REQUIRES TWO-THIRDS MAJORITY VOTE § (44) EXEMPT
(REPRINTED WITH ADOPTED AMENDMENTS)
SECOND 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.
~
EXPLANATION
– Matter in bolded italics is new; matter
between brackets [omitted material] is material to be omitted.
Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
1-1 Section 1. Chapter 116 of NRS is hereby amended by adding thereto
1-2 the provisions set forth as sections 2 to 20, 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. “Community manager” means a person who holds a
1-7 certificate or permit and provides for the management of a common-
1-8 interest community.
1-9 Sec. 4. “Division” means the real estate division of the department
1-10 of business and industry.
1-11 Sec. 5. “Management of a common-interest community” means the
1-12 physical, administrative or financial maintenance and management of a
1-13 common-interest community, or the supervision of those activities, for a
1-14 fee, commission or other valuable consideration.
1-15 Sec. 6. “Permit” means a permit to engage in property management
1-16 issued pursuant to the provisions of chapter 645 of NRS.
2-1 Sec. 7. If a matter governed by this chapter is also governed by
2-2 chapter 82 of NRS and there is a conflict between the provisions of this
2-3 chapter and the provisions of chapter 82 of NRS, the provisions of this
2-4 chapter prevail.
2-5 Sec. 8. In conducting any meetings, a rural agricultural residential
2-6 common-interest community must comply with the provisions set forth in
2-7 chapter 241 of NRS concerning open meetings which are generally
2-8 applicable to public bodies.
2-9 Sec. 9. An application for a certificate to act as a community
2-10 manager must:
2-11 1. Include the social security number of the applicant; and
2-12 2. Be accompanied by the statement required pursuant to section 10
2-13 of this act.
2-14 Sec. 10. 1. An applicant for a certificate to act as a community
2-15 manager must submit to the division the statement prescribed by the
2-16 welfare division of the department of human resources pursuant to NRS
2-17 425.520. The statement must be completed and signed by the applicant.
2-18 2. The division shall include the statement required pursuant to
2-19 subsection 1 in:
2-20 (a) The application or any other forms that must be submitted for the
2-21 issuance of the certificate; or
2-22 (b) A separate form prescribed by the division.
2-23 3. A certificate may not be issued if the applicant:
2-24 (a) Fails to submit the statement required pursuant to subsection 1; or
2-25 (b) Indicates on the statement submitted pursuant to subsection 1 that
2-26 he is subject to a court order for the support of a child and is not in
2-27 compliance with the order or a plan approved by the district attorney or
2-28 other public agency enforcing the order for the repayment of the amount
2-29 owed pursuant to the order.
2-30 4. If an applicant indicates on the statement submitted pursuant to
2-31 subsection 1 that he is subject to a court order for the support of a child
2-32 and is not in compliance with the order or a plan approved by the district
2-33 attorney or other public agency enforcing the order for the repayment of
2-34 the amount owed pursuant to the order, the division shall advise the
2-35 applicant to contact the district attorney or other public agency enforcing
2-36 the order to determine the actions that the applicant may take to satisfy
2-37 the arrearage.
2-38 Sec. 11. 1. If the division receives a copy of a court order issued
2-39 pursuant to NRS 425.540 that provides for the suspension of all
2-40 professional, occupational and recreational licenses, certificates and
2-41 permits issued to the holder of a certificate to act as a community
2-42 manager, the division shall deem the certificate to be suspended at the
2-43 end of the 30th day after the date the court order was issued unless the
2-44 division receives a letter issued to the holder of the certificate by the
2-45 district attorney or other public agency pursuant to NRS 425.550 stating
2-46 that the holder of the certificate has complied with a subpoena or
2-47 warrant or has satisfied the arrearage pursuant to NRS 425.560.
2-48 2. The division shall reinstate a certificate that has been suspended
2-49 by a district court pursuant to NRS 425.540 if the division receives a
3-1 letter issued by the district attorney or other public agency pursuant to
3-2 NRS 425.550 to the holder of the certificate that he has complied with the
3-3 subpoena or warrant or has satisfied the arrearage pursuant to NRS
3-4 425.560.
3-5 Sec. 12. 1. If the executive board of an association receives a
3-6 written complaint from a unit’s owner alleging that the board has
3-7 violated any provision of this chapter or any provision of the governing
3-8 documents of the association, the executive board shall, if action is
3-9 required by the board, place the subject of the complaint on the agenda
3-10 of the next regularly scheduled meeting of the executive board.
3-11 2. The executive board, or an authorized representative of the
3-12 association, shall, within 10 days after receiving such a complaint,
3-13 acknowledge the receipt of the complaint and notify the unit’s owner
3-14 that, if action is required by the board, the subject of the complaint will
3-15 be placed on the agenda of the next regularly scheduled meeting of the
3-16 executive board.
3-17 Sec. 13. An officer or member of the executive board of an
3-18 association or a person engaged in the management of a common-
3-19 interest community shall not solicit or accept any form of compensation,
3-20 gratuity or other remuneration that would improperly influence or would
3-21 appear to a reasonable person to influence improperly the decisions
3-22 made by those persons, or would result or would appear to a reasonable
3-23 person to result in a conflict of interest.
3-24 Sec. 14. A member of an executive board of an association shall not
3-25 take any retaliatory action against a unit’s owner because the unit’s
3-26 owner has:
3-27 1. Complained in good faith about any alleged violation of this
3-28 chapter or the governing documents of the association; or
3-29 2. Requested in good faith to review the books, records and papers of
3-30 the association.
3-31 Sec. 15. 1. An officer or a member of the executive board of an
3-32 association shall not:
3-33 (a) On or after October 1, 2001, enter into a contract or renew a
3-34 contract with the association to provide goods or services to the
3-35 association; or
3-36 (b) Otherwise accept any commission, personal profit or
3-37 compensation of any kind from the association for providing goods or
3-38 services to the association.
3-39 2. Except as otherwise provided in NRS 116.3105, the provisions of
3-40 this section do not prohibit:
3-41 (a) The payment of a salary or other income to an officer or a member
3-42 of an executive board of an association for acting in his official capacity.
3-43 (b) A declarant from entering into a contract with an association or
3-44 the payment of any consideration to the declarant for any goods or
3-45 services furnished by the declarant to the association.
3-46 (c) The declarant from serving as an officer or a member of the
3-47 executive board of the association.
3-48 3. As used in this section, “declarant” includes any agent, employee
3-49 or affiliate of a declarant.
4-1 Sec. 16. 1. Notwithstanding any other provision of this chapter, in
4-2 a common-interest community that has at least 2,000 units, some or all of
4-3 the authority of the members of a master association may be exercised by
4-4 delegates, including, without limitation, the voting rights of the members
4-5 of the master association, if the declaration so provides.
4-6 2. For the purpose of determining whether a common-interest
4-7 community has at least 2,000 units, units that a declarant has reserved
4-8 the right to create pursuant to NRS 116.2105 and for which
4-9 developmental rights exist must be included.
4-10 Sec. 17. 1. If a common-interest community is developed in
4-11 separate phases and the declarant, including a successor declarant who
4-12 does not control the association established by the initial declarant, is
4-13 constructing any common elements that will be added to the association’s
4-14 common elements, the declarant is responsible for:
4-15 (a) Paying all expenses related to the common elements which are
4-16 incurred before the conveyance of the common elements to the
4-17 association; and
4-18 (b) Except as otherwise provided in NRS 116.31038, delivering to the
4-19 association the declarant’s share of the amount specified in the study of
4-20 reserves completed pursuant to subsection 2.
4-21 2. Before conveying the common elements to the association, the
4-22 declarant shall deliver to the association a study of the reserves for the
4-23 additional common elements which satisfies the requirements of NRS
4-24 116.31152.
4-25 Sec. 18. 1. Except as otherwise provided in subsection 2, in a
4-26 county whose population is 400,000 or more, a person who owns or,
4-27 directly or indirectly, has an interest in, one or more units within a
4-28 planned community that are restricted to residential use by the
4-29 declaration, may use that unit or one of those units for a transient
4-30 commercial use only if:
4-31 (a) The governing documents of the association and any master
4-32 association do not prohibit such use; and
4-33 (b) Persons entitled to cast at least a majority of the votes in the
4-34 association and any master association approve the transient commercial
4-35 use of the unit.
4-36 2. A declarant who owns or, directly or indirectly, has an interest in,
4-37 one or more units within a planned community under the governing
4-38 documents of the association that are restricted to residential use by the
4-39 declaration, may not use that unit or one of those units for a transient
4-40 commercial use.
4-41 3. The association and any master association may establish
4-42 requirements for such use pursuant to subsection 1, including the
4-43 payment of additional fees that are related to any increase in services or
4-44 other costs associated with the transient commercial use of the unit.
4-45 4. As used in this section:
4-46 (a) “Remuneration” means any compensation, money, rent or other
4-47 valuable consideration given in return for the occupancy, possession or
4-48 use of a unit.
5-1 (b) “Transient commercial use” means the use of a unit, for
5-2 remuneration, as a hostel, hotel, inn, motel, resort, vacation rental or
5-3 other form of transient lodging if the term of the occupancy, possession
5-4 or use of the unit is for less than 30 consecutive calendar days.
5-5 Sec. 19. The executive board of a master association of any
5-6 common-interest community that was created before January 1, 1975,
5-7 and is located in a county whose population is 400,000 or more may
5-8 record an amendment to the declaration pursuant to which the master
5-9 association reallocates the costs of administering the common elements
5-10 of the master association among the units of the common-interest
5-11 community uniformly and based upon the actual costs associated with
5-12 each unit.
5-13 Sec. 20. Notwithstanding any other provision of this chapter, if a
5-14 declaration, any recorded instrument related to a common-interest
5-15 community or any contract to which an association is a party provides
5-16 for the imposition of an assessment, fine, penalty or other charge for any
5-17 failure to adhere to a schedule for the completion of the design,
5-18 commencement of the construction or completion of the construction of
5-19 a unit or an improvement within the unit, or for the issuance of any
5-20 necessary permit for the occupancy of the unit or the use of the
5-21 improvement, the assessment, fine, penalty or other charge is enforceable
5-22 if that schedule and the maximum amount of the assessment, fine,
5-23 penalty or other charge are set forth in the declaration, recorded
5-24 instrument or contract.
5-25 Sec. 21. NRS 116.1103 is hereby amended to read as follows:
5-26 116.1103 [In] As used in the declaration and bylaws [(NRS 116.3106),
5-27 unless specifically provided otherwise or] of an association and in this
5-28 chapter, unless the context otherwise requires, [and in this chapter,] the
5-29 words and terms defined in NRS 116.110305 to 116.110393, inclusive,
5-30 and sections 2 to 6, inclusive, of this act have the meanings ascribed to
5-31 them in those sections.
5-32 Sec. 22. NRS 116.110305 is hereby amended to read as follows:
5-33 116.110305 “Administrator” means the administrator of the [real
5-34 estate division of the department of business and industry.] division.
5-35 Sec. 23. NRS 116.11145 is hereby amended to read as follows:
5-36 116.11145 1. To carry out the purposes of this chapter, the real estate
5-37 commission, or any member thereof [,] acting on behalf of the
5-38 commission, may issue subpoenas to compel the attendance of witnesses
5-39 and the production of books, records and other papers.
5-40 2. If any person fails to comply with a subpoena issued by the
5-41 commission pursuant to this section , [within 10 days after its issuance,] the
5-42 commission may petition the district court for an order of the court
5-43 compelling compliance with the subpoena.
5-44 3. Upon such a petition, the court shall enter an order directing the
5-45 person subpoenaed to appear before the court at a time and place to be
5-46 fixed by the court in its order, the time to be not more than 10 days after
5-47 the [date] service of the order, and show cause why he has not complied
5-48 with the subpoena. A certified copy must be served upon the person
5-49 subpoenaed.
6-1 4. If it appears to the court that the subpoena was regularly issued by
6-2 the commission, the court shall enter an order compelling compliance with
6-3 the subpoena, and upon failure to obey the order the person shall be dealt
6-4 with as for contempt of court.
6-5 Sec. 24. NRS 116.1116 is hereby amended to read as follows:
6-6 116.1116 1. The office of the ombudsman for owners in common-
6-7 interest communities is hereby created within the [real estate division of
6-8 the department of business and industry.] division.
6-9 2. The administrator shall appoint the ombudsman for owners in
6-10 common-interest communities. The ombudsman for owners in common-
6-11 interest communities is in the unclassified service of the state.
6-12 3. The ombudsman for owners in common-interest communities must
6-13 be qualified by training and experience to perform the duties and functions
6-14 of his office.
6-15 4. The ombudsman for owners in common-interest communities shall:
6-16 (a) Assist in processing claims submitted to mediation or arbitration
6-17 pursuant to NRS 38.300 to 38.360, inclusive;
6-18 (b) Assist owners in common-interest communities to understand their
6-19 rights and responsibilities as set forth in this chapter and the governing
6-20 documents of their associations, including, without limitation, publishing
6-21 materials related to those rights and responsibilities;
6-22 (c) Assist persons appointed or elected to serve [on] as officers or
6-23 members of executive boards of associations to carry out their duties; [and]
6-24 (d) Assist in resolving complaints filed with the office or the division
6-25 alleging a violation of the provisions of this chapter or the governing
6-26 documents of the association; and
6-27 (e) Compile and maintain a registration of each association organized
6-28 within the state which includes, without limitation:
6-29 (1) The name, address and telephone number of the association;
6-30 (2) The name of the person engaged in [property management for]
6-31 the management of the common-interest community or the name of the
6-32 person who manages the property at the site of the common-interest
6-33 community;
6-34 (3) The names, mailing addresses and telephone numbers of the
6-35 members of the executive board of the association;
6-36 (4) The name of the declarant;
6-37 (5) The number of units in the common-interest community; [and]
6-38 (6) The total annual assessment made by the association [.] ;
6-39 (7) The number of liens foreclosed on units within the common-
6-40 interest community for the failure to pay assessments levied against those
6-41 units or fines imposed against units’ owners; and
6-42 (8) Whether a study of the reserves of the association exists and, if
6-43 so, the date on which it was completed.
6-44 Sec. 25. NRS 116.1117 is hereby amended to read as follows:
6-45 116.1117 1. There is hereby created the account for [the ombudsman
6-46 for owners in] common-interest communities in the state general fund. The
6-47 account must be administered by the administrator.
6-48 2. The fees collected pursuant to NRS 116.31155 must be credited to
6-49 the account.
7-1 3. The interest and income earned on the money in the account, after
7-2 deducting any applicable charges, must be credited to the account.
7-3 4. The money in the account must be used solely to [defray] :
7-4 (a) Defray the costs and expenses of administering the office of the
7-5 ombudsman for owners in common-interest communities ; and [for the
7-6 payment of fees for a mediator or an arbitrator pursuant to NRS 38.330.]
7-7 (b) Subsidize proceedings for mediation and arbitration conducted
7-8 under NRS 38.300 to 38.360, inclusive.
7-9 Sec. 26. NRS 116.1201 is hereby amended to read as follows:
7-10 116.1201 1. Except as otherwise provided in this section and NRS
7-11 116.1203, this chapter applies to all common-interest communities created
7-12 within this state.
7-13 2. This chapter does not apply to:
7-14 (a) Associations created for the limited purpose of maintaining:
7-15 (1) The landscape of the common elements of a common-interest
7-16 community;
7-17 (2) Facilities for flood control; or
7-18 (3) A rural agricultural residential common-interest community.
7-19 (b) A planned community in which all units are restricted exclusively to
7-20 nonresidential use unless the declaration provides that the chapter does
7-21 apply to that planned community. This chapter applies to a planned
7-22 community containing both units that are restricted exclusively to
7-23 nonresidential use and other units that are not so restricted, only if the
7-24 declaration so provides or the real estate comprising the units that may be
7-25 used for residential purposes would be a planned community in the absence
7-26 of the units that may not be used for residential purposes.
7-27 (c) Common-interest communities or units located outside of this state,
7-28 but the provisions of NRS 116.4102 to 116.4108, inclusive, apply to all
7-29 contracts for the disposition thereof signed in this state by any party unless
7-30 exempt under subsection 2 of NRS 116.4101.
7-31 (d) A common-interest community that was created before January 1,
7-32 1992, is located in a county whose population is less than 50,000, and
7-33 has less than 50 percent of the units within the community put to
7-34 residential use, unless a majority of the units’ owners otherwise elect in
7-35 writing.
7-36 3. The provisions of this chapter do not:
7-37 (a) Prohibit a common-interest community created before January 1,
7-38 1992, from providing for separate classes of voting for the units’ owners of
7-39 the association;
7-40 (b) Require a common-interest community created before January 1,
7-41 1992, to comply with the provisions of NRS 116.2101 to 116.2122,
7-42 inclusive;
7-43 (c) Invalidate any assessments that were imposed on or before
7-44 October 1, 1999, by a common-interest community created before
7-45 January 1, 1992; or
7-46 (d) Prohibit a common-interest community created before [January 1,
7-47 1992,] October 1, 1999, from providing for a representative form of
7-48 government.
8-1 4. The provisions of chapters 117 and 278A of NRS do not apply to
8-2 common-interest communities.
8-3 5. For the purposes of this section, the administrator shall establish, by
8-4 regulation, the criteria for determining whether an association is created for
8-5 the limited purpose of maintaining the landscape of the common elements
8-6 of a common-interest community, maintaining facilities for flood control or
8-7 maintaining a rural agricultural residential common-interest community.
8-8 Sec. 27. NRS 116.1206 is hereby amended to read as follows:
8-9 116.1206 1. Any provision contained in a declaration, bylaw or
8-10 other governing document of a common-interest community [created
8-11 before January 1, 1992,] in effect on October 1, 2001, that does not
8-12 conform to the provisions of this chapter [shall] :
8-13 (a) Shall be deemed to conform with those provisions by operation of
8-14 law [, and any such declaration, bylaw or other governing document is not
8-15 required to be amended to conform to those provisions.] ; and
8-16 (b) May be changed to conform to those provisions and may be so
8-17 changed by a vote of the executive board of the association without
8-18 compliance with the procedural requirements generally applicable to the
8-19 adoption of an amendment to the declaration, bylaws or other governing
8-20 document.
8-21 2. In the case of amendments to the declaration, bylaws or plats and
8-22 plans of any common-interest community created before January 1, 1992:
8-23 (a) If the result accomplished by the amendment was permitted by law
8-24 before January 1, 1992, the amendment may be made either in accordance
8-25 with that law, in which case that law applies to that amendment, or it may
8-26 be made under this chapter; and
8-27 (b) If the result accomplished by the amendment is permitted by this
8-28 chapter, and was not permitted by law before January 1, 1992, the
8-29 amendment may be made under this chapter.
8-30 3. An amendment to the declaration, bylaws or plats and plans
8-31 authorized by this section to be made under this chapter must be adopted in
8-32 conformity with the applicable provisions of chapter 117 or 278A of NRS
8-33 and with the procedures and requirements specified by those instruments.
8-34 If an amendment grants to any person any rights, powers or privileges
8-35 permitted by this chapter, all correlative obligations, liabilities and
8-36 restrictions in this chapter also apply to that person.
8-37 Sec. 28. NRS 116.2103 is hereby amended to read as follows:
8-38 116.2103 1. [All provisions of the declaration and bylaws are
8-39 severable.] The inclusion in a governing document of an association of a
8-40 provision that violates any provision of this chapter does not render any
8-41 other provision of the governing document invalid or otherwise
8-42 unenforceable if such other provisions can be given effect in accordance
8-43 with their original intent and the provisions of this chapter.
8-44 2. The rule against perpetuities and NRS 111.103 to 111.1039,
8-45 inclusive, do not apply to defeat any provision of the declaration, bylaws,
8-46 rules or regulations adopted pursuant to NRS 116.3102.
8-47 3. In the event of a conflict between the provisions of the declaration
8-48 and the bylaws, the declaration prevails except to the extent the declaration
8-49 is inconsistent with this chapter.
9-1 4. Title to a unit and common elements is not rendered unmarketable
9-2 or otherwise affected by reason of an insubstantial failure of the declaration
9-3 to comply with this chapter. Whether a substantial failure impairs
9-4 marketability is not affected by this chapter.
9-5 Sec. 29. NRS 116.2105 is hereby amended to read as follows:
9-6 116.2105 1. The declaration must contain:
9-7 (a) The names of the common-interest community and the association
9-8 and a statement that the common-interest community is either a
9-9 condominium, cooperative or planned community;
9-10 (b) The name of every county in which any part of the common-interest
9-11 community is situated;
9-12 (c) A sufficient description of the real estate included in the common-
9-13 interest community;
9-14 (d) A statement of the maximum number of units that the declarant
9-15 reserves the right to create;
9-16 (e) In a condominium or planned community, a description of the
9-17 boundaries of each unit created by the declaration, including the unit’s
9-18 identifying number or, in a cooperative, a description, which may be by
9-19 plats or plans, of each unit created by the declaration, including the unit’s
9-20 identifying number, its size or number of rooms, and its location within a
9-21 building if it is within a building containing more than one unit;
9-22 (f) A description of any limited common elements, other than those
9-23 specified in subsections 2 and 4 of NRS 116.2102, as provided in
9-24 paragraph (g) of subsection 2 of NRS 116.2109 and, in a planned
9-25 community, any real estate that is or must become common elements;
9-26 (g) A description of any real estate, except real estate subject to
9-27 developmental rights, that may be allocated subsequently as limited
9-28 common elements, other than limited common elements specified in
9-29 subsections 2 and 4 of NRS 116.2102, together with a statement that they
9-30 may be so allocated;
9-31 (h) A description of any developmental rights [(NRS 116.11034)] and
9-32 other special declarant’s rights [(NRS 116.110385)] reserved by the
9-33 declarant, together with a legally sufficient description of the real estate to
9-34 which each of those rights applies, and a time within which each of those
9-35 rights must be exercised;
9-36 (i) If any developmental right may be exercised with respect to different
9-37 parcels of real estate at different times, a statement to that effect together
9-38 with:
9-39 (1) Either a statement fixing the boundaries of those portions and
9-40 regulating the order in which those portions may be subjected to the
9-41 exercise of each developmental right or a statement that no assurances are
9-42 made in those regards; and
9-43 (2) A statement whether, if any developmental right is exercised in
9-44 any portion of the real estate subject to that developmental right, that
9-45 developmental right must be exercised in all or in any other portion of the
9-46 remainder of that real estate;
9-47 (j) Any other conditions or limitations under which the rights described
9-48 in paragraph (h) may be exercised or will lapse;
10-1 (k) An allocation to each unit of the allocated interests in the manner
10-2 described in NRS 116.2107 [;] and a statement of whether voting by
10-3 delegates is required or permitted pursuant to section 16 of this act;
10-4 (l) Any restrictions:
10-5 (1) On use, occupancy and alienation of the units; and
10-6 (2) On the amount for which a unit may be sold or on the amount that
10-7 may be received by a unit’s owner on sale, condemnation or casualty to the
10-8 unit or to the common-interest community, or on termination of the
10-9 common-interest community;
10-10 (m) The file number and book or other information to show where
10-11 easements and licenses are recorded appurtenant to or included in the
10-12 common-interest community or to which any portion of the common-
10-13 interest community is or may become subject by virtue of a reservation in
10-14 the declaration; and
10-15 (n) All matters required by NRS 116.2106 to 116.2109, inclusive,
10-16 116.2115 , [and] 116.2116 and 116.31032.
10-17 2. The declaration may contain any other matters the declarant
10-18 considers appropriate.
10-19 Sec. 30. NRS 116.2111 is hereby amended to read as follows:
10-20 116.2111 [Subject]
10-21 1. Except as otherwise provided in this section and subject to the
10-22 provisions of the declaration and other provisions of law, a unit’s owner:
10-23 [1.] (a) May make any improvements or alterations to his unit that do
10-24 not impair the structural integrity or mechanical systems or lessen the
10-25 support of any portion of the common-interest community;
10-26 [2.] (b) May not change the appearance of the common elements, or the
10-27 exterior appearance of a unit or any other portion of the common-interest
10-28 community, without permission of the association; and
10-29 [3.] (c) After acquiring an adjoining unit or an adjoining part of an
10-30 adjoining unit, may remove or alter any intervening partition or create
10-31 apertures therein, even if the partition in whole or in part is a common
10-32 element, if those acts do not impair the structural integrity or mechanical
10-33 systems or lessen the support of any portion of the common-interest
10-34 community. Removal of partitions or creation of apertures under this
10-35 [subsection] paragraph is not an alteration of boundaries.
10-36 2. An association may not:
10-37 (a) Require the removal of any structure, fixture or other
10-38 improvement made to a unit if it was approved by the association in
10-39 writing before it was installed or constructed in accordance with
10-40 procedures set forth in the governing documents of the association.
10-41 (b) Unreasonably restrict, prohibit or otherwise impede the lawful
10-42 rights of a unit’s owner to have reasonable access to his unit.
10-43 (c) Prohibit or unreasonably restrict or withhold approval for a unit’s
10-44 owner to include or add in or to a unit:
10-45 (1) An apparatus required for the use of solar energy;
10-46 (2) Improvements such as ramps, railings or elevators that are
10-47 necessary or desirable to increase the unit’s owner’s access to his unit if
10-48 an occupant of the unit is disabled; or
11-1 (3) Shutters or additional locks that are desirable to make a unit’s
11-2 owner feel safe in his unit.
11-3 3. If the improvement or alteration is visible from any other portion
11-4 of the common-interest community, any device or other improvement
11-5 included or added in or to a unit pursuant to paragraph (b) or (c) of
11-6 subsection 2 must be added or installed in accordance with the
11-7 procedures set forth in the governing documents of the association and
11-8 must be selected or designed to the maximum extent practicable to be
11-9 compatible with the style of the common-interest community.
11-10 Sec. 31. NRS 116.31031 is hereby amended to read as follows:
11-11 116.31031 1. If a unit’s owner, or a tenant or guest of a unit’s owner,
11-12 does not comply with a provision of the governing documents of an
11-13 association, the executive board of the association may, if the governing
11-14 documents so provide:
11-15 (a) Prohibit, for a reasonable time, the unit’s owner, or the tenant or
11-16 guest of the unit’s owner, from:
11-17 (1) Voting on matters related to the common-interest community.
11-18 (2) Usingthe common elements. The provisions of this subparagraph
11-19 do not prohibit the unit’s owner, or the tenant or guest of the unit’s owner,
11-20 from using any vehicular or pedestrian ingress or egress to go to or from
11-21 the unit, including any area used for parking.
11-22 (b) Require the unit’s owner, or the tenant or guest of the unit’s owner,
11-23 to pay a fine for each failure to comply . [that does not threaten the health
11-24 and welfare of the common-interest community.] The fine must be
11-25 commensurate with the severity of the violation . [, but] If the failure to
11-26 comply does not threaten the health, safety or welfare of the common-
11-27 interest community, the fine must not exceed $100 for each violation . [or
11-28 a total amount of $500, whichever is less.]
11-29 2. If a fine is imposed pursuant to subsection 1 and the violation is not
11-30 cured within 14 days or a longer period as may be established by the
11-31 executive board, the violation shall be deemed a continuing violation.
11-32 Thereafter, the executive board may impose an additional fine for the
11-33 violation for each 7-day period or portion thereof that the violation is not
11-34 cured [.] , but in no event may the cumulative total amount of the
11-35 additional fine exceed $1,000 per calendar year for each continuing
11-36 violation. Any additional fine for each continuing violation may be
11-37 imposed without notice and an opportunity to be heard.
11-38 3. Except as otherwise provided in subsection 2, the imposition of a
11-39 fine pursuant to this section must comply with the requirements of
11-40 subsection 6 of NRS 116.31065.
11-41 Sec. 32. NRS 116.31034 is hereby amended to read as follows:
11-42 116.31034 1. Except as otherwise provided in subsection 5 of NRS
11-43 116.212, not later than the termination of any period of declarant’s control,
11-44 the units’ owners shall elect an executive board of at least three members,
11-45 at least a majority of whom must be units’ owners. The executive board
11-46 shall elect the officers. The members and officers of the executive board
11-47 shall take office upon election.
12-1 2. The term of office of a member of the executive board may not
12-2 exceed 2 years. A member of the executive board may be elected to
12-3 succeed himself. The governing documents of the association must [set] :
12-4 (a) Set forth the month during which elections for the members of the
12-5 executive board must be held after the termination of any period of the
12-6 declarant’s control.
12-7 (b) Provide for terms of office that are staggered. The provisions of
12-8 this paragraph do not apply to members of the executive board appointed
12-9 by the declarant.
12-10 3. Not less than 30 days before the preparation of a ballot for the
12-11 election of members of the executive board, the secretary or other officer
12-12 specified in the bylaws of the association shall cause notice to be given to
12-13 each unit’s owner of his eligibility to serve as a member of the executive
12-14 board. Each unit’s owner who is qualified to serve as a member of the
12-15 executive board may have his name placed on the ballot along with the
12-16 names of the nominees selected by the members of the executive board or a
12-17 nominating committee established by the association.
12-18 4. A person may not be an officer or member of the executive board
12-19 if he or any member of his immediate family engages in the management
12-20 of the common-interest community.
12-21 5. An officer, employee, agent or director of a corporate owner of a
12-22 unit, a trustee or designated beneficiary of a trust that owns a unit, a partner
12-23 of a partnership that owns a unit, a member or manager of a limited-
12-24 liability company that owns a unit, and a fiduciary of an estate that owns a
12-25 unit may be an officer or member of the executive board. In all events
12-26 where the person serving or offering to serve as an officer or member of
12-27 the executive board is not the record owner, he shall file proof in the
12-28 records of the association that:
12-29 (a) He is associated with the corporate owner, trust, partnership ,
12-30 limited-liability company or estate as required by this subsection; and
12-31 (b) Identifies the unit or units owned by the corporate owner, trust,
12-32 partnership , limited-liability company or estate.
12-33 [5. The]
12-34 6. Except as otherwise provided in section 16 of this act, the election
12-35 of any member of the executive board must be conducted by secret written
12-36 ballot. The secretary or other officer specified in the bylaws of the
12-37 association shall cause to be sent prepaid by United States mail to the
12-38 mailing address of each unit within the common-interest community or to
12-39 any other mailing address designated in writing by the unit’s owner, a
12-40 secret ballot and a return envelope.
12-41 [6.] 7. Each member of the executive board shall, within 30 days after
12-42 his appointment or election, certify in writing that he has read and
12-43 understands the governing documents of the association and the provisions
12-44 of this chapter to the best of his ability.
12-45 Sec. 33. NRS 116.31036 is hereby amended to read as follows:
12-46 116.31036 1. Notwithstanding any provision of the declaration or
12-47 bylaws to the contrary, the units’ owners, by a two-thirds vote of all
12-48 persons [present and] entitled to vote at any meeting of the units’ owners at
12-49 which a quorum is present, may remove any member of the executive
13-1 board with or without cause, other than a member appointed by the
13-2 declarant.
13-3 2. The removal of any member of the executive board must be
13-4 conducted by secret written ballot. The secretary or other officer specified
13-5 in the bylaws of the association shall cause to be sent prepaid by United
13-6 States mail to the mailing address of each unit within the common-
13-7 interest community or to any other mailing address designated in writing
13-8 by the unit’s owner, a secret ballot and a return envelope.
13-9 3. If a member of an executive board is sued for liability for actions
13-10 undertaken in his role as a member of the board, the association shall
13-11 indemnify him for his losses or claims, and undertake all costs of defense,
13-12 unless it is proven that he acted with willful or wanton misfeasance or with
13-13 gross negligence. After such proof , the association is no longer liable for
13-14 the cost of defense, and may recover costs already expended from the
13-15 member of the executive board who so acted. Members of the executive
13-16 board are not personally liable to the victims of crimes occurring on the
13-17 property. Punitive damages may not be recovered against the association,
13-18 but may be recovered from persons whose activity gave rise to the
13-19 damages.
13-20 Sec. 34. NRS 116.3106 is hereby amended to read as follows:
13-21 116.3106 1. The bylaws of the association must provide:
13-22 (a) The number of members of the executive board and the titles of the
13-23 officers of the association;
13-24 (b) For election by the executive board of a president, treasurer,
13-25 secretary and any other officers of the association the bylaws specify;
13-26 (c) The qualifications, powers and duties, terms of office and manner of
13-27 electing and removing officers of the association and members of the
13-28 executive board and filling vacancies;
13-29 (d) Which, if any, of its powers the executive board or officers may
13-30 delegate to other persons or to a [managing agent;] person engaged in the
13-31 management of a common-interest community;
13-32 (e) Which of its officers may prepare, execute, certify and record
13-33 amendments to the declaration on behalf of the association;
13-34 (f) Procedural rules for conducting meetings of the association; [and]
13-35 (g) A method for amending the bylaws [.] ; and
13-36 (h) Procedural rules for conducting elections.
13-37 2. Except as otherwise provided in the declaration, the bylaws may
13-38 provide for any other matters the association deems necessary and
13-39 appropriate.
13-40 3. The bylaws must be written in plain English.
13-41 Sec. 35. NRS 116.31065 is hereby amended to read as follows:
13-42 116.31065 The rules adopted by an association:
13-43 1. Must be reasonably related to the purpose for which they are
13-44 adopted.
13-45 2. Must be sufficiently explicit in their prohibition, direction or
13-46 limitation to inform a unit’s owner, or a tenant or guest of a unit’s owner,
13-47 of any action or omission required for compliance.
13-48 3. Must not be adopted to evade any obligation of the association.
14-1 4. Must be consistent with the governing documents of the association
14-2 and must not arbitrarily restrict conduct or require the construction of any
14-3 capital improvement by a unit’s owner that is not required by the governing
14-4 documents of the association.
14-5 5. Must be uniformly enforced under the same or similar
14-6 circumstances against all units’ owners. [Any rule that is not so uniformly
14-7 enforced may not be enforced against any unit’s owner.]
14-8 6. May be enforced by the assessment of a fine only if:
14-9 (a) The [person alleged to have violated the rule has received notice of
14-10 the alleged violation that informs him of his opportunity to request a
14-11 hearing on the alleged violation.] association has given written notice by
14-12 regular mail to the unit’s owner that:
14-13 (1) Sets forth the alleged violation and any required corrective
14-14 action; and
14-15 (2) Includes a statement that he is entitled to a hearing on the
14-16 alleged violation before the imposition of the fine;
14-17 (b) The person alleged to have violated the rule is afforded an
14-18 opportunity to cure the alleged violation before the imposition of the fine;
14-19 and
14-20 (c) At least 30 days before the alleged violation, the [person alleged to
14-21 have violated the rule] unit’s owner was given written notice of the rule or
14-22 any amendment to the rule.
14-23 Sec. 36. NRS 116.31083 is hereby amended to read as follows:
14-24 116.31083 1. A meeting of the executive board of an association
14-25 must be held at least once every 90 days.
14-26 2. Except in an emergency or unless the bylaws of an association
14-27 require a longer period of notice, the secretary or other officer specified in
14-28 the bylaws of the association shall, not less than 10 days before the date of
14-29 a meeting of the executive board, cause notice of the meeting to be given to
14-30 the units’ owners. Such notice must be:
14-31 (a) Sent prepaid by United States mail to the mailing address of each
14-32 unit within the common-interest community or to any other mailing
14-33 address designated in writing by the unit’s owner; or
14-34 (b) Published in a newsletter or other similar publication that is
14-35 circulated to each unit’s owner.
14-36 3. In an emergency, the secretary or other officer specified in the
14-37 bylaws of the association shall, if practicable, cause notice of the meeting
14-38 to be sent prepaid by United States mail to the mailing address of each unit
14-39 within the common-interest community. If delivery of the notice in this
14-40 manner is impracticable, the notice must be hand-delivered to each unit
14-41 within the common-interest community or posted in a prominent place or
14-42 places within the common elements of the association.
14-43 4. The notice of a meeting of the executive board of an association
14-44 must state the time and place of the meeting and include a copy of the
14-45 agenda for the meeting or the date on which and the locations where copies
14-46 of the agenda may be conveniently obtained by the units’ owners of the
14-47 association. The notice must include notification of the right of a unit’s
14-48 owner to:
15-1 (a) Have a copy of the minutes or a summary of the minutes of the
15-2 meeting distributed to him upon request and, if required by the executive
15-3 board, upon payment to the association of the cost of making the
15-4 distribution.
15-5 (b) Speak to the association or executive board, unless the executive
15-6 board is meeting in executive session.
15-7 5. The agenda of the meeting of the executive board of an association
15-8 must comply with the provisions of subsection 3 of NRS 116.3108. The
15-9 period required to be devoted to comments by units’ owners and discussion
15-10 of those comments must be scheduled for the beginning of each meeting.
15-11 In an emergency, the executive board may take action on an item which is
15-12 not listed on the agenda as an item on which action may be taken.
15-13 6. At least once every 90 days, unless the declaration or bylaws of the
15-14 association impose more stringent standards, the executive board shall
15-15 review at one of its meetings:
15-16 (a) A current reconciliation of the operating account of the association;
15-17 (b) A current reconciliation of the reserve account of the association;
15-18 (c) The actual revenues and expenses for the reserve account, compared
15-19 to the budget for that account for the current year;
15-20 (d) The latest account statements prepared by the financial institutions
15-21 in which the accounts of the association are maintained;
15-22 (e) An income and expense statement, prepared on at least a quarterly
15-23 basis, for the operating and reserve accounts of the association; and
15-24 (f) The current status of any civil action or claim submitted to
15-25 arbitration or mediation in which the association is a party.
15-26 7. [The] Except as otherwise provide in this subsection, the minutes
15-27 of a meeting of the executive board of an association must [be] :
15-28 (a) Include:
15-29 (1) The date, time and place of the meeting;
15-30 (2) Those members of the executive board who were present and
15-31 those members who were absent;
15-32 (3) The substance of all matters proposed, discussed or decided and,
15-33 at the request of any member of the executive board, a record of each
15-34 member’s vote on any matter decided by vote; and
15-35 (4) The substance of remarks made by any unit’s owner who
15-36 addresses the executive board if he requests that the minutes reflect his
15-37 remarks or, if he has prepared written remarks, a copy of his prepared
15-38 remarks if he submits a copy for inclusion;
15-39 (b) Be maintained by the association until the common-interest
15-40 community is terminated; and
15-41 (c) Be made available to the units’ owners in accordance with the
15-42 provisions of subsection 5 of NRS 116.3108.
15-43 The executive board of an association may establish reasonable
15-44 limitations on materials, remarks or other information to be included in
15-45 the minutes of its meetings.
15-46 8. A unit’s owner may record on audiotape or any other means of
15-47 sound reproduction a meeting of the executive board, unless the board is
15-48 meeting in executive session, if the members of the board and units’
16-1 owners who are in attendance are notified of the intent of the unit’s
16-2 owner to record the meeting.
16-3 9. As used in this section, “emergency” means any occurrence or
16-4 combination of occurrences that:
16-5 (a) Could not have been reasonably foreseen;
16-6 (b) Affects the health, welfare and safety of the units’ owners of the
16-7 association;
16-8 (c) Requires the immediate attention of, and possible action by, the
16-9 executive board; and
16-10 (d) Makes it impracticable to comply with the provisions of subsection
16-11 2 or 5.
16-12 Sec. 37. NRS 116.31085 is hereby amended to read as follows:
16-13 116.31085 1. Except as otherwise provided in this section, a unit’s
16-14 owner may attend any meeting of the units’ owners of the association or of
16-15 the executive board and speak at any such meeting. The executive board
16-16 may establish reasonable limitations on the time a unit’s owner may speak
16-17 at such a meeting.
16-18 2. An executive board may meet in executive session to:
16-19 (a) Consult with the attorney for the association on matters relating to
16-20 proposed or pending litigation if the contents of the discussion would
16-21 otherwise be governed by the privilege set forth in NRS 49.035 to 49.115,
16-22 inclusive;
16-23 (b) Discuss [matters relating to personnel;] an employee of the
16-24 association or an employee of a person engaged in the management of
16-25 the common-interest community who is working solely for the
16-26 association; or
16-27 (c) Discuss a violation of the governing documents alleged to have been
16-28 committed by a unit’s owner, including, without limitation, the failure to
16-29 pay an assessment, except as otherwise provided in subsection 3.
16-30 3. An executive board shall meet in executive session to hold a hearing
16-31 on an alleged violation of the governing documents unless the [unit’s
16-32 owner] person who allegedly committed the violation requests in writing
16-33 that the hearing be conducted by the executive board at an open meeting.
16-34 The [unit’s owner] person who is alleged to have committed the violation
16-35 may attend the [hearing] executive session and testify concerning the
16-36 alleged violation, but may be excluded by the executive board from any
16-37 other portion of the [hearing,] executive session, including, without
16-38 limitation, the deliberations of the executive board.
16-39 4. Except as otherwise provided in this subsection, any matter
16-40 discussed in executive session must be generally noted in the minutes of
16-41 the meeting of the executive board. The executive board shall maintain
16-42 minutes of any decision made pursuant to subsection 3 and, upon request,
16-43 provide a copy of the decision to the [unit’s owner] person who was the
16-44 subject of the [hearing] executive session or to his designated
16-45 representative.
16-46 5. Except as otherwise provided in subsection 3, a unit’s owner is not
16-47 entitled to attend or speak at a meeting of the executive board held in
16-48 executive session.
17-1 Sec. 38. NRS 116.3109 is hereby amended to read as follows:
17-2 116.3109 1. Except as otherwise provided in this section and unless
17-3 the bylaws provide otherwise, a quorum is present throughout any meeting
17-4 of the association if persons entitled to cast 20 percent of the votes that
17-5 may be cast for election of the executive board are present in person or by
17-6 proxy at the beginning of the meeting.
17-7 2. If the governing documents of an association provide for a
17-8 quorum at a meeting of the association that is greater than 20 percent of
17-9 the votes that may be cast for election of the executive board, and such a
17-10 meeting for which proper notice has been given cannot be held because a
17-11 quorum is not present, the units’ owners in attendance, either in person
17-12 or by proxy in accordance with the governing documents of the
17-13 association, may adjourn the meeting to a time that is not less than 48
17-14 hours or more than 30 days from the date of the meeting. At the
17-15 subsequent meeting, a quorum is present if persons entitled to cast 20
17-16 percent of the votes that may be cast for election of the executive board
17-17 are present in person or by proxy. If fewer units’ owners than that
17-18 required by the quorum requirement contained in the governing
17-19 documents are present at the subsequent meeting in person or by proxy
17-20 in accordance with the governing documents, only those matters
17-21 included on the agenda of the original meeting may be voted upon.
17-22 3. Unless the bylaws specify a larger percentage, a quorum is deemed
17-23 present throughout any meeting of the executive board if persons entitled
17-24 to cast 50 percent of the votes on that board are present at the beginning of
17-25 the meeting.
17-26 [3.] 4. For the purposes of [determining whether a quorum is present
17-27 for the election of] electing any member of the executive board, a quorum
17-28 is not required and only the secret written ballots that are returned to the
17-29 association may be counted.
17-30 Sec. 39. NRS 116.311 is hereby amended to read as follows:
17-31 116.311 1. If only one of several owners of a unit is present at a
17-32 meeting of the association, that owner is entitled to cast all the votes
17-33 allocated to that unit. If more than one of the owners are present, the votes
17-34 allocated to that unit may be cast only in accordance with the agreement of
17-35 a majority in interest of the owners, unless the declaration expressly
17-36 provides otherwise. There is majority agreement if any one of the owners
17-37 cast the votes allocated to that unit without protest made promptly to the
17-38 person presiding over the meeting by any of the other owners of the unit.
17-39 2. Except as otherwise provided in this section, votes allocated to a
17-40 unit may be cast pursuant to a proxy executed by a unit’s owner. A unit’s
17-41 owner may give a proxy only to a member of his immediate family, a
17-42 tenant of the unit’s owner who resides in the common-interest community
17-43 or another unit’s owner who resides in the common-interest community. If
17-44 a unit is owned by more than one person, each owner of the unit may vote
17-45 or register protest to the casting of votes by the other owners of the unit
17-46 through an executed proxy. A unit’s owner may revoke a proxy given
17-47 pursuant to this section only by actual notice of revocation to the person
17-48 presiding over a meeting of the association. A proxy is void if:
17-49 (a) It is not dated or purports to be revocable without notice;
18-1 (b) It does not designate the votes that must be cast on behalf of the
18-2 unit’s owner who executed the proxy; or
18-3 (c) The holder of the proxy does not disclose at the beginning of the
18-4 meeting for which the proxy is executed the number of proxies pursuant to
18-5 which he will be casting votes . [and the voting instructions received for
18-6 each proxy.]
18-7 A proxy terminates immediately after the conclusion of the meeting for
18-8 which it was executed. A vote may not be cast pursuant to a proxy for the
18-9 election or removal of a member of the executive board of an association.
18-10 3. Only a vote cast in person, by secret ballot or by proxy, may be
18-11 counted.
18-12 4. If the declaration requires that votes on specified matters affecting
18-13 the common-interest community be cast by lessees rather than units’
18-14 owners of leased units:
18-15 (a) The provisions of subsections 1 and 2 apply to lessees as if they
18-16 were units’ owners;
18-17 (b) Units’ owners who have leased their units to other persons may not
18-18 cast votes on those specified matters; and
18-19 (c) Lessees are entitled to notice of meetings, access to records,
18-20 and other rights respecting those matters as if they were units’
18-21 owners.
18-22 Units’ owners must also be given notice, in the manner provided in NRS
18-23 116.3108, of all meetings at which lessees are entitled to vote.
18-24 5. No votes allocated to a unit owned by the association may be cast.
18-25 6. Votes cast for the election or removal of a member of the executive
18-26 board of an association must be counted in public.
18-27 Sec. 40. NRS 116.31139 is hereby amended to read as follows:
18-28 116.31139 1. An association may employ a [person engaged in
18-29 property management for the common-interest community.] community
18-30 manager.
18-31 2. Except as otherwise provided in this section, a [person engaged in
18-32 property management for a common-interest community] community
18-33 manager must:
18-34 (a) Hold a permit to engage in property management that is issued
18-35 pursuant to the provisions of chapter 645 of NRS; or
18-36 (b) Hold a certificate issued by the [real estate commission] division
18-37 pursuant to subsection 3.
18-38 3. The [real estate commission] division commission shall provide by
18-39 regulation for the issuance of certificates for [the management of common-
18-40 interest communities to persons] community managers who are not
18-41 otherwise authorized to engage in property management pursuant to the
18-42 provisions of chapter 645 of NRS. The regulations:
18-43 (a) Must establish the qualifications for the issuance of such a
18-44 certificate, including the education and experience required to obtain such
18-45 a certificate;
18-46 (b) May require applicants to pass an examination in order to obtain a
18-47 certificate;
18-48 (c) Must establish standards of practice for [persons engaged in property
18-49 management for a common-interest community;] community managers;
19-1 (d) Must establish the grounds for initiating disciplinary action against a
19-2 person to whom a certificate has been issued, including, without limitation,
19-3 the grounds for placing conditions, limitations or restrictions on a
19-4 certificate and for the suspension or revocation of a certificate; and
19-5 (e) Must establish rules of practice and procedure for conducting
19-6 disciplinary hearings.
19-7 The [real estate division of the department of business and industry]
19-8 division may investigate the [property] community managers to whom
19-9 certificates have been issued to ensure their compliance with the standards
19-10 of practice adopted pursuant to this subsection and collect a fee for the
19-11 issuance of a certificate by the [commission] division in an amount not to
19-12 exceed the administrative costs of issuing the certificate.
19-13 4. The provisions of subsection 2 do not apply to:
19-14 (a) A person who is engaged in [property management for] the
19-15 management of a common-interest community on October 1, [1999,]
19-16 2001, and is granted an exemption from the requirements of subsection 2
19-17 by the administrator upon demonstration that he is qualified and competent
19-18 to engage in [property management for] the management of a common-
19-19 interest community.
19-20 (b) A financial institution.
19-21 (c) An attorney licensed to practice in this state.
19-22 (d) A trustee.
19-23 (e) An employee of a corporation who manages only the property of the
19-24 corporation [.] , unless that corporation is also an association.
19-25 (f) A declarant.
19-26 (g) A receiver.
19-27 [5. As used in this section, “property management” means the
19-28 physical, administrative or financial maintenance and management of real
19-29 property, or the supervision of those activities for a fee, commission or
19-30 other compensation or valuable consideration.]
19-31 (h) An officer or member of the executive board of an association who
19-32 acts solely as an officer or member of the executive board.
19-33 Sec. 41. NRS 116.31152 is hereby amended to read as follows:
19-34 116.31152 1. The executive board of an association shall:
19-35 (a) Cause to be conducted at least once every 5 years, a study of the
19-36 reserves required to repair, replace and restore the major components of the
19-37 common elements;
19-38 (b) Review the results of that study at least annually to determine if
19-39 those reserves are sufficient; and
19-40 (c) Make any adjustments it deems necessary to maintain the required
19-41 reserves.
19-42 2. The study required by subsection 1 must be conducted by a person
19-43 qualified by training and experience to conduct such a study, including a
19-44 member of the executive board, a unit’s owner or the [property]
19-45 community manager of the association who is so qualified. The study must
19-46 include, without limitation:
19-47 (a) A summary of an inspection of the major components of the
19-48 common elements the association is obligated to repair, replace or restore;
20-1 (b) An identification of the major components of the common elements
20-2 that the association is obligated to repair, replace or restore which have a
20-3 remaining useful life of less than 30 years;
20-4 (c) An estimate of the remaining useful life of each major component
20-5 identified pursuant to paragraph (b);
20-6 (d) An estimate of the cost of repair, replacement or restoration of each
20-7 major component identified pursuant to paragraph (b) during and at the end
20-8 of its useful life; and
20-9 (e) An estimate of the total annual assessment that may be required to
20-10 cover the cost of repairing, replacement or restoration of the major
20-11 components identified pursuant to paragraph (b), after subtracting the
20-12 reserves of the association as of the date of the study.
20-13 3. The administrator shall adopt by regulation the qualifications
20-14 required for conducting a study required by subsection 1.
20-15 Sec. 42. NRS 116.31155 is hereby amended to read as follows:
20-16 116.31155 1. An association shall:
20-17 (a) If the association is required to pay the fee imposed by NRS 78.150
20-18 or [or 82.193,] 82.193 or 86.263, pay to the administrator a fee established
20-19 by regulation of the administrator for every unit in the association used for
20-20 residential use.
20-21 (b) If the association is organized as a trust or partnership, pay to the
20-22 administrator a fee established by regulation of the administrator for each
20-23 unit in the association.
20-24 2. The fees required to be paid pursuant to this section must be:
20-25 (a) Paid at such times as are established by the [administrator.] division.
20-26 (b) Deposited with the state treasurer for credit to the account for [the
20-27 ombudsman for owners in] common-interest communities created pursuant
20-28 to NRS 116.1117.
20-29 (c) Established on the basis of the actual cost of administering the office
20-30 of the ombudsman for owners in common-interest communities and not on
20-31 a basis which includes any subsidy for the office. In no event may the fees
20-32 required to be paid pursuant to this section exceed $3 per unit.
20-33 3. A unit’s owner may not be required to pay any portion of the fees
20-34 required to be paid pursuant to this section to a master association and to an
20-35 association organized pursuant to NRS 116.3101.
20-36 4. Upon the payment of the fees required by this section, the
20-37 administrator shall provide to the association evidence that it paid the fees
20-38 in compliance with this section.
20-39 Sec. 43. NRS 116.31158 is hereby amended to read as follows:
20-40 116.31158 1. Each association shall, at the time it pays the fee
20-41 required by NRS 116.31155, register with the ombudsman for owners in
20-42 common-interest communities on a form prescribed by the ombudsman.
20-43 2. The form for registration must include, without limitation, the
20-44 information required to be maintained pursuant to paragraph [(d)] (e) of
20-45 subsection 4 of NRS 116.1116.
20-46 Sec. 44. NRS 116.31162 is hereby amended to read as follows:
20-47 116.31162 1. Except as otherwise provided in subsection 4, in a
20-48 condominium, a cooperative where the owner’s interest in a unit is real
21-1 estate as determined pursuant to NRS 116.1105, or a planned community,
21-2 the association may foreclose its lien by sale after:
21-3 (a) The association has mailed by certified or registered mail, return
21-4 receipt requested, to the unit’s owner or his successor in interest, at his
21-5 address if known, and at the address of the unit, a notice of delinquent
21-6 assessment which states the amount of the assessments and other sums
21-7 which are due in accordance with subsection 1 of NRS 116.3116, a
21-8 description of the unit against which the lien is imposed, and the name of
21-9 the record owner of the unit;
21-10 (b) [The] Not less than 30 days after mailing the notice of delinquent
21-11 assessment pursuant to paragraph (a), the association or other person
21-12 conducting the sale has executed and caused to be recorded, with the
21-13 county recorder of the county in which the common-interest community or
21-14 any part of it is situated, a notice of default and election to sell the unit to
21-15 satisfy the lien, which contains the same information as the notice of
21-16 delinquent assessment, but must also describe the deficiency in payment
21-17 and the name and address of the person authorized by the association to
21-18 enforce the lien by sale; and
21-19 (c) The unit’s owner or his successor in interest has failed to pay the
21-20 amount of the lien, including costs, fees and expenses incident to its
21-21 enforcement, for 60 days following the recording of the notice of default
21-22 and election to sell.
21-23 2. The notice of default and election to sell must be signed by the
21-24 person designated in the declaration or by the association for that purpose,
21-25 or if no one is designated, by the president of the association.
21-26 3. The period of 60 days begins on the first day following the
21-27 later of:
21-28 (a) The day on which the notice of default is recorded; [or]
21-29 (b) The day on which a copy of the notice of default is mailed by
21-30 certified or registered mail, return receipt requested, to the unit’s owner or
21-31 his successor in interest at his address if known, and at the address of the
21-32 unit [.] ; or
21-33 (c) The association has provided written certification to the
21-34 ombudsman for owners in common-interest communities that notices
21-35 have been given in accordance with subsection 1.
21-36 4. The association may not foreclose a lien by sale for the assessment
21-37 of a fine for a violation of the declaration, bylaws, rules or regulations of
21-38 the association, unless the violation is of a type that threatens the health,
21-39 safety or welfare of the residents of the common-interest community.
21-40 Sec. 45. NRS 116.31175 is hereby amended to read as follows:
21-41 116.31175 1. Except as otherwise provided in this subsection, the
21-42 executive board of an association shall, upon the written request of a unit’s
21-43 owner, make available the books, records and other papers of the
21-44 association for review during the regular working hours of the association
21-45 [.] , including, without limitation, all records filed with a court relating to
21-46 a civil or criminal action to which the association is a party. The
21-47 provisions of this subsection do not apply to:
22-1 (a) The personnel records of the employees of the association [;] ,
22-2 except for those records relating to the salaries and benefits of those
22-3 employees; and
22-4 (b) The records of the association relating to another unit’s owner.
22-5 2. If the executive board refuses to allow a unit’s owner to review the
22-6 books, records or other papers of the association, the ombudsman for
22-7 owners in common-interest communities may:
22-8 (a) On behalf of the unit’s owner and upon written request, review the
22-9 books, records or other papers of the association during the regular
22-10 working hours of the association; and
22-11 (b) If he is denied access to the books, records or other papers, request
22-12 the commission to issue a subpoena for their production.
22-13 3. The books, records and other papers of an association must be
22-14 maintained for at least 10 years.
22-15 Sec. 46. NRS 116.4108 is hereby amended to read as follows:
22-16 116.4108 1. A person required to deliver a public offering statement
22-17 pursuant to subsection 3 of NRS 116.4102 shall provide a purchaser with a
22-18 copy of the current public offering statement not later than the date [of any
22-19 contract of sale.] on which an offer to purchase becomes binding on the
22-20 purchaser. Unless the purchaser has personally inspected the unit, the
22-21 purchaser may cancel, by written notice, the contract of purchase until
22-22 midnight of the fifth calendar day following the date of execution of the
22-23 contract, and the contract for purchase must contain a provision to that
22-24 effect.
22-25 2. If a purchaser elects to cancel a contract pursuant to subsection 1, he
22-26 may do so by hand delivering notice thereof to the offeror or by mailing
22-27 notice thereof by prepaid United States mail to the offeror or to his agent
22-28 for service of process. Cancellation is without penalty, and all payments
22-29 made by the purchaser before cancellation must be refunded promptly.
22-30 3. If a person required to deliver a public offering statement pursuant
22-31 to subsection 3 of NRS 116.4102 fails to provide a purchaser to whom a
22-32 unit is conveyed with a current public offering statement, the purchaser is
22-33 entitled to actual damages, rescission or other relief, but if the purchaser
22-34 has accepted a conveyance of the unit, he is not entitled to rescission.
22-35 Sec. 47. NRS 116.4109 is hereby amended to read as follows:
22-36 116.4109 1. Except in the case of a sale in which delivery of a public
22-37 offering statement is required, or unless exempt under subsection 2 of NRS
22-38 116.4101, a unit’s owner shall furnish to a purchaser before [execution of
22-39 any contract for sale of a unit, or otherwise before conveyance:] an offer to
22-40 purchase a unit becomes binding on the purchaser:
22-41 (a) A copy of the declaration, other than any plats and plans, the bylaws,
22-42 the rules or regulations of the association and, except for a time share
22-43 governed by the provisions of chapter 119A of NRS, the information
22-44 statement required by NRS 116.41095;
22-45 (b) A statement setting forth the amount of the monthly assessment for
22-46 common expenses and any unpaid assessment of any kind currently due
22-47 from the selling unit’s owner;
22-48 (c) The current operating budget of the association and a financial
22-49 statement for the association; and
23-1 (d) A statement of any unsatisfied judgments or pending legal actions
23-2 against the association and the status of any pending legal actions relating
23-3 to the common-interest community of which the unit’s owner has actual
23-4 knowledge.
23-5 2. The association, within 10 days after a request by a unit’s owner,
23-6 shall furnish a certificate containing the information necessary to enable
23-7 the unit’s owner to comply with this section. A unit’s owner providing a
23-8 certificate pursuant to subsection 1 is not liable to the purchaser for any
23-9 erroneous information provided by the association and included in the
23-10 certificate.
23-11 3. Neither a purchaser nor the purchaser’s interest in a unit is liable for
23-12 any unpaid assessment or fee greater than the amount set forth in the
23-13 certificate prepared by the association. If the association fails to furnish the
23-14 certificate within the 10 days allowed by subsection 2, the seller is not
23-15 liable for the delinquent assessment.
23-16 Sec. 48. NRS 116.41095 is hereby amended to read as follows:
23-17 116.41095 The information statement required by NRS 116.4103 and
23-18 116.4109 must be in substantially the following form:
23-19 BEFORE YOU PURCHASE PROPERTY IN A
23-20 COMMON-INTEREST COMMUNITY
23-21 DID YOU KNOW . . .
23-22 1. YOU ARE AGREEING TO RESTRICTIONS ON HOW YOU
23-23 CAN USE YOUR PROPERTY?
23-24 These restrictions are contained in a document known as the Declaration of
23-25 Covenants, Conditions and Restrictions (C, C & R’s) that should be
23-26 provided for your review before making your purchase. The C, C & R’s
23-27 become a part of the title to your property. They bind you and every future
23-28 owner of the property whether or not you have read them or had them
23-29 explained to you. The C, C & R’s, together with other “governing
23-30 documents” (such as association bylaws and rules and regulations), are
23-31 intended to preserve the character and value of properties in the
23-32 community, but may also restrict what you can do to improve or change
23-33 your property and limit how you use and enjoy your property. By
23-34 purchasing a property encumbered by C, C & R’s, you are agreeing to
23-35 limitations that could affect your lifestyle and freedom of choice. You
23-36 should review the C, C & R’s and other governing documents before
23-37 purchasing to make sure that these limitations and controls are acceptable
23-38 to you.
23-39 2. YOU WILL HAVE TO PAY OWNERS’ ASSESSMENTS FOR AS
23-40 LONG AS YOU OWN YOUR PROPERTY?
23-41 As an owner in a common-interest community, you are responsible for
23-42 paying your share of expenses relating to the common elements, such as
23-43 landscaping, shared amenities and the operation of any homeowner’s
23-44 association. The obligation to pay these assessments binds you and every
23-45 future owner of the property. Owners’ fees are usually assessed by the
23-46 homeowner’s association and due monthly. You have to pay dues whether
23-47 or not you agree with the way the association is managing the property or
23-48 spending the assessments. The executive board of the association may have
24-1 the power to change and increase the amount of the assessment and to levy
24-2 special assessments against your property to meet extraordinary expenses.
24-3 In some communities, major components of the community such as roofs
24-4 and private roads must be maintained and replaced by the association. If
24-5 the association is not well managed or fails to maintain adequate reserves
24-6 to repair, replace and restore common elements, you may be required to
24-7 pay large, special assessments to accomplish these tasks.
24-8 3. IF YOU FAIL TO PAY OWNERS’ ASSESSMENTS, YOU
24-9 COULD LOSE YOUR HOME?
24-10 If you do not pay these assessments when due, the association usually has
24-11 the power to collect them by selling your property in a nonjudicial
24-12 foreclosure sale. If fees become delinquent, you may also be required to
24-13 pay penalties and the association’s costs and attorney’s fees to become
24-14 current. If you dispute the obligation or its amount, your only remedy to
24-15 avoid the loss of your home may be to file a lawsuit and ask a court to
24-16 intervene in the dispute.
24-17 4. YOU MAY BECOME A MEMBER OF A HOMEOWNER’S
24-18 ASSOCIATION THAT HAS THE POWER TO AFFECT HOW YOU
24-19 USE AND ENJOY YOUR PROPERTY?
24-20 Many common-interest communities have a homeowner’s association. In a
24-21 new development, the association will usually be controlled by the
24-22 developer until a certain number of units have been sold. After the period
24-23 of developer control, the association may be controlled by property owners
24-24 like yourself who are elected by homeowners to sit on an executive board
24-25 and other boards and committees formed by the association. The
24-26 association, and its executive board, are responsible for assessing
24-27 homeowners for the cost of operating the association and the common or
24-28 shared elements of the community and for the day to day operation and
24-29 management of the community. Because homeowners sitting on the
24-30 executive board and other boards and committees of the association may
24-31 not have the experience or professional background required to understand
24-32 and carry out the responsibilities of the association properly, the
24-33 association may hire professional managers to carry out these
24-34 responsibilities.
24-35 Homeowner’s associations operate on democratic principles. Some
24-36 decisions require all homeowners to vote, some decisions are made by the
24-37 executive board or other boards or committees established by the
24-38 association or governing documents. Although the actions of the
24-39 association and its executive board are governed by state laws, the C, C &
24-40 R’s and other documents that govern the common-interest community,
24-41 decisions made by these persons will affect your use and enjoyment of
24-42 your property, your lifestyle and freedom of choice, and your cost of living
24-43 in the community. You may not agree with decisions made by the
24-44 association or its governing bodies even though the decisions are ones
24-45 which the association is authorized to make. Decisions may be made by a
24-46 few persons on the executive board or governing bodies that do not
24-47 necessarily reflect the view of the majority of homeowners in the
24-48 community. If you do not agree with decisions made by the association, its
24-49 executive board or other governing bodies, your remedy is typically to
25-1 attempt to use the democratic processes of the association to seek the
25-2 election of members of the executive board or other governing bodies that
25-3 are more responsive to your needs. If persons controlling the association or
25-4 its management are not complying with state laws or the governing
25-5 documents, your remedy is typically to seek to mediate or arbitrate the
25-6 dispute and, if mediation or arbitration is unsuccessful, file a lawsuit and
25-7 ask a court to resolve the dispute. In addition to your personal cost in
25-8 mediation or arbitration, or to prosecute a lawsuit, you may be responsible
25-9 for paying your share of the association’s cost in defending against your
25-10 claim. There is no government agency in this state that investigates or
25-11 intervenes to resolve disputes in homeowner’s associations.
25-12 5. YOU ARE REQUIRED TO PROVIDE PROSPECTIVE BUYERS
25-13 OF YOUR PROPERTY WITH INFORMATION ABOUT LIVING IN
25-14 YOUR COMMON-INTEREST COMMUNITY?
25-15 The law requires you to provide to a prospective purchaser of your
25-16 property, before you enter into a purchase agreement, a copy of the
25-17 community’s governing documents, including the C, C & R’s, association
25-18 bylaws, and rules and regulations, as well as a copy of this document. You
25-19 are also required to provide a copy of the association’s current financial
25-20 statement, operating budget and information regarding the amount of the
25-21 monthly assessment for common expenses, including the amount set aside
25-22 as reserves for the repair, replacement and restoration of common
25-23 elements. You are also required to inform prospective purchasers of any
25-24 outstanding judgments or lawsuits pending against the association of which
25-25 you are aware. You are also required to provide a copy of the minutes from
25-26 the most recent meeting of the homeowner’s association or its executive
25-27 board. For more information regarding these requirements, see Nevada
25-28 Revised Statutes 116.4103 [.] and 116.4109.
25-29 6. YOU HAVE CERTAIN RIGHTS REGARDING OWNERSHIP IN
25-30 A COMMON-INTEREST COMMUNITY THAT ARE GUARANTEED
25-31 YOU BY THE STATE?
25-32 Pursuant to provisions of chapter 116 of Nevada Revised Statutes, you
25-33 have the right:
25-34 (a) To be notified of all meetings of the association and its executive
25-35 board, except in cases of emergency.
25-36 (b) To attend and speak at all meetings of the association and its
25-37 executive board, except in some cases where the executive board is
25-38 authorized to meet in closed, executive session.
25-39 (c) To request a special meeting of the association upon petition of at
25-40 least 10 percent of the homeowners.
25-41 (d) To inspect, examine, photocopy and audit financial and other
25-42 records of the association.
25-43 (e) To be notified of all changes in the community’s rules and
25-44 regulations and other actions by the association or board that affect you.
25-45 7. QUESTIONS?
25-46 Although they may be voluminous, you should take the time to read and
25-47 understand the documents that will control your ownership of a property in
25-48 a common-interest community. You may wish to ask your real estate
25-49 professional, lawyer or other person with experience to explain anything
26-1 you do not understand. You may also request assistance from the
26-2 ombudsman for owners in common-interest communities, Nevada Real
26-3 Estate Division, at (telephone number).
26-4 Buyer or prospective buyer’s initials:_____
26-5 Date:_____
26-6 Sec. 49. NRS 38.330 is hereby amended to read as follows:
26-7 38.330 1. If all parties named in a written claim filed pursuant to
26-8 NRS 38.320 agree to have the claim submitted for mediation, the parties
26-9 shall reduce the agreement to writing and shall select a mediator from the
26-10 list of mediators maintained by the division pursuant to NRS 38.340. Any
26-11 mediator selected must be available within the geographic area. If the
26-12 parties fail to agree upon a mediator, the division shall appoint a mediator
26-13 from the list of mediators maintained by the division. Any mediator
26-14 appointed must be available within the geographic area. Unless otherwise
26-15 provided by an agreement of the parties, mediation must be completed
26-16 within 60 days after the parties agree to mediation. Any agreement
26-17 obtained through mediation conducted pursuant to this section must, within
26-18 20 days after the conclusion of mediation, be reduced to writing by the
26-19 mediator and a copy thereof provided to each party. The agreement may be
26-20 enforced as any other written agreement. Except as otherwise provided in
26-21 this section, the parties are responsible for all costs of mediation conducted
26-22 pursuant to this section.
26-23 2. If all the parties named in the claim do not agree to mediation, the
26-24 parties shall select an arbitrator from the list of arbitrators maintained by
26-25 the division pursuant to NRS 38.340. Any arbitrator selected must be
26-26 available within the geographic area. If the parties fail to agree upon an
26-27 arbitrator, the division shall appoint an arbitrator from the list maintained
26-28 by the division. Any arbitrator appointed must be available within the
26-29 geographic area. Upon appointing an arbitrator, the division shall provide
26-30 the name of the arbitrator to each party.
26-31 3. The division may provide for the payment of the fees for a mediator
26-32 or an arbitrator selected or appointed pursuant to this section from the
26-33 account for [the ombudsman for owners in] common-interest communities
26-34 created pursuant to NRS 116.1117, to the extent that money is available in
26-35 the account for this purpose.
26-36 4. Except as otherwise provided in this section and except where
26-37 inconsistent with the provisions of NRS 38.300 to 38.360, inclusive, the
26-38 arbitration of a claim pursuant to this section must be conducted in
26-39 accordance with the provisions of sections 22, 23, 24, 26 to 29, inclusive,
26-40 31 and 32 of Senate Bill No. 336 of this [act.] session. At any time during
26-41 the arbitration of a claim relating to the interpretation, application or
26-42 enforcement of any covenants, conditions or restrictions applicable to
26-43 residential property or any bylaws, rules or regulations adopted by an
26-44 association, the arbitrator may issue an order prohibiting the action upon
26-45 which the claim is based. An award must be made within 30 days after the
26-46 conclusion of arbitration, unless a shorter period is agreed upon by the
26-47 parties to the arbitration.
26-48 5. If all the parties have agreed to nonbinding arbitration, any party to
26-49 the arbitration may, within 30 days after a decision and award have been
27-1 served upon the parties, commence a civil action in the proper court
27-2 concerning the claim which was submitted for arbitration. Any complaint
27-3 filed in such an action must contain a sworn statement indicating that the
27-4 issues addressed in the complaint have been arbitrated pursuant to the
27-5 provisions of NRS 38.300 to 38.360, inclusive. If such an action is not
27-6 commenced within that period, any party to the arbitration may, within 1
27-7 year after the service of the award, apply to the proper court for a
27-8 confirmation of the award pursuant to section 29 of Senate Bill No. 336 of
27-9 this [act.] session.
27-10 6. If all the parties agree in writing to binding arbitration, the
27-11 arbitration must be conducted in accordance with the provisions of [chapter
27-12 38 of NRS.] this chapter. An award procured pursuant to such arbitration
27-13 may be vacated and a rehearing granted upon application of a party
27-14 pursuant to the provisions of section 30 of Senate Bill No. 336 of this [act.]
27-15 session.
27-16 7. If, after the conclusion of arbitration, a party:
27-17 (a) Applies to have an award vacated and a rehearing granted pursuant
27-18 to section 30 of Senate Bill No. 336 of this [act;] session; or
27-19 (b) Commences a civil action based upon any claim which was the
27-20 subject of arbitration,
27-21 the party shall, if he fails to obtain a more favorable award or judgment
27-22 than that which was obtained in the initial arbitration, pay all costs and
27-23 reasonable attorney’s fees incurred by the opposing party after the
27-24 application for a rehearing was made or after the complaint in the civil
27-25 action was filed.
27-26 8. Upon request by a party, the division shall provide a statement to
27-27 the party indicating the amount of the fees for a mediator or an arbitrator
27-28 selected or appointed pursuant to this section.
27-29 9. As used in this section, “geographic area” means an area within 150
27-30 miles from any residential property or association which is the subject of a
27-31 written claim submitted pursuant to NRS 38.320.
27-32 Sec. 50. Section 14 of Assembly Bill No. 621 of this section is hereby
27-33 amended to read as follows:
27-34 Sec. 14. Chapter 116 of NRS is hereby amended by adding
27-35 thereto a new section to read as follows:
27-36 The expiration or revocation of a certificate for the management
27-37 of a common-interest community by operation of law or by order or
27-38 decision of the real estate commission or a court of competent
27-39 jurisdiction, or the voluntary surrender of such a certificate by the
27-40 holder of the certificate does not:
27-41 1. Prohibit the division or real estate commission from initiating
27-42 or continuing an investigation of, or action or disciplinary
27-43 proceeding against, the holder of the certificate as authorized
27-44 pursuant to the provisions of this chapter or the regulations adopted
27-45 pursuant thereto; or
27-46 2. Prevent the imposition or collection of any fine or penalty
27-47 authorized pursuant to the provisions of this chapter or the
27-48 regulations adopted pursuant thereto against the holder of the
27-49 certificate.
28-1 Sec. 51. Notwithstanding the provisions of section 40 of this act, a
28-2 person who engages in business as a community manager is not required to
28-3 be certified pursuant to the provisions of this act before January 1, 2002.
28-4 Sec. 52. The state treasurer shall transfer any balance remaining
28-5 unexpended on October 1, 2001, in the account for the ombudsman for
28-6 owners in common-interest communities in the state general fund to the
28-7 account for common-interest communities which is created pursuant to
28-8 NRS 116.1117, as amended by this act.
28-9 Sec. 53. 1. Section 49 of this act becomes effective at 12:01 a.m. on
28-10 October 1, 2001.
28-11 2. Sections 9, 10 and 11 of this act expire by limitation on the date on
28-12 which the provisions of 42 U.S.C. § 666 requiring each state to establish
28-13 procedures under which the state has authority to withhold or suspend, or
28-14 to restrict the use of professional, occupational and recreational licenses of
28-15 persons who:
28-16 (a) Have failed to comply with a subpoena or warrant relating to a
28-17 proceeding to determine the paternity of a child or to establish or enforce
28-18 an obligation for the support of a child; or
28-19 (b) Are in arrears in the payment for the support of one or more
28-20 children,
28-21 are repealed by the Congress of the United States.
28-22 H