule and the maximum amount of the assessment, fine,
13-24 penalty or other charge are set forth in the declaration, recorded
13-25 instrument or contract.
13-26 Sec. 44. NRS 116.1103 is hereby amended to read as follows:
13-27 116.1103 [In] As used in the declaration and bylaws [(NRS 116.3106),
13-28 unless specifically provided otherwise or] of an association and in this
13-29 chapter, unless the context otherwise requires, [and in this chapter,] the
13-30 words and terms defined in NRS 116.110305 to 116.110393, inclusive,
13-31 and sections 2 to 9, inclusive, of this act have the meanings ascribed to
13-32 them in those sections.
13-33 Sec. 45. NRS 116.110305 is hereby amended to read as follows:
13-34 116.110305 “Administrator” means the administrator of the [real
13-35 estate division of the department of business and industry.] division.
13-36 Sec. 46. NRS 116.11145 is hereby amended to read as follows:
13-37 116.11145 1. To carry out the purposes of this chapter, the [real
13-38 estate] commission, or any member thereof [,] acting on behalf of the
13-39 commission, may issue subpoenas to compel the attendance of witnesses
13-40 and the production of books, records and other papers.
13-41 2. If any person fails to comply with a subpoena issued by the
13-42 commission pursuant to this section , [within 10 days after its issuance,] the
13-43 commission may petition the district court for an order of the court
13-44 compelling compliance with the subpoena.
13-45 3. Upon such a petition, the court shall enter an order directing the
13-46 person subpoenaed to appear before the court at a time and place to be
13-47 fixed by the court in its order, the time to be not more than 10 days after
13-48 the [date] service of the order, and show cause why he has not complied
14-1 with the subpoena. A certified copy must be served upon the person
14-2 subpoenaed.
14-3 4. If it appears to the court that the subpoena was regularly issued by
14-4 the commission, the court shall enter an order compelling compliance with
14-5 the subpoena, and upon failure to obey the order the person shall be dealt
14-6 with as for contempt of court.
14-7 Sec. 47. NRS 116.1116 is hereby amended to read as follows:
14-8 116.1116 1. The office of the ombudsman for owners in common-
14-9 interest communities is hereby created within the [real estate division of
14-10 the department of business and industry.] division.
14-11 2. The administrator shall appoint the ombudsman for owners in
14-12 common-interest communities. The ombudsman for owners in common-
14-13 interest communities is in the unclassified service of the state.
14-14 3. The ombudsman for owners in common-interest communities must
14-15 be qualified by training and experience to perform the duties and functions
14-16 of his office.
14-17 4. The ombudsman for owners in common-interest communities shall:
14-18 (a) Assist in processing claims submitted to mediation or arbitration
14-19 pursuant to NRS 38.300 to 38.360, inclusive;
14-20 (b) Assist owners in common-interest communities to understand their
14-21 rights and responsibilities as set forth in this chapter and the governing
14-22 documents of their associations, including, without limitation, publishing
14-23 materials related to those rights and responsibilities;
14-24 (c) Assist persons appointed or elected to serve [on] as officers or
14-25 members of executive boards of associations to carry out their duties; [and]
14-26 (d) Assist in resolving complaints filed with the office alleging a
14-27 violation of the provisions of this chapter or the governing documents of
14-28 the association; and
14-29 (e) Compile and maintain a registration of each association organized
14-30 within the state which includes, without limitation:
14-31 (1) The name, address and telephone number of the association;
14-32 (2) The name of the person engaged in [property management for]
14-33 the management of the common-interest community or the name of the
14-34 person who manages the property at the site of the common-interest
14-35 community;
14-36 (3) The names, mailing addresses and telephone numbers of the
14-37 members of the executive board of the association;
14-38 (4) The name of the declarant;
14-39 (5) The number of units in the common-interest community; [and]
14-40 (6) The total annual assessment made by the association [.] ;
14-41 (7) The number of liens foreclosed on units within the common-
14-42 interest community for the failure to pay assessments levied against those
14-43 units or fines imposed against units’ owners; and
14-44 (8) The studies of reserves of the association required to be
14-45 conducted pursuant to NRS 116.31152.
14-46 Sec. 48. NRS 116.1117 is hereby amended to read as follows:
14-47 116.1117 1. There is hereby created the account for [the ombudsman
14-48 for owners in] common-interest communities in the state general fund. The
14-49 account must be administered by the administrator.
15-1 2. The fees collected pursuant to NRS 116.31155 must be credited to
15-2 the account.
15-3 3. The interest and income earned on the money in the account, after
15-4 deducting any applicable charges, must be credited to the account.
15-5 4. The money in the account must be used solely to [defray] :
15-6 (a) Defray the costs and expenses of administering the commission and
15-7 the office of the ombudsman for owners in common-interest communities ;
15-8 and [for the payment of fees for a mediator or an arbitrator pursuant to
15-9 NRS 38.330.]
15-10 (b) Subsidize proceedings for mediation and arbitration conducted
15-11 under NRS 38.300 to 38.360, inclusive.
15-12 Sec. 49. NRS 116.1201 is hereby amended to read as follows:
15-13 116.1201 1. Except as otherwise provided in this section and NRS
15-14 116.1203, this chapter applies to all common-interest communities created
15-15 within this state.
15-16 2. This chapter does not apply to:
15-17 (a) Associations created for the limited purpose of maintaining:
15-18 (1) The landscape of the common elements of a common-interest
15-19 community;
15-20 (2) Facilities for flood control; or
15-21 (3) A rural agricultural residential common-interest community.
15-22 (b) A planned community in which all units are restricted exclusively to
15-23 nonresidential use unless the declaration provides that the chapter does
15-24 apply to that planned community. This chapter applies to a planned
15-25 community containing both units that are restricted exclusively to
15-26 nonresidential use and other units that are not so restricted, only if the
15-27 declaration so provides or the real estate comprising the units that may be
15-28 used for residential purposes would be a planned community in the absence
15-29 of the units that may not be used for residential purposes.
15-30 (c) Common-interest communities or units located outside of this state,
15-31 but the provisions of NRS 116.4102 to 116.4108, inclusive, apply to all
15-32 contracts for the disposition thereof signed in this state by any party unless
15-33 exempt under subsection 2 of NRS 116.4101.
15-34 (d) A common-interest community that was created before January 1,
15-35 1992, is located in a county whose population is less than 50,000, and
15-36 has less than 50 percent of the units within the community put to
15-37 residential use, unless a majority of the units’ owners otherwise elect in
15-38 writing.
15-39 3. The provisions of this chapter do not:
15-40 (a) Prohibit a common-interest community created before January 1,
15-41 1992, from providing for separate classes of voting for the units’ owners of
15-42 the association;
15-43 (b) Require a common-interest community created before January 1,
15-44 1992, to comply with the provisions of NRS 116.2101 to 116.2122,
15-45 inclusive;
15-46 (c) Invalidate any assessments that were imposed on or before
15-47 October 1, 1999, by a common-interest community created before
15-48 January 1, 1992; or
16-1 (d) Prohibit a common-interest community created before January 1,
16-2 1992, from providing for a representative form of government [.] in
16-3 accordance with section 38 of this act.
16-4 4. The provisions of chapters 117 and 278A of NRS do not apply to
16-5 common-interest communities.
16-6 5. For the purposes of this section, the [administrator] commission
16-7 shall establish, by regulation, the criteria for determining whether an
16-8 association is created for the limited purpose of maintaining the landscape
16-9 of the common elements of a common-interest community, maintaining
16-10 facilities for flood control or maintaining a rural agricultural residential
16-11 common-interest community.
16-12 Sec. 50. NRS 116.1206 is hereby amended to read as follows:
16-13 116.1206 1. Any provision contained in a declaration, bylaw or
16-14 other governing document of a common-interest community [created
16-15 before January 1, 1992,] in effect on October 1, 2001, that does not
16-16 conform to the provisions of this chapter [shall] :
16-17 (a) Shall be deemed to conform with those provisions by operation of
16-18 law [, and any such declaration, bylaw or other governing document is not
16-19 required to be amended to conform to those provisions.] ; and
16-20 (b) May be changed to conform to those provisions and may be so
16-21 changed by a vote of the executive board of the association without
16-22 compliance with the procedural requirements generally applicable to the
16-23 adoption of an amendment to the declaration, bylaws or other governing
16-24 document.
16-25 2. In the case of amendments to the declaration, bylaws or plats and
16-26 plans of any common-interest community created before January 1, 1992:
16-27 (a) If the result accomplished by the amendment was permitted by law
16-28 before January 1, 1992, the amendment may be made either in accordance
16-29 with that law, in which case that law applies to that amendment, or it may
16-30 be made under this chapter; and
16-31 (b) If the result accomplished by the amendment is permitted by this
16-32 chapter, and was not permitted by law before January 1, 1992, the
16-33 amendment may be made under this chapter.
16-34 3. An amendment to the declaration, bylaws or plats and plans
16-35 authorized by this section to be made under this chapter must be adopted in
16-36 conformity with the applicable provisions of chapter 117 or 278A of NRS
16-37 and with the procedures and requirements specified by those instruments.
16-38 If an amendment grants to any person any rights, powers or privileges
16-39 permitted by this chapter, all correlative obligations, liabilities and
16-40 restrictions in this chapter also apply to that person.
16-41 Sec. 51. NRS 116.2103 is hereby amended to read as follows:
16-42 116.2103 1. [All provisions of the declaration and bylaws are
16-43 severable.] The inclusion in a governing document of an association of a
16-44 provision that violates any provision of this chapter does not render any
16-45 other provision of the governing document invalid or otherwise
16-46 unenforceable if such other provisions can be given effect in accordance
16-47 with their original intent and the provisions of this chapter.
17-1 2. The rule against perpetuities and NRS 111.103 to 111.1039,
17-2 inclusive, do not apply to defeat any provision of the declaration, bylaws,
17-3 rules or regulations adopted pursuant to NRS 116.3102.
17-4 3. In the event of a conflict between the provisions of the declaration
17-5 and the bylaws, the declaration prevails except to the extent the declaration
17-6 is inconsistent with this chapter.
17-7 4. Title to a unit and common elements is not rendered unmarketable
17-8 or otherwise affected by reason of an insubstantial failure of the declaration
17-9 to comply with this chapter. Whether a substantial failure impairs
17-10 marketability is not affected by this chapter.
17-11 Sec. 52. NRS 116.2105 is hereby amended to read as follows:
17-12 116.2105 1. The declaration must contain:
17-13 (a) The names of the common-interest community and the association
17-14 and a statement that the common-interest community is either a
17-15 condominium, cooperative or planned community;
17-16 (b) The name of every county in which any part of the common-interest
17-17 community is situated;
17-18 (c) A sufficient description of the real estate included in the common-
17-19 interest community;
17-20 (d) A statement of the maximum number of units that the declarant
17-21 reserves the right to create;
17-22 (e) In a condominium or planned community, a description of the
17-23 boundaries of each unit created by the declaration, including the unit’s
17-24 identifying number or, in a cooperative, a description, which may be by
17-25 plats or plans, of each unit created by the declaration, including the unit’s
17-26 identifying number, its size or number of rooms, and its location within a
17-27 building if it is within a building containing more than one unit;
17-28 (f) A description of any limited common elements, other than those
17-29 specified in subsections 2 and 4 of NRS 116.2102, as provided in
17-30 paragraph (g) of subsection 2 of NRS 116.2109 and, in a planned
17-31 community, any real estate that is or must become common elements;
17-32 (g) A description of any real estate, except real estate subject to
17-33 developmental rights, that may be allocated subsequently as limited
17-34 common elements, other than limited common elements specified in
17-35 subsections 2 and 4 of NRS 116.2102, together with a statement that they
17-36 may be so allocated;
17-37 (h) A description of any developmental rights [(NRS 116.11034)] and
17-38 other special declarant’s rights [(NRS 116.110385)] reserved by the
17-39 declarant, together with a legally sufficient description of the real estate to
17-40 which each of those rights applies, and a time within which each of those
17-41 rights must be exercised;
17-42 (i) If any developmental right may be exercised with respect to different
17-43 parcels of real estate at different times, a statement to that effect together
17-44 with:
17-45 (1) Either a statement fixing the boundaries of those portions and
17-46 regulating the order in which those portions may be subjected to the
17-47 exercise of each developmental right or a statement that no assurances are
17-48 made in those regards; and
18-1 (2) A statement whether, if any developmental right is exercised in
18-2 any portion of the real estate subject to that developmental right, that
18-3 developmental right must be exercised in all or in any other portion of the
18-4 remainder of that real estate;
18-5 (j) Any other conditions or limitations under which the rights described
18-6 in paragraph (h) may be exercised or will lapse;
18-7 (k) An allocation to each unit of the allocated interests in the manner
18-8 described in NRS 116.2107 [;] and a statement of whether voting by
18-9 delegates is required or permitted pursuant to section 38 of this act;
18-10 (l) Any restrictions:
18-11 (1) On use, occupancy and alienation of the units; and
18-12 (2) On the amount for which a unit may be sold or on the amount that
18-13 may be received by a unit’s owner on sale, condemnation or casualty to the
18-14 unit or to the common-interest community, or on termination of the
18-15 common-interest community;
18-16 (m) The file number and book or other information to show where
18-17 easements and licenses are recorded appurtenant to or included in the
18-18 common-interest community or to which any portion of the common-
18-19 interest community is or may become subject by virtue of a reservation in
18-20 the declaration; and
18-21 (n) All matters required by NRS 116.2106 to 116.2109, inclusive,
18-22 116.2115 , [and] 116.2116 and 116.31032.
18-23 2. The declaration may contain any other matters the declarant
18-24 considers appropriate.
18-25 Sec. 53. NRS 116.2111 is hereby amended to read as follows:
18-26 116.2111 [Subject]
18-27 1. Except as otherwise provided in this section and subject to the
18-28 provisions of the declaration and other provisions of law, a unit’s owner:
18-29 [1.] (a) May make any improvements or alterations to his unit that do
18-30 not impair the structural integrity or mechanical systems or lessen the
18-31 support of any portion of the common-interest community;
18-32 [2.] (b) May not change the appearance of the common elements, or the
18-33 exterior appearance of a unit or any other portion of the common-interest
18-34 community, without permission of the association; and
18-35 [3.] (c) After acquiring an adjoining unit or an adjoining part of an
18-36 adjoining unit, may remove or alter any intervening partition or create
18-37 apertures therein, even if the partition in whole or in part is a common
18-38 element, if those acts do not impair the structural integrity or mechanical
18-39 systems or lessen the support of any portion of the common-interest
18-40 community. Removal of partitions or creation of apertures under this
18-41 [subsection] paragraph is not an alteration of boundaries.
18-42 2. An association may not:
18-43 (a) Require the removal of any structure, fixture or other
18-44 improvement made to a unit if it was approved by the association in
18-45 writing before it was installed or constructed in accordance with
18-46 procedures set forth in the governing documents of the association.
18-47 (b) Unreasonably restrict, prohibit or otherwise impede the lawful
18-48 rights of a unit’s owner to have reasonable access to his unit.
19-1 (c) Prohibit or unreasonably restrict or withhold approval for a unit’s
19-2 owner to include or add in or to a unit:
19-3 (1) An apparatus required for the use of solar energy;
19-4 (2) Improvements such as ramps, railings or elevators that are
19-5 necessary or desirable to increase the unit’s owner’s access to his unit if
19-6 an occupant of the unit is disabled; or
19-7 (3) Shutters or additional locks that are desirable to make a unit’s
19-8 owner feel safe in his unit.
19-9 3. If the improvement or alteration is visible from any other portion
19-10 of the common-interest community, any device or other improvement
19-11 included or added in or to a unit pursuant to paragraph (b) or (c) of
19-12 subsection 2 must be added or installed in accordance with the
19-13 procedures set forth in the governing documents of the association and
19-14 must be selected or designed to the maximum extent practicable to be
19-15 compatible with the style of the common-interest community.
19-16 Sec. 54. NRS 116.31031 is hereby amended to read as follows:
19-17 116.31031 1. If a unit’s owner, or a tenant or guest of a unit’s owner,
19-18 does not comply with a provision of the governing documents of an
19-19 association, the executive board of the association may, if the governing
19-20 documents so provide:
19-21 (a) Prohibit, for a reasonable time, the unit’s owner, or the tenant or
19-22 guest of the unit’s owner, from:
19-23 (1) Voting on matters related to the common-interest community.
19-24 (2) Usingthe common elements. The provisions of this subparagraph
19-25 do not prohibit the unit’s owner, or the tenant or guest of the unit’s owner,
19-26 from using any vehicular or pedestrian ingress or egress to go to or from
19-27 the unit, including any area used for parking.
19-28 (b) Require the unit’s owner, or the tenant or guest of the unit’s owner,
19-29 to pay a fine for each failure to comply . [that does not threaten the health
19-30 and welfare of the common-interest community.] The fine must be
19-31 commensurate with the severity of the violation . [, but] If the failure to
19-32 comply does not threaten the health, safety or welfare of the common-
19-33 interest community, the fine must not exceed $100 for each violation . [or
19-34 a total amount of $500, whichever is less.]
19-35 2. If a fine is imposed pursuant to subsection 1 and the violation is not
19-36 cured within 14 days or a longer period as may be established by the
19-37 executive board, the violation shall be deemed a continuing violation.
19-38 Thereafter, the executive board may impose an additional fine for the
19-39 violation for each 7-day period or portion thereof that the violation is not
19-40 cured [.] , but in no event may the cumulative total amount of the
19-41 additional fine exceed $1,000 per calendar year for each continuing
19-42 violation. Any additional fine for each continuing violation may be
19-43 imposed without notice and an opportunity to be heard.
19-44 3. Except as otherwise provided in subsection 2, the imposition of a
19-45 fine pursuant to this section must comply with the requirements of
19-46 subsection 6 of NRS 116.31065.
19-47 Sec. 55. NRS 116.31034 is hereby amended to read as follows:
19-48 116.31034 1. Except as otherwise provided in subsection 5 of NRS
19-49 116.212, not later than the termination of any period of declarant’s control,
20-1 the units’ owners shall elect an executive board of at least three members,
20-2 at least a majority of whom must be units’ owners. The executive board
20-3 shall elect the officers. The members and officers of the executive board
20-4 shall take office upon election.
20-5 2. The term of office of a member of the executive board may not
20-6 exceed 2 years. A member of the executive board may be elected to
20-7 succeed himself. The governing documents of the association must [set] :
20-8 (a) Set forth the month during which elections for the members of the
20-9 executive board must be held after the termination of any period of the
20-10 declarant’s control.
20-11 (b) Provide for terms of office that are staggered. The provisions of
20-12 this paragraph do not apply to members of the executive board appointed
20-13 by the declarant.
20-14 3. Not less than 30 days before the preparation of a ballot for the
20-15 election of members of the executive board, the secretary or other officer
20-16 specified in the bylaws of the association shall cause notice to be given to
20-17 each unit’s owner of his eligibility to serve as a member of the executive
20-18 board. Each unit’s owner who is qualified to serve as a member of the
20-19 executive board may have his name placed on the ballot along with the
20-20 names of the nominees selected by the members of the executive board or a
20-21 nominating committee established by the association.
20-22 4. A unit’s owner may not be an officer or member of the executive
20-23 board if he or any member of his immediate family engages in the
20-24 management of the common-interest community.
20-25 5. An officer, employee, agent or director of a corporate owner of a
20-26 unit, a trustee or designated beneficiary of a trust that owns a unit, a partner
20-27 of a partnership that owns a unit, a member or manager of a limited-
20-28 liability company that owns a unit, and a fiduciary of an estate that owns a
20-29 unit may be an officer or member of the executive board. In all events
20-30 where the person serving or offering to serve as an officer or member of
20-31 the executive board is not the record owner, he shall file proof in the
20-32 records of the association that:
20-33 (a) He is associated with the corporate owner, trust, partnership ,
20-34 limited-liability company or estate as required by this subsection; and
20-35 (b) Identifies the unit or units owned by the corporate owner, trust,
20-36 partnership , limited-liability company or estate.
20-37 [5. The]
20-38 6. Except as otherwise provided in section 38 of this act, the election
20-39 of any member of the executive board must be conducted by secret written
20-40 ballot. The secretary or other officer specified in the bylaws of the
20-41 association shall cause to be sent prepaid by United States mail to the
20-42 mailing address of each unit within the common-interest community or to
20-43 any other mailing address designated in writing by the unit’s owner, a
20-44 secret ballot and a return envelope.
20-45 [6.] 7. Each member of the executive board shall, within 30 days after
20-46 his appointment or election, certify in writing that he has read and
20-47 understands the governing documents of the association and the provisions
20-48 of this chapter to the best of his ability.
21-1 Sec. 56. NRS 116.31036 is hereby amended to read as follows:
21-2 116.31036 1. Notwithstanding any provision of the declaration or
21-3 bylaws to the contrary, the units’ owners, by a two-thirds vote of all
21-4 persons [present and] entitled to vote at any meeting of the units’ owners at
21-5 which a quorum is present, may remove any member of the executive
21-6 board with or without cause, other than a member appointed by the
21-7 declarant.
21-8 2. The removal of any member of the executive board must be
21-9 conducted by secret written ballot. The secretary or other officer specified
21-10 in the bylaws of the association shall cause to be sent prepaid by United
21-11 States mail to the mailing address of each unit within the common-
21-12 interest community or to any other mailing address designated in writing
21-13 by the unit’s owner, a secret ballot and a return envelope.
21-14 3. If a member of an executive board is sued for liability for actions
21-15 undertaken in his role as a member of the board, the association shall
21-16 indemnify him for his losses or claims, and undertake all costs of defense,
21-17 unless it is proven that he acted with willful or wanton misfeasance or with
21-18 gross negligence. After such proof , the association is no longer liable for
21-19 the cost of defense, and may recover costs already expended from the
21-20 member of the executive board who so acted. Members of the executive
21-21 board are not personally liable to the victims of crimes occurring on the
21-22 property. Punitive damages may not be recovered against the association,
21-23 but may be recovered from persons whose activity gave rise to the
21-24 damages.
21-25 Sec. 57. NRS 116.3106 is hereby amended to read as follows:
21-26 116.3106 1. The bylaws of the association must provide:
21-27 (a) The number of members of the executive board and the titles of the
21-28 officers of the association;
21-29 (b) For election by the executive board of a president, treasurer,
21-30 secretary and any other officers of the association the bylaws specify;
21-31 (c) The qualifications, powers and duties, terms of office and manner of
21-32 electing and removing officers of the association and members of the
21-33 executive board and filling vacancies;
21-34 (d) Which, if any, of its powers the executive board or officers may
21-35 delegate to other persons or to a [managing agent;] person engaged in the
21-36 management of the common-interest community;
21-37 (e) Which of its officers may prepare, execute, certify and record
21-38 amendments to the declaration on behalf of the association;
21-39 (f) Procedural rules for conducting meetings of the association; [and]
21-40 (g) A method for amending the bylaws [.] ; and
21-41 (h) Procedural rules for conducting elections.
21-42 2. Except as otherwise provided in the declaration, the bylaws may
21-43 provide for any other matters the association deems necessary and
21-44 appropriate.
21-45 3. The bylaws must be written in plain English.
21-46 Sec. 58. NRS 116.31065 is hereby amended to read as follows:
21-47 116.31065 The rules adopted by an association:
21-48 1. Must be reasonably related to the purpose for which they are
21-49 adopted.
22-1 2. Must be sufficiently explicit in their prohibition, direction or
22-2 limitation to inform a unit’s owner, or a tenant or guest of a unit’s owner,
22-3 of any action or omission required for compliance.
22-4 3. Must not be adopted to evade any obligation of the association.
22-5 4. Must be consistent with the governing documents of the association
22-6 and must not arbitrarily restrict conduct or require the construction of any
22-7 capital improvement by a unit’s owner that is not required by the governing
22-8 documents of the association.
22-9 5. Must be uniformly enforced under the same or similar
22-10 circumstances against all units’ owners. [Any rule that is not so uniformly
22-11 enforced may not be enforced against any unit’s owner.]
22-12 6. May be enforced by the assessment of a fine only if:
22-13 (a) The association has given written notice, by certified mail, to the
22-14 person alleged to have violated the rule [has received notice of the alleged
22-15 violation that informs him of his opportunity to request a hearing on the
22-16 alleged violation.] that:
22-17 (1) Sets forth the alleged violation and any required corrective
22-18 action; and
22-19 (2) Includes a statement that he is entitled to a hearing on the
22-20 alleged violation before the imposition of the fine;
22-21 (b) The person alleged to have violated the rule is afforded an
22-22 opportunity to cure the alleged violation before the imposition of the fine;
22-23 and
22-24 (c) At least 30 days before the alleged violation, the person alleged to
22-25 have violated the rule was given written notice of the rule or any
22-26 amendment to the rule.
22-27 Sec. 59. NRS 116.31083 is hereby amended to read as follows:
22-28 116.31083 1. A meeting of the executive board of an association
22-29 must be held at least once every 90 days.
22-30 2. Except in an emergency or unless the bylaws of an association
22-31 require a longer period of notice, the secretary or other officer specified in
22-32 the bylaws of the association shall, not less than 10 days before the date of
22-33 a meeting of the executive board, cause notice of the meeting to be given to
22-34 the units’ owners. Such notice must be:
22-35 (a) Sent prepaid by United States mail to the mailing address of each
22-36 unit within the common-interest community or to any other mailing
22-37 address designated in writing by the unit’s owner; or
22-38 (b) Published in a newsletter or other similar publication that is
22-39 circulated to each unit’s owner.
22-40 3. In an emergency, the secretary or other officer specified in the
22-41 bylaws of the association shall, if practicable, cause notice of the meeting
22-42 to be sent prepaid by United States mail to the mailing address of each unit
22-43 within the common-interest community. If delivery of the notice in this
22-44 manner is impracticable, the notice must be hand-delivered to each unit
22-45 within the common-interest community or posted in a prominent place or
22-46 places within the common elements of the association.
22-47 4. The notice of a meeting of the executive board of an association
22-48 must state the time and place of the meeting and include a copy of the
22-49 agenda for the meeting or the date on which and the locations where copies
23-1 of the agenda may be conveniently obtained by the units’ owners of the
23-2 association. The notice must include notification of the right of a unit’s
23-3 owner to:
23-4 (a) Have a copy of the minutes or a summary of the minutes of the
23-5 meeting distributed to him upon request and, if required by the executive
23-6 board, upon payment to the association of the cost of making the
23-7 distribution.
23-8 (b) Speak to the association or executive board, unless the executive
23-9 board is meeting in executive session.
23-10 5. The agenda of the meeting of the executive board of an association
23-11 must comply with the provisions of subsection 3 of NRS 116.3108. The
23-12 period required to be devoted to comments by units’ owners and discussion
23-13 of those comments must be scheduled for the beginning of each meeting.
23-14 In an emergency, the executive board may take action on an item which is
23-15 not listed on the agenda as an item on which action may be taken.
23-16 6. At least once every 90 days, unless the declaration or bylaws of the
23-17 association impose more stringent standards, the executive board shall
23-18 review at one of its meetings:
23-19 (a) A current reconciliation of the operating account of the association;
23-20 (b) A current reconciliation of the reserve account of the association;
23-21 (c) The actual revenues and expenses for the reserve account, compared
23-22 to the budget for that account for the current year;
23-23 (d) The latest account statements prepared by the financial institutions
23-24 in which the accounts of the association are maintained;
23-25 (e) An income and expense statement, prepared on at least a quarterly
23-26 basis, for the operating and reserve accounts of the association; and
23-27 (f) The current status of any civil action or claim submitted to
23-28 arbitration or mediation in which the association is a party.
23-29 7. [The] Except as otherwise provide in this subsection, the minutes
23-30 of a meeting of the executive board of an association must [be] :
23-31 (a) Include:
23-32 (1) The date, time and place of the meeting;
23-33 (2) Those members of the executive board who were present and
23-34 those members who were absent;
23-35 (3) The substance of all matters proposed, discussed or decided and,
23-36 at the request of any member of the executive board, a record of each
23-37 member’s vote on any matter decided by vote; and
23-38 (4) The substance of remarks made by any unit’s owner who
23-39 addresses the executive board if he requests that the minutes reflect his
23-40 remarks or, if he has prepared written remarks, a copy of his prepared
23-41 remarks if he submits a copy for inclusion;
23-42 (b) Be maintained by the association until the common-interest
23-43 community is terminated; and
23-44 (c) Be made available to the units’ owners in accordance with the
23-45 provisions of subsection 5 of NRS 116.3108.
23-46 The executive board of an association may establish reasonable
23-47 limitations on materials, remarks or other information to be included in
23-48 the minutes of its meetings.
24-1 8. A unit’s owner may record on audiotape or any other means of
24-2 sound reproduction a meeting of the executive board, unless the board is
24-3 meeting in executive session, if the members of the board who are in
24-4 attendance are notified of the intent of the unit’s owner to record the
24-5 meeting.
24-6 9. As used in this section, “emergency” means any occurrence or
24-7 combination of occurrences that:
24-8 (a) Could not have been reasonably foreseen;
24-9 (b) Affects the health, welfare and safety of the units’ owners of the
24-10 association;
24-11 (c) Requires the immediate attention of, and possible action by, the
24-12 executive board; and
24-13 (d) Makes it impracticable to comply with the provisions of subsection
24-14 2 or 5.
24-15 Sec. 60. NRS 116.31085 is hereby amended to read as follows:
24-16 116.31085 1. Except as otherwise provided in this section, a unit’s
24-17 owner may attend any meeting of the units’ owners of the association or of
24-18 the executive board and speak at any such meeting. The executive board
24-19 may establish reasonable limitations on the time a unit’s owner may speak
24-20 at such a meeting.
24-21 2. An executive board may meet in executive session to:
24-22 (a) Consult with the attorney for the association on matters relating to
24-23 proposed or pending litigation if the contents of the discussion would
24-24 otherwise be governed by the privilege set forth in NRS 49.035 to 49.115,
24-25 inclusive;
24-26 (b) Discuss [matters relating to personnel;] an employee of the
24-27 association or an employee of a person engaged in the management of
24-28 the common-interest community who is working solely for the
24-29 association; or
24-30 (c) Discuss a violation of the governing documents alleged to have been
24-31 committed by a unit’s owner, including, without limitation, the failure to
24-32 pay an assessment, except as otherwise provided in subsection 3.
24-33 3. An executive board shall meet in executive session to hold a hearing
24-34 on an alleged violation of the governing documents unless the [unit’s
24-35 owner] person who allegedly committed the violation requests in writing
24-36 that the hearing be conducted by the executive board at an open meeting.
24-37 The [unit’s owner] person who is alleged to have committed the violation
24-38 may attend the [hearing] executive session and testify concerning the
24-39 alleged violation, but may be excluded by the executive board from any
24-40 other portion of the [hearing,] executive session, including, without
24-41 limitation, the deliberations of the executive board.
24-42 4. Except as otherwise provided in this subsection, any matter
24-43 discussed in executive session must be generally noted in the minutes of
24-44 the meeting of the executive board. The executive board shall maintain
24-45 minutes of any decision made pursuant to subsection 3 and, upon request,
24-46 provide a copy of the decision to the [unit’s owner] person who was the
24-47 subject of the [hearing] executive session or to his designated
24-48 representative.
25-1 5. Except as otherwise provided in subsection 3, a unit’s owner is not
25-2 entitled to attend or speak at a meeting of the executive board held in
25-3 executive session.
25-4 Sec. 61. NRS 116.3109 is hereby amended to read as follows:
25-5 116.3109 1. Except as otherwise provided in this section and unless
25-6 the bylaws provide otherwise, a quorum is present throughout any meeting
25-7 of the association if persons entitled to cast 20 percent of the votes that
25-8 may be cast for election of the executive board are present in person or by
25-9 proxy at the beginning of the meeting.
25-10 2. If the governing documents of an association provide for a
25-11 quorum at a meeting of the association that is greater than 20 percent of
25-12 the votes that may be cast for election of the executive board, and such a
25-13 meeting for which proper notice has been given cannot be held because a
25-14 quorum is not present, the units’ owners in attendance, either in person
25-15 or by proxy in accordance with the governing documents of the
25-16 association, may adjourn the meeting to a time that is not less than 48
25-17 hours or more than 30 days from the date of the meeting. At the
25-18 subsequent meeting, a quorum is present if persons entitled to cast 20
25-19 percent of the votes that may be cast for election of the executive board
25-20 are present in person or by proxy. If fewer units’ owners than that
25-21 required by the quorum requirement contained in the governing
25-22 documents are present at the subsequent meeting in person or by proxy
25-23 in accordance with the governing documents, only those matters
25-24 included on the agenda of the original meeting may be voted upon.
25-25 3. Unless the bylaws specify a larger percentage, a quorum is deemed
25-26 present throughout any meeting of the executive board if persons entitled
25-27 to cast 50 percent of the votes on that board are present at the beginning of
25-28 the meeting.
25-29 [3.] 4. For the purposes of [determining whether a quorum is present
25-30 for the election of] electing any member of the executive board, a quorum
25-31 is not required and only the secret written ballots that are returned to the
25-32 association may be counted.
25-33 Sec. 62. NRS 116.311 is hereby amended to read as follows:
25-34 116.311 1. If only one of several owners of a unit is present at a
25-35 meeting of the association, that owner is entitled to cast all the votes
25-36 allocated to that unit. If more than one of the owners are present, the votes
25-37 allocated to that unit may be cast only in accordance with the agreement of
25-38 a majority in interest of the owners, unless the declaration expressly
25-39 provides otherwise. There is majority agreement if any one of the owners
25-40 cast the votes allocated to that unit without protest made promptly to the
25-41 person presiding over the meeting by any of the other owners of the unit.
25-42 2. Except as otherwise provided in this section, votes allocated to a
25-43 unit may be cast pursuant to a proxy executed by a unit’s owner. A unit’s
25-44 owner may give a proxy only to a member of his immediate family, a
25-45 tenant of the unit’s owner who resides in the common-interest community
25-46 or another unit’s owner who resides in the common-interest community. If
25-47 a unit is owned by more than one person, each owner of the unit may vote
25-48 or register protest to the casting of votes by the other owners of the unit
25-49 through an executed proxy. A unit’s owner may revoke a proxy given
26-1 pursuant to this section only by actual notice of revocation to the person
26-2 presiding over a meeting of the association. A proxy is void if:
26-3 (a) It is not dated or purports to be revocable without notice;
26-4 (b) It does not designate the votes that must be cast on behalf of the
26-5 unit’s owner who executed the proxy; or
26-6 (c) The holder of the proxy does not disclose at the beginning of the
26-7 meeting for which the proxy is executed the number of proxies pursuant to
26-8 which he will be casting votes . [and the voting instructions received for
26-9 each proxy.]
26-10 A proxy terminates immediately after the conclusion of the meeting for
26-11 which it was executed. A vote may not be cast pursuant to a proxy for the
26-12 election or removal of a member of the executive board of an association.
26-13 3. Only a vote cast in person, by secret ballot or by proxy, may be
26-14 counted.
26-15 4. If the declaration requires that votes on specified matters affecting
26-16 the common-interest community be cast by lessees rather than units’
26-17 owners of leased units:
26-18 (a) The provisions of subsections 1 and 2 apply to lessees as if they
26-19 were units’ owners;
26-20 (b) Units’ owners who have leased their units to other persons may not
26-21 cast votes on those specified matters; and
26-22 (c) Lessees are entitled to notice of meetings, access to records,
26-23 and other rights respecting those matters as if they were units’
26-24 owners.
26-25 Units’ owners must also be given notice, in the manner provided in NRS
26-26 116.3108, of all meetings at which lessees are entitled to vote.
26-27 5. No votes allocated to a unit owned by the association may be cast.
26-28 6. Votes cast for the election or removal of a member of the executive
26-29 board of an association must be counted in public.
26-30 Sec. 63. NRS 116.31139 is hereby amended to read as follows:
26-31 116.31139 1. An association may employ a [person engaged in
26-32 property management for the common-interest community.] community
26-33 manager.
26-34 2. Except as otherwise provided in this section, a [person engaged in
26-35 property management for a common-interest community] community
26-36 manager must:
26-37 (a) Hold a permit to engage in property management that is issued
26-38 pursuant to the provisions of chapter 645 of NRS; or
26-39 (b) Hold a certificate issued by the [real estate commission] division
26-40 pursuant to subsection 3.
26-41 3. The [real estate] commission shall provide by regulation for the
26-42 issuance of certificates for [the management of common-interest
26-43 communities to persons] community managers who are not otherwise
26-44 authorized to engage in property management pursuant to the provisions of
26-45 chapter 645 of NRS. The regulations:
26-46 (a) Must establish the qualifications for the issuance of such a
26-47 certificate, including the education and experience required to obtain such
26-48 a certificate;
27-1 (b) May require applicants to pass an examination in order to obtain a
27-2 certificate;
27-3 (c) Must establish standards of practice for [persons engaged in property
27-4 management for a common-interest community;] community managers;
27-5 (d) Must establish the grounds for initiating disciplinary action against a
27-6 person to whom a certificate has been issued, including, without limitation,
27-7 the grounds for placing conditions, limitations or restrictions on a
27-8 certificate and for the suspension or revocation of a certificate; and
27-9 (e) Must establish rules of practice and procedure for conducting
27-10 disciplinary hearings. No certificate may be revoked or suspended without
27-11 first giving notice and holding a hearing pursuant to section 19 of this
27-12 act.
27-13 The [real estate division of the department of business and industry]
27-14 division may investigate the [property] community managers to whom
27-15 certificates have been issued to ensure their compliance with the standards
27-16 of practice adopted pursuant to this subsection and collect a fee for the
27-17 issuance of a certificate by the [commission] division in an amount not to
27-18 exceed the administrative costs of issuing the certificate.
27-19 4. The provisions of subsection 2 do not apply to:
27-20 (a) A person who is engaged in [property management for] the
27-21 management of a common-interest community on October 1, [1999,]
27-22 2001, and is granted an exemption from the requirements of subsection 2
27-23 by the administrator upon demonstration that he is qualified and competent
27-24 to engage in [property management for] the management of a common-
27-25 interest community.
27-26 (b) A financial institution.
27-27 (c) An attorney licensed to practice in this state.
27-28 (d) A trustee.
27-29 (e) An employee of a corporation who manages only the property of the
27-30 corporation [.] , unless that corporation is also an association.
27-31 (f) A declarant.
27-32 (g) A receiver.
27-33 [5. As used in this section, “property management” means the
27-34 physical, administrative or financial maintenance and management of real
27-35 property, or the supervision of those activities for a fee, commission or
27-36 other compensation or valuable consideration.]
27-37 (h) An officer or member of the executive board of an association who
27-38 acts as a community manager for the association.
27-39 Sec. 64. NRS 116.3115 is hereby amended to read as follows:
27-40 116.3115 1. Until the association makes an assessment for common
27-41 expenses, the declarant shall pay all common expenses. After an
27-42 assessment has been made by the association, assessments must be made at
27-43 least annually, based on a budget adopted at least annually by the
27-44 association in accordance with the requirements set forth in NRS
27-45 116.31151. Except for an association for a time-share project governed by
27-46 the provisions of chapter 119A of NRS, and unless the declaration imposes
27-47 more stringent standards, the budget must include a budget for the daily
27-48 operation of the association and the money for the reserve required by
27-49 paragraph (b) of subsection 2.
28-1 2. Except for assessments under subsections 4 to 7, inclusive:
28-2 (a) All common expenses, including a reserve, must be assessed against
28-3 all the units in accordance with the allocations set forth in the declaration
28-4 pursuant to subsections 1 and 2 of NRS 116.2107.
28-5 (b) The association shall establish an adequate reserve, funded on a
28-6 reasonable basis, for the repair, replacement and restoration of the major
28-7 components of the common elements. The reserve may be used only for
28-8 those purposes, including, without limitation, repairing, replacing and
28-9 restoring roofs, roads and sidewalks, and must not be used for daily
28-10 maintenance.
28-11 3. Any past due assessment for common expenses or installment
28-12 thereof bears interest at the rate established by the association not
28-13 exceeding 18 percent per year.
28-14 4. To the extent required by the declaration:
28-15 (a) Any common expense associated with the maintenance, repair,
28-16 restoration or replacement of a limited common element must be assessed
28-17 against the units to which that limited common element is assigned,
28-18 equally, or in any other proportion the declaration provides;
28-19 (b) Any common expense or portion thereof benefiting fewer than all of
28-20 the units must be assessed exclusively against the units benefited; and
28-21 (c) The costs of insurance must be assessed in proportion to risk and the
28-22 costs of utilities must be assessed in proportion to usage.
28-23 5. Assessments to pay a judgment against the association may be made
28-24 only against the units in the common-interest community at the time the
28-25 judgment was entered, in proportion to their liabilities for common
28-26 expenses.
28-27 6. If any common expense is caused by the misconduct of any unit’s
28-28 owner, the association may assess that expense exclusively against his unit.
28-29 7. The association of a common-interest community created before
28-30 January 1, 1992, is not required to make an assessment against a vacant lot
28-31 located within the community that is owned by the declarant.
28-32 8. If liabilities for common expenses are reallocated, assessments for
28-33 common expenses and any installment thereof not yet due must be
28-34 recalculated in accordance with the reallocated liabilities.
28-35 9. The association shall provide written notice to the owner of each
28-36 unit of a meeting at which an assessment for a capital improvement [or the
28-37 commencement of a civil action] is to be considered or action is to be taken
28-38 on such an assessment at least 21 calendar days before the meeting.
28-39 [Except as otherwise provided in this subsection, the association may
28-40 commence a civil action only upon a vote or written agreement of the
28-41 owners of units to which at least a majority of the votes of the members of
28-42 the association are allocated. The provisions of this subsection do not apply
28-43 to a civil action that is commenced:
28-44 (a) By an association for a time-share project governed by the
28-45 provisions of chapter 119A of NRS;
28-46 (b) To enforce the payment of an assessment;
28-47 (c) To enforce the declaration, bylaws or rules of the association;
28-48 (d) To proceed with a counterclaim; or
29-1 (e) To protect the health, safety and welfare of the members of the
29-2 association. If a civil action is commenced pursuant to this paragraph
29-3 without the required vote or agreement, the action must be ratified within
29-4 90 days after the commencement of the action by a vote or written
29-5 agreement of the owners of the units to which at least a majority of votes of
29-6 the members of the association are allocated. If the association, after
29-7 making a good faith effort, cannot obtain the required vote or agreement to
29-8 commence or ratify such a civil action, the association may thereafter seek
29-9 to dismiss the action without prejudice for that reason only if a vote or
29-10 written agreement of the owners of the units to which at least a majority of
29-11 votes of the members of the association are allocated was obtained at the
29-12 time the approval to commence or ratify the action was sought.
29-13 10. At least 10 days before an association commences or seeks to
29-14 ratify the commencement of a civil action, the association shall provide a
29-15 written statement to all units’ owners that includes:
29-16 (a) A reasonable estimate of the costs of the civil action, including
29-17 reasonable attorney’s fees;
29-18 (b) An explanation of the potential benefits of the civil action and the
29-19 potential adverse consequences if the association does not commence the
29-20 action or if the outcome of the action is not favorable to the association;
29-21 and
29-22 (c) All disclosures that are required to be made upon the sale of the
29-23 property.
29-24 11. No person other than a unit’s owner may request the dismissal of a
29-25 civil action commenced by the association on the ground that the
29-26 association failed to comply with any provision of this section.]
29-27 Sec. 65. NRS 116.31152 is hereby amended to read as follows:
29-28 116.31152 1. The executive board of an association shall:
29-29 (a) Cause to be conducted at least once every 5 years, a study of the
29-30 reserves required to repair, replace and restore the major components of the
29-31 common elements;
29-32 (b) Review the results of that study at least annually to determine if
29-33 those reserves are sufficient; and
29-34 (c) Make any adjustments it deems necessary to maintain the required
29-35 reserves.
29-36 2. The study required by subsection 1 must be conducted by a person
29-37 qualified by training and experience to conduct such a study, including a
29-38 member of the executive board, a unit’s owner or the [property]
29-39 community manager of the association who is so qualified. The study must
29-40 include, without limitation:
29-41 (a) A summary of an inspection of the major components of the
29-42 common elements the association is obligated to repair, replace or restore;
29-43 (b) An identification of the major components of the common elements
29-44 that the association is obligated to repair, replace or restore which have a
29-45 remaining useful life of less than 30 years;
29-46 (c) An estimate of the remaining useful life of each major component
29-47 identified pursuant to paragraph (b);
30-1 (d) An estimate of the cost of repair, replacement or restoration of each
30-2 major component identified pursuant to paragraph (b) during and at the end
30-3 of its useful life; and
30-4 (e) An estimate of the total annual assessment that may be required to
30-5 cover the cost of repairing, replacement or restoration of the major
30-6 components identified pursuant to paragraph (b), after subtracting the
30-7 reserves of the association as of the date of the study.
30-8 3. The [administrator] commission shall adopt by regulation the
30-9 qualifications required for conducting a study required by subsection 1.
30-10 Sec. 66. NRS 116.31155 is hereby amended to read as follows:
30-11 116.31155 1. An association shall:
30-12 (a) If the association is required to pay the fee imposed by NRS 78.150
30-13 or 82.193, pay to the administrator a fee established by regulation of the
30-14 [administrator] commission for every unit in the association used for
30-15 residential use.
30-16 (b) If the association is organized as a trust or partnership, pay to the
30-17 administrator a fee established by regulation of the [administrator]
30-18 commission for each unit in the association.
30-19 2. The fees required to be paid pursuant to this section must be:
30-20 (a) Paid at such times as are established by the [administrator.] division.
30-21 (b) Deposited with the state treasurer for credit to the account for [the
30-22 ombudsman for owners in] common-interest communities created pursuant
30-23 to NRS 116.1117.
30-24 (c) Established on the basis of the actual cost of administering the
30-25 provisions of sections 11 to 27, inclusive, of this act, the commission and
30-26 the office of the ombudsman for owners in common-interest communities
30-27 and not on a basis which includes any subsidy for [the office.] those
30-28 purposes. In no event may the fees required to be paid pursuant to this
30-29 section exceed $3 per unit.
30-30 3. A unit’s owner may not be required to pay any portion of the fees
30-31 required to be paid pursuant to this section to a master association and to an
30-32 association organized pursuant to NRS 116.3101.
30-33 4. Upon the payment of the fees required by this section, the
30-34 administrator shall provide to the association evidence that it paid the fees
30-35 in compliance with this section.
30-36 Sec. 67. NRS 116.31158 is hereby amended to read as follows:
30-37 116.31158 1. Each association shall, at the time it pays the fee
30-38 required by NRS 116.31155, register with the ombudsman for owners in
30-39 common-interest communities on a form prescribed by the ombudsman.
30-40 2. The form for registration must include, without limitation, the
30-41 information required to be maintained pursuant to paragraph [(d)] (e) of
30-42 subsection 4 of NRS 116.1116.
30-43 Sec. 68. NRS 116.31162 is hereby amended to read as follows:
30-44 116.31162 1. Except as otherwise provided in subsection 4, in a
30-45 condominium, a cooperative where the owner’s interest in a unit is real
30-46 estate as determined pursuant to NRS 116.1105, or a planned community,
30-47 the association may foreclose its lien by sale after:
30-48 (a) The association has mailed by certified or registered mail, return
30-49 receipt requested, to the unit’s owner or his successor in interest, at his
31-1 address if known, and at the address of the unit, a notice of delinquent
31-2 assessment which states the amount of the assessments and other sums
31-3 which are due in accordance with subsection 1 of NRS 116.3116, a
31-4 description of the unit against which the lien is imposed, and the name of
31-5 the record owner of the unit;
31-6 (b) The association has provided written certification to the
31-7 ombudsman for owners in common-interest communities that notices
31-8 have been given in accordance with NRS 116.31162;
31-9 (c) Not less than 30 days after mailing the notice of delinquent
31-10 assessment pursuant to paragraph (a), the association or other person
31-11 conducting the sale has executed and caused to be recorded, with the
31-12 county recorder of the county in which the common-interest community or
31-13 any part of it is situated, a notice of default and election to sell the unit to
31-14 satisfy the lien, which contains the same information as the notice of
31-15 delinquent assessment, but must also describe the deficiency in payment
31-16 and the name and address of the person authorized by the association to
31-17 enforce the lien by sale; and
31-18 [(c)] (d) The unit’s owner or his successor in interest has failed to pay
31-19 the amount of the lien, including costs, fees and expenses incident to its
31-20 enforcement, for [60] 90 days following the recording of the notice of
31-21 default and election to sell.
31-22 2. The notice of default and election to sell must be signed by the
31-23 person designated in the declaration or by the association for that purpose,
31-24 or if no one is designated, by the president of the association.
31-25 3. The period of [60] 90 days begins on the first day following the
31-26 later of:
31-27 (a) The day on which the notice of default is recorded; or
31-28 (b) The day on which a copy of the notice of default is mailed by
31-29 certified or registered mail, return receipt requested, to the unit’s owner or
31-30 his successor in interest at his address if known, and at the address of the
31-31 unit.
31-32 4. The association may not foreclose a lien by sale for the assessment
31-33 of a fine for a violation of the declaration, bylaws, rules or regulations of
31-34 the association, unless the violation is of a type that threatens the health,
31-35 safety or welfare of the residents of the common-interest community.
31-36 Sec. 69. NRS 116.31175 is hereby amended to read as follows:
31-37 116.31175 1. Except as otherwise provided in this subsection, the
31-38 executive board of an association shall, upon the written request of a unit’s
31-39 owner, make available the books, records and other papers of the
31-40 association for review during the regular working hours of the association
31-41 [.] , including, without limitation, all records filed with a court relating to
31-42 a civil or criminal action to which the association is a party. The
31-43 provisions of this subsection do not apply to:
31-44 (a) The personnel records of the employees of the association [;] ,
31-45 except for those records relating to the salaries and benefits of those
31-46 employees; and
31-47 (b) The records of the association relating to another unit’s owner.
32-1 2. If the executive board refuses to allow a unit’s owner to review the
32-2 books, records or other papers of the association, the ombudsman for
32-3 owners in common-interest communities may:
32-4 (a) On behalf of the unit’s owner and upon written request, review the
32-5 books, records or other papers of the association during the regular
32-6 working hours of the association; and
32-7 (b) If he is denied access to the books, records or other papers, request
32-8 the commission to issue a subpoena for their production.
32-9 3. The books, records and other papers of an association must be
32-10 maintained for at least 10 years.
32-11 Sec. 70. NRS 116.41095 is hereby amended to read as follows:
32-12 116.41095 The information statement required by NRS 116.4103 and
32-13 116.4109 must be in substantially the following form:
32-14 BEFORE YOU PURCHASE PROPERTY IN A
32-15 COMMON-INTEREST COMMUNITY
32-16 DID YOU KNOW . . .
32-17 1. YOU ARE AGREEING TO RESTRICTIONS ON HOW YOU
32-18 CAN USE YOUR PROPERTY?
32-19 These restrictions are contained in a document known as the Declaration of
32-20 Covenants, Conditions and Restrictions (C, C & R’s) that should be
32-21 provided for your review before making your purchase. The C, C & R’s
32-22 become a part of the title to your property. They bind you and every future
32-23 owner of the property whether or not you have read them or had them
32-24 explained to you. The C, C & R’s, together with other “governing
32-25 documents” (such as association bylaws and rules and regulations), are
32-26 intended to preserve the character and value of properties in the
32-27 community, but may also restrict what you can do to improve or change
32-28 your property and limit how you use and enjoy your property. By
32-29 purchasing a property encumbered by C, C & R’s, you are agreeing to
32-30 limitations that could affect your lifestyle and freedom of choice. You
32-31 should review the C, C & R’s and other governing documents before
32-32 purchasing to make sure that these limitations and controls are acceptable
32-33 to you.
32-34 2. YOU WILL HAVE TO PAY OWNERS’ ASSESSMENTS FOR AS
32-35 LONG AS YOU OWN YOUR PROPERTY?
32-36 As an owner in a common-interest community, you are responsible for
32-37 paying your share of expenses relating to the common elements, such as
32-38 landscaping, shared amenities and the operation of any homeowner’s
32-39 association. The obligation to pay these assessments binds you and every
32-40 future owner of the property. Owners’ fees are usually assessed by the
32-41 homeowner’s association and due monthly. You have to pay dues whether
32-42 or not you agree with the way the association is managing the property or
32-43 spending the assessments. The executive board of the association may have
32-44 the power to change and increase the amount of the assessment and to levy
32-45 special assessments against your property to meet extraordinary expenses.
32-46 In some communities, major components of the community such as roofs
32-47 and private roads must be maintained and replaced by the association. If
32-48 the association is not well managed or fails to maintain adequate reserves
33-1 to repair, replace and restore common elements, you may be required to
33-2 pay large, special assessments to accomplish these tasks.
33-3 3. IF YOU FAIL TO PAY OWNERS’ ASSESSMENTS, YOU
33-4 COULD LOSE YOUR HOME?
33-5 If you do not pay these assessments when due, the association usually has
33-6 the power to collect them by selling your property in a nonjudicial
33-7 foreclosure sale. If fees become delinquent, you may also be required to
33-8 pay penalties and the association’s costs and attorney’s fees to become
33-9 current. If you dispute the obligation or its amount, your only remedy to
33-10 avoid the loss of your home may be to file a lawsuit and ask a court to
33-11 intervene in the dispute.
33-12 4. YOU MAY BECOME A MEMBER OF A HOMEOWNER’S
33-13 ASSOCIATION THAT HAS THE POWER TO AFFECT HOW YOU
33-14 USE AND ENJOY YOUR PROPERTY?
33-15 Many common-interest communities have a homeowner’s association. In a
33-16 new development, the association will usually be controlled by the
33-17 developer until a certain number of units have been sold. After the period
33-18 of developer control, the association may be controlled by property owners
33-19 like yourself who are elected by homeowners to sit on an executive board
33-20 and other boards and committees formed by the association. The
33-21 association, and its executive board, are responsible for assessing
33-22 homeowners for the cost of operating the association and the common or
33-23 shared elements of the community and for the day to day operation and
33-24 management of the community. Because homeowners sitting on the
33-25 executive board and other boards and committees of the association may
33-26 not have the experience or professional background required to understand
33-27 and carry out the responsibilities of the association properly, the
33-28 association may hire professional managers to carry out these
33-29 responsibilities.
33-30 Homeowner’s associations operate on democratic principles. Some
33-31 decisions require all homeowners to vote, some decisions are made by the
33-32 executive board or other boards or committees established by the
33-33 association or governing documents. Although the actions of the
33-34 association and its executive board are governed by state laws, the C, C &
33-35 R’s and other documents that govern the common-interest community,
33-36 decisions made by these persons will affect your use and enjoyment of
33-37 your property, your lifestyle and freedom of choice, and your cost of living
33-38 in the community. You may not agree with decisions made by the
33-39 association or its governing bodies even though the decisions are ones
33-40 which the association is authorized to make. Decisions may be made by a
33-41 few persons on the executive board or governing bodies that do not
33-42 necessarily reflect the view of the majority of homeowners in the
33-43 community. If you do not agree with decisions made by the association, its
33-44 executive board or other governing bodies, your remedy is typically to
33-45 attempt to use the democratic processes of the association to seek the
33-46 election of members of the executive board or other governing bodies that
33-47 are more responsive to your needs. If persons controlling the association or
33-48 its management are not complying with state laws or the governing
33-49 documents, your remedy is typically to seek to mediate or arbitrate the
34-1 dispute and, if mediation or arbitration is unsuccessful, file a lawsuit and
34-2 ask a court to resolve the dispute. In addition to your personal cost in
34-3 mediation or arbitration, or to prosecute a lawsuit, you may be responsible
34-4 for paying your share of the association’s cost in defending against your
34-5 claim. There is no government agency in this state that investigates or
34-6 intervenes to resolve disputes in homeowner’s associations.
34-7 5. YOU ARE REQUIRED TO PROVIDE PROSPECTIVE BUYERS
34-8 OF YOUR PROPERTY WITH INFORMATION ABOUT LIVING IN
34-9 YOUR COMMON-INTEREST COMMUNITY?
34-10 The law requires you to provide to a prospective purchaser of your
34-11 property, before you enter into a purchase agreement, a copy of the
34-12 community’s governing documents, including the C, C & R’s, association
34-13 bylaws, and rules and regulations, as well as a copy of this document. You
34-14 are also required to provide a copy of the association’s current financial
34-15 statement, operating budget and information regarding the amount of the
34-16 monthly assessment for common expenses, including the amount set aside
34-17 as reserves for the repair, replacement and restoration of common
34-18 elements. You are also required to inform prospective purchasers of any
34-19 outstanding judgments or lawsuits pending against the association of which
34-20 you are aware. You are also required to provide a copy of the minutes from
34-21 the most recent meeting of the homeowner’s association or its executive
34-22 board. For more information regarding these requirements, see Nevada
34-23 Revised Statutes 116.4103.
34-24 6. YOU HAVE CERTAIN RIGHTS REGARDING OWNERSHIP IN
34-25 A COMMON-INTEREST COMMUNITY THAT ARE GUARANTEED
34-26 YOU BY THE STATE?
34-27 Pursuant to provisions of chapter 116 of Nevada Revised Statutes, you
34-28 have the right:
34-29 (a) To be notified of all meetings of the association and its executive
34-30 board, except in cases of emergency.
34-31 (b) To attend and speak at all meetings of the association and its
34-32 executive board, except in some cases where the executive board is
34-33 authorized to meet in closed, executive session.
34-34 (c) To request a special meeting of the association upon petition of at
34-35 least 10 percent of the homeowners.
34-36 (d) To inspect, examine, photocopy and audit financial and other
34-37 records of the association.
34-38 (e) To be notified of all changes in the community’s rules and
34-39 regulations and other actions by the association or board that affect you.
34-40 7. QUESTIONS?
34-41 Although they may be voluminous, you should take the time to read and
34-42 understand the documents that will control your ownership of a property in
34-43 a common-interest community. You may wish to ask your real estate
34-44 professional, lawyer or other person with experience to explain anything
34-45 you do not understand. You may also request assistance from the
34-46 ombudsman for owners in common-interest communities, Nevada Real
34-47 Estate Division, at (telephone number) [.] , or the commission for
34-48 common-interest communities, at (telephone number).
35-1 Buyer or prospective buyer’s initials:_____
35-2 Date:_____
35-3 Sec. 71. NRS 38.330 is hereby amended to read as follows:
35-4 38.330 1. If all parties named in a written claim filed pursuant to
35-5 NRS 38.320 agree to have the claim submitted for mediation, the parties
35-6 shall reduce the agreement to writing and shall select a mediator from the
35-7 list of mediators maintained by the division pursuant to NRS 38.340. Any
35-8 mediator selected must be available within the geographic area. If the
35-9 parties fail to agree upon a mediator, the division shall appoint a mediator
35-10 from the list of mediators maintained by the division. Any mediator
35-11 appointed must be available within the geographic area. Unless otherwise
35-12 provided by an agreement of the parties, mediation must be completed
35-13 within 60 days after the parties agree to mediation. Any agreement
35-14 obtained through mediation conducted pursuant to this section must, within
35-15 20 days after the conclusion of mediation, be reduced to writing by the
35-16 mediator and a copy thereof provided to each party. The agreement may be
35-17 enforced as any other written agreement. Except as otherwise provided in
35-18 this section, the parties are responsible for all costs of mediation conducted
35-19 pursuant to this section.
35-20 2. If all the parties named in the claim do not agree to mediation, the
35-21 parties shall select an arbitrator from the list of arbitrators maintained by
35-22 the division pursuant to NRS 38.340. Any arbitrator selected must be
35-23 available within the geographic area. If the parties fail to agree upon an
35-24 arbitrator, the division shall appoint an arbitrator from the list maintained
35-25 by the division. Any arbitrator appointed must be available within the
35-26 geographic area. Upon appointing an arbitrator, the division shall provide
35-27 the name of the arbitrator to each party.
35-28 3. The division may provide for the payment of the fees for a mediator
35-29 or an arbitrator selected or appointed pursuant to this section from the
35-30 account for [the ombudsman for owners in] common-interest communities
35-31 created pursuant to NRS 116.1117, to the extent that money is available in
35-32 the account for this purpose.
35-33 4. Except as otherwise provided in this section and except where
35-34 inconsistent with the provisions of NRS 38.300 to 38.360, inclusive, the
35-35 arbitration of a claim pursuant to this section must be conducted in
35-36 accordance with the provisions of NRS 38.075 to [38.105,] 38.135,
35-37 inclusive, [38.115, 38.125, 38.135,] 38.155 and 38.165. At any time during
35-38 the arbitration of a claim relating to the interpretation, application or
35-39 enforcement of any covenants, conditions or restrictions applicable to
35-40 residential property or any bylaws, rules or regulations adopted by an
35-41 association, the arbitrator may issue an order prohibiting the action upon
35-42 which the claim is based. An award must be made within 30 days after the
35-43 conclusion of arbitration, unless a shorter period is agreed upon by the
35-44 parties to the arbitration.
35-45 5. If all the parties have agreed to nonbinding arbitration, any party to
35-46 the arbitration may, within 30 days after a decision and award have been
35-47 served upon the parties, commence a civil action in the proper court
35-48 concerning the claim which was submitted for arbitration. Any complaint
35-49 filed in such an action must contain a sworn statement indicating that the
36-1 issues addressed in the complaint have been arbitrated pursuant to the
36-2 provisions of NRS 38.300 to 38.360, inclusive. If such an action is not
36-3 commenced within that period, any party to the arbitration may, within 1
36-4 year after the service of the award, apply to the proper court for a
36-5 confirmation of the award pursuant to NRS 38.135.
36-6 6. If all the parties agree in writing to binding arbitration, the
36-7 arbitration must be conducted in accordance with the provisions of [chapter
36-8 38 of NRS.] this chapter. An award procured pursuant to such arbitration
36-9 may be vacated and a rehearing granted upon application of a party
36-10 pursuant to the provisions of NRS 38.145.
36-11 7. If, after the conclusion of arbitration, a party:
36-12 (a) Applies to have an award vacated and a rehearing granted pursuant
36-13 to NRS 38.145; or
36-14 (b) Commences a civil action based upon any claim which was the
36-15 subject of arbitration,
36-16 the party shall, if he fails to obtain a more favorable award or judgment
36-17 than that which was obtained in the initial arbitration, pay all costs and
36-18 reasonable attorney’s fees incurred by the opposing party after the
36-19 application for a rehearing was made or after the complaint in the civil
36-20 action was filed.
36-21 8. Upon request by a party, the division shall provide a statement to
36-22 the party indicating the amount of the fees for a mediator or an arbitrator
36-23 selected or appointed pursuant to this section.
36-24 9. As used in this section, “geographic area” means an area within 150
36-25 miles from any residential property or association which is the subject of a
36-26 written claim submitted pursuant to NRS 38.320.
36-27 Sec. 72. Notwithstanding the provisions of sections 28 and 63 of this
36-28 act, a person who engages in business as a community managing agent or a
36-29 community manager is not required to be licensed or certified pursuant to
36-30 the provisions of this act before January 1, 2002.
36-31 Sec. 73. As soon as practicable after October 1, 2001, the governor
36-32 shall appoint to the commission for common-interest communities:
36-33 1. One member whose term expires on October 1, 2002.
36-34 2. Two members whose terms expire on October 1, 2003.
36-35 3. Two members whose terms expire on October 1, 2004.
36-36 Sec. 74. The state treasurer shall transfer any balance remaining
36-37 unexpended on October 1, 2001, in the account for the ombudsman for
36-38 owners in common-interest communities in the state general fund to the
36-39 account for common-interest communities which is created pursuant to
36-40 NRS 116.1117, as amended by this act.
36-41 Sec. 75. On or before November 1, 2002, the commission for
36-42 common-interest communities created pursuant to section 11 of this act
36-43 shall submit a report containing the information it is required to obtain
36-44 pursuant to subsections 2 and 3 of section 14 of this act, and any
36-45 recommended legislation, to the director of the legislative counsel bureau
36-46 for transmittal to the 72nd session of the Nevada legislature.
36-47 Sec. 76. 1. This section and section 26 of this act become effective
36-48 upon passage and approval.
37-1 2. Sections 1 to 25, inclusive, and 27 to 75, inclusive, of this act
37-2 become effective on October 1, 2001.
37-3 3. Sections 29, 30 and 31 of this act expire by limitation on the date on
37-4 which the provisions of 42 U.S.C. § 666 requiring each state to establish
37-5 procedures under which the state has authority to withhold or suspend, or
37-6 to restrict the use of professional, occupational and recreational licenses of
37-7 persons who:
37-8 (a) Have failed to comply with a subpoena or warrant relating to a
37-9 proceeding to determine the paternity of a child or to establish or enforce
37-10 an obligation for the support of a child; or
37-11 (b) Are in arrears in the payment for the support of one or more
37-12 children,
37-13 are repealed by the Congress of the United States.
37-14 H