Senate Bill No. 100–Senators Schneider, O’Connell
and Cegavske

 

February 12, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes to provisions governing common-interest communities. (BDR 10‑29)

 

FISCAL NOTE:    Effect on Local Government: No.

                             Effect on the State: Yes.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to common-interest communities; allowing a unit’s owner to display a flag of the United States within the boundaries of his unit; creating the Commission for Common-Interest Communities to hear and take action on complaints related to such communities; requiring community managers to be certified by the Real Estate Division of the Department of Business and Industry; limiting the circumstances under which an association may commence a civil action; 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; changing the time within which certain information must be provided to a prospective purchaser of a unit; making various other changes concerning common-interest communities; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

2-1  Section 1. Chapter 116 of NRS is hereby amended by adding

2-2  thereto the provisions set forth as sections 2 to 31, inclusive, of this

2-3  act.

2-4  Sec. 2.  “Certificate” means a certificate for the management

2-5  of a common-interest community issued by the Division pursuant

2-6  to NRS 116.31139.

2-7  Sec. 3.  “Commission” means the Commission for Common-

2-8  Interest Communities created by section 9 of this act.

2-9  Sec. 4.  “Community manager” means a person who holds a

2-10  certificate or permit and provides for the management of a

2-11  common-interest community.

2-12      Sec. 5.  “Division” means the Real Estate Division of the

2-13  Department of Business and Industry.

2-14      Sec. 6.  “Management of a common-interest community”

2-15  means the physical, administrative or financial maintenance and

2-16  management of a common-interest community, or the supervision

2-17  of those activities for a fee, commission or other valuable

2-18  consideration.

2-19      Sec. 7.  “Permit” means a permit to engage in property

2-20  management issued pursuant to the provisions of chapter 645 of

2-21  NRS.

2-22      Sec. 8.  1.  Notwithstanding any provision of the governing

2-23  documents to the contrary, and except as otherwise provided in

2-24  subsection 2, a unit’s owner may display a flag of the United

2-25  States within the boundaries of his unit.

2-26      2.  An association may adopt rules reasonably restricting the

2-27  placement and manner of display of a flag of the United States by

2-28  a unit’s owner.

2-29      3.  As used in this section, “flag of the United States” means a

2-30  flag of the United States made of fabric, cloth or paper displayed

2-31  from a staff or pole or in a window. The term does not include a

2-32  depiction or emblem of the flag of the United States made of

2-33  lights, paint, roofing, siding, paving materials, flora, balloons or

2-34  any other similar building, landscaping or decorative component.

2-35      Sec. 9.  1.  The Commission for Common-Interest

2-36  Communities, consisting of five members appointed by the

2-37  Governor, is hereby created.

2-38      2.  The Governor shall appoint to the Commission:

2-39      (a) Two members who are units’ owners residing in this state,

2-40  one of whom is serving or has served as a member of the executive

2-41  board of an association;

2-42      (b) One member who is in the business of developing common-

2-43  interest communities in this state;

2-44      (c) One member who holds a permit or certificate; and

3-1  (d) One member who has experience with or knowledge of

3-2  matters related to common-interest communities, other than

3-3  property management.

3-4  3.  At least three members of the Commission must be

3-5  residents of a county whose population is 400,000 or more. Each

3-6  member of the Commission must have resided in a common-

3-7  interest community or have been actively engaged in a business

3-8  related to common-interest communities for not less than 3 years

3-9  immediately preceding the date of his appointment.

3-10      4.  After the initial terms, each member of the Commission

3-11  shall serve a term of 3 years. Each member may serve no more

3-12  than two consecutive full terms. If a vacancy occurs during a

3-13  member’s term, the Governor shall appoint a person qualified

3-14  under this section to replace the member for the remainder of the

3-15  unexpired term.

3-16      5.  While engaged in the business of the Commission, each

3-17  member is entitled to receive:

3-18      (a) A salary of not more than $80 per day, as established by the

3-19  Commission; and

3-20      (b) The per diem allowance and travel expenses provided for

3-21  state officers and employees generally.

3-22      Sec. 10.  1.  The Commission shall, at the first meeting of

3-23  each fiscal year, elect from its members a Chairman, a Vice

3-24  Chairman and a Secretary.

3-25      2.  The Commission shall meet at least once each calendar

3-26  quarter and at other times on the call of the Chairman or a

3-27  majority of its members.

3-28      3.  A majority of the members of the Commission constitutes a

3-29  quorum for the transaction of all business.

3-30      Sec. 11.  1.  A person who is aggrieved by any act committed

3-31  in violation of the provisions of this chapter may, within 2 years

3-32  after the alleged violation and after submitting the complaint for

3-33  resolution to the Ombudsman for Owners in Common-Interest

3-34  Communities, file a written complaint with the Commission

3-35  specifying the relevant facts. The Commission may prescribe

3-36  forms and adopt procedures for the filing of such a complaint.

3-37      2.  Except as otherwise provided in this subsection, the

3-38  Commission shall, upon the receipt of such a complaint, conduct

3-39  an investigation to determine whether disciplinary action is

3-40  warranted. The Commission shall not investigate or take action on

3-41  a complaint that has been submitted to mediation or arbitration

3-42  pursuant to the provisions of NRS 38.300 to 38.360, inclusive.

3-43      3.  The Commission may require any person who knowingly

3-44  files a false or fraudulent complaint with the Commission to pay a

3-45  fine of not more than $1,000.

4-1  Sec. 12.  1.  To carry out its duties, the Commission, or any

4-2  member thereof, may issue subpoenas to compel the attendance of

4-3  witnesses and the production of books, records and other papers.

4-4  2.  If any person fails to comply with a subpoena issued by the

4-5  Commission pursuant to this section within 10 days after its

4-6  issuance, the Commission may petition the district court for an

4-7  order of the court compelling compliance with the subpoena.

4-8  3.  Upon such a petition, the court shall enter an order

4-9  directing the person subpoenaed to appear before the court at a

4-10  time and place to be fixed by the court in its order, the time to be

4-11  not more than 10 days after the date of the order, and to show

4-12  cause why he has not complied with the subpoena. A certified copy

4-13  must be served upon the person subpoenaed.

4-14      4.  If it appears to the court that the subpoena was regularly

4-15  issued by the Commission, the court shall enter an order

4-16  compelling compliance with the subpoena, and upon failure to

4-17  obey the order, the person must be dealt with as for contempt of

4-18  court.

4-19      Sec. 13.  1.  If the Commission determines that a complaint

4-20  received pursuant to section 11 of this act is not frivolous, the

4-21  Secretary of the Commission shall fix a time and place for a

4-22  hearing on the complaint and cause a notice of the hearing and a

4-23  formal complaint prepared by the Commission to be served on the

4-24  person who is alleged to have committed the violation. The notice

4-25  must be served at least 20 days before the date fixed for the

4-26  hearing.

4-27      2.  The Commission shall hold a hearing on the complaint

4-28  within 90 days after the complaint is filed with the Commission.

4-29  The hearing may be continued by the Commission upon its own

4-30  motion or upon written request, for good cause shown.

4-31      3.  Written notice may be served to the person alleged to have

4-32  committed the violation by personal delivery or by mailing it by

4-33  registered or certified mail to his last known address.

4-34      4.  If the person alleged to have committed the violation

4-35  submits a written request, the Commission shall furnish him with

4-36  copies of any communications, reports and affidavits in the

4-37  possession of the Commission relating to the complaint.

4-38      5.  A person may be represented by an attorney at any

4-39  proceeding or hearing conducted pursuant to this section or

4-40  section 14 of this act.

4-41      Sec. 14.  1.  All money received by the Commission must be

4-42  deposited in a bank or other financial institution in this state and

4-43  paid out on the order of the Commission for its expenses.

4-44      2.  The Commission may delegate to an independent hearing

4-45  officer or panel the authority of the Commission to take any

5-1  disciplinary action pursuant to sections 11 to 17, inclusive, of this

5-2  act, including the authority to impose and collect fines and

5-3  penalties. Fines and penalties imposed by an independent hearing

5-4  officer or panel must be deposited in an account for the

5-5  Commission in a bank or other financial institution in this state.

5-6  3.  If a hearing officer or panel is not authorized to take

5-7  disciplinary action and determine the amount of any fine or

5-8  penalty imposed pursuant to subsection 2, the Commission shall

5-9  deposit the money collected from the imposition of fines with the

5-10  State Treasurer for credit to the State General Fund. If the money

5-11  is so deposited, the Commission may present a claim to the State

5-12  Board of Examiners for recommendation to the Interim Finance

5-13  Committee if money is required to pay attorney’s fees or the costs

5-14  of an investigation, or both.

5-15      Sec. 15.  1.  The Commission shall render a decision on a

5-16  complaint within 20 days after the final hearing thereon.

5-17      2.  The Commission shall notify all parties to the complaint of

5-18  its decision in writing by certified mail, return receipt requested.

5-19      Sec. 16.  1.  If the Commission determines, after notice and

5-20  hearing, that:

5-21      (a) Any person has violated a provision of this chapter, the

5-22  Commission may:

5-23          (1) Issue an order to cease and desist from engaging in

5-24  such conduct;

5-25          (2) Issue an order to take affirmative action to correct

5-26  conditions resulting from the unlawful conduct;

5-27          (3) Impose a fine of not more than $5,000 for each

5-28  violation; or

5-29          (4) Take any combination of the actions authorized by

5-30  subparagraphs (1), (2) and (3).

5-31      (b) A member or officer of an executive board of an

5-32  association has knowingly and willfully violated a provision of this

5-33  chapter, the Commission may remove him from his office if it

5-34  determines that the removal is in the best interest of the

5-35  association.

5-36      2.  If the Commission takes any disciplinary action pursuant

5-37  to subsection 1, it may recover from the person against whom

5-38  the action is taken the costs of the proceedings incurred by the

5-39  Commission, including, without limitation, the cost of the

5-40  investigation and reasonable attorney’s fees.

5-41      Sec. 17.  1.  If the Commission determines that any person

5-42  has violated or will violate a provision of this chapter, the

5-43  Commission may bring an action in the district court for the

5-44  county in which the person resides or, if the person does not reside

5-45  in this state, in any court of competent jurisdiction in this state, to

6-1  enjoin him from engaging in the violation or from doing any act

6-2  in furtherance of the violation.

6-3  2.  The action must be brought in the name of the State of

6-4  Nevada.

6-5  3.  An injunction:

6-6  (a) May be issued without proof of actual damage sustained by

6-7  any person.

6-8  (b) Does not prevent the criminal prosecution and punishment

6-9  of a person who violates the provisions of this chapter.

6-10      Sec. 18.  If a matter governed by this chapter is also governed

6-11  by chapter 82 of NRS and there is a conflict between the

6-12  provisions of this chapter and the provisions of chapter 82 of NRS,

6-13  the provisions of this chapter prevail.

6-14      Sec. 19.  In conducting any meetings, a rural agricultural

6-15  residential common-interest community must comply with the

6-16  provisions set forth in chapter 241 of NRS concerning open

6-17  meetings which are generally applicable to public bodies.

6-18      Sec. 20.  An application for a certificate to act as a

6-19  community manager must:

6-20      1.  Include the social security number of the applicant; and

6-21      2.  Be accompanied by the statement required pursuant to

6-22  section 21 of this act.

6-23      Sec. 21.  1.  An applicant for a certificate to act as a

6-24  community manager must submit to the Division the statement

6-25  prescribed by the Welfare Division of the Department of Human

6-26  Resources pursuant to NRS 425.520. The statement must be

6-27  completed and signed by the applicant.

6-28      2.  The Division shall include the statement required pursuant

6-29  to subsection 1 in:

6-30      (a) The application or any other forms that must be submitted

6-31  for the issuance of the certificate; or

6-32      (b) A separate form prescribed by the Division.

6-33      3.  A certificate may not be issued if the applicant:

6-34      (a) Fails to submit the statement required pursuant to

6-35  subsection 1; or

6-36      (b) Indicates on the statement submitted pursuant to

6-37  subsection 1 that he is subject to a court order for the support of a

6-38  child and is not in compliance with the order or a plan approved

6-39  by the district attorney or other public agency enforcing the order

6-40  for the repayment of the amount owed pursuant to the order.

6-41      4.  If an applicant indicates on the statement submitted

6-42  pursuant to subsection 1 that he is subject to a court order for the

6-43  support of a child and is not in compliance with the order or a

6-44  plan approved by the district attorney or other public agency

6-45  enforcing the order for the repayment of the amount owed

7-1  pursuant to the order, the Division shall advise the applicant to

7-2  contact the district attorney or other public agency enforcing the

7-3  order to determine the actions that the applicant may take to

7-4  satisfy the arrearage.

7-5  Sec. 22.  1.  If the Division receives a copy of a court order

7-6  issued pursuant to NRS 425.540 that provides for the suspension

7-7  of all professional, occupational and recreational licenses,

7-8  certificates and permits issued to the holder of a certificate to act

7-9  as a community manager, the Division shall deem the certificate to

7-10  be suspended at the end of the 30th day after the date the court

7-11  order was issued unless the Division receives a letter issued to the

7-12  holder of the certificate by the district attorney or other public

7-13  agency pursuant to NRS 425.550 stating that the holder of the

7-14  certificate has complied with a subpoena or warrant or has

7-15  satisfied the arrearage pursuant to NRS 425.560.

7-16      2.  The Division shall reinstate a certificate that has been

7-17  suspended by a district court pursuant to NRS 425.540 if the

7-18  Division receives a letter issued by the district attorney or other

7-19  public agency pursuant to NRS 425.550 to the holder of the

7-20  certificate that he has complied with the subpoena or warrant or

7-21  has satisfied the arrearage pursuant to NRS 425.560.

7-22      Sec. 23.  1.  If the executive board of an association receives

7-23  a written complaint from a unit’s owner alleging that the board

7-24  has violated any provision of this chapter or any provision of the

7-25  governing documents of the association, the executive board shall,

7-26  if action is required by the board, place the subject of the

7-27  complaint on the agenda of the next regularly scheduled meeting

7-28  of the executive board.

7-29      2.  The executive board, or an authorized representative of the

7-30  association, shall, within 10 days after receiving such a complaint,

7-31  acknowledge the receipt of the complaint and notify the unit’s

7-32  owner that, if action is required by the board, the subject of the

7-33  complaint will be placed on the agenda of the next regularly

7-34  scheduled meeting of the executive board.

7-35      Sec. 24.  An officer or member of the executive board of an

7-36  association or a person engaged in the management of a common-

7-37  interest community shall not solicit or accept any form of

7-38  compensation, gratuity or other remuneration that would

7-39  improperly influence or would appear to a reasonable person to

7-40  influence improperly the decisions made by those persons, or

7-41  would result or would appear to a reasonable person to result in a

7-42  conflict of interest.

7-43      Sec. 25.  A member of an executive board of an association

7-44  shall not take any retaliatory action against a unit’s owner

7-45  because the unit’s owner has:

8-1  1.  Complained in good faith about any alleged violation of

8-2  this chapter or the governing documents of the association; or

8-3  2.  Requested in good faith to review the books, records and

8-4  papers of the association.

8-5  Sec. 26.  1.  An officer or a member of the executive board

8-6  of an association shall not:

8-7  (a) On or after October 1, 2003, enter into a contract or renew

8-8  a contract with the association to provide goods or services to the

8-9  association; or

8-10      (b) Otherwise accept any commission, personal profit or

8-11  compensation of any kind from the association for providing

8-12  goods or services to the association.

8-13      2.  Except as otherwise provided in NRS 116.3105, the

8-14  provisions of this section do not prohibit:

8-15      (a) The payment of a salary or other income to an officer or a

8-16  member of an executive board of an association for acting in his

8-17  official capacity.

8-18      (b) A declarant from entering into a contract with an

8-19  association or the payment of any consideration to the declarant

8-20  for any goods or services furnished by the declarant to the

8-21  association.

8-22      (c) The declarant from serving as an officer or a member of

8-23  the executive board of the association.

8-24      3.  As used in this section, “declarant” includes any agent,

8-25  employee or affiliate of a declarant.

8-26      Sec. 27.  1.  Notwithstanding any other provision of this

8-27  chapter, in a common-interest community that has at least 2,000

8-28  units, some or all the authority of the members of a master

8-29  association may be exercised by delegates, including, without

8-30  limitation, the voting rights of the members of the master

8-31  association, if the declaration so provides.

8-32      2.  For the purpose of determining whether a common-

8-33  interest community has at least 2,000 units, units that a declarant

8-34  has reserved the right to create pursuant to NRS 116.2105 and for

8-35  which developmental rights exist must be included.

8-36      Sec. 28.  1.  If a common-interest community is developed in

8-37  separate phases and the declarant, including a successor declarant

8-38  who does not control the association established by the initial

8-39  declarant, is constructing any common elements that will be added

8-40  to the association’s common elements, the declarant is responsible

8-41  for:

8-42      (a) Paying all expenses related to the common elements which

8-43  are incurred before the conveyance of the common elements to the

8-44  association; and

9-1  (b) Except as otherwise provided in NRS 116.31038, delivering

9-2  to the association the declarant’s share of the amount specified in

9-3  the study of reserves completed pursuant to subsection 2.

9-4  2.  Before conveying the common elements to the association,

9-5  the declarant shall deliver to the association a study of the reserves

9-6  for the additional common elements which satisfies the

9-7  requirements of NRS 116.31152.

9-8  Sec. 29.  1.  Except as otherwise provided in subsection 2, in

9-9  a county whose population is 400,000 or more, a person who

9-10  owns, or directly or indirectly has an interest in, one or more units

9-11  within a planned community that are restricted to residential use

9-12  by the declaration, may use that unit or one of those units for a

9-13  transient commercial use only if:

9-14      (a) The governing documents of the association and any

9-15  master association do not prohibit such use; and

9-16      (b) Persons entitled to cast at least a majority of the votes in

9-17  the association and any master association approve the transient

9-18  commercial use of the unit.

9-19      2.  A declarant who owns, or directly or indirectly has an

9-20  interest in, one or more units within a planned community under

9-21  the governing documents of the association that are restricted to

9-22  residential use by the declaration, may not use that unit or one of

9-23  those units for a transient commercial use.

9-24      3.  The association and any master association may establish

9-25  requirements for such use pursuant to subsection 1, including the

9-26  payment of additional fees that are related to any increase in

9-27  services or other costs associated with the transient commercial

9-28  use of the unit.

9-29      4.  As used in this section:

9-30      (a) “Remuneration” means any compensation, money, rent or

9-31  other valuable consideration given in return for the occupancy,

9-32  possession or use of a unit.

9-33      (b) “Transient commercial use” means the use of a unit, for

9-34  remuneration, as a hostel, hotel, inn, motel, resort, vacation rental

9-35  or other form of transient lodging if the term of the occupancy,

9-36  possession or use of the unit is for less than 30 consecutive

9-37  calendar days.

9-38      Sec. 30.  The executive board of a master association of any

9-39  common-interest community that was created before January 1,

9-40  1975, and is located in a county whose population is 400,000 or

9-41  more may record an amendment to the declaration pursuant to

9-42  which the master association reallocates the costs of administering

9-43  the common elements of the master association among the units of

9-44  the common-interest community uniformly and based upon the

9-45  actual costs associated with each unit.

10-1      Sec. 31.  Notwithstanding any other provision of this chapter,

10-2  if a declaration, any recorded instrument related to a common-

10-3  interest community or any contract to which an association is a

10-4  party provides for the imposition of an assessment, fine, penalty or

10-5  other charge for any failure to adhere to a schedule for the

10-6  completion of the design, commencement of the construction or

10-7  completion of the construction of a unit or an improvement within

10-8  the unit, or for the issuance of any necessary permit for the

10-9  occupancy of the unit or the use of the improvement, the

10-10  assessment, fine, penalty or other charge is enforceable if that

10-11  schedule and the maximum amount of the assessment, fine,

10-12  penalty or other charge are set forth in the declaration, recorded

10-13  instrument or contract.

10-14     Sec. 32.  NRS 116.1103 is hereby amended to read as follows:

10-15     116.1103  [In] As used in the declaration and bylaws [(NRS

10-16  116.3106), unless specifically provided otherwise or] of an

10-17  association and in this chapter, unless the context otherwise

10-18  requires, [and in this chapter,] the words and terms defined in NRS

10-19  116.110305 to 116.110393, inclusive, and sections 2 to 7, inclusive,

10-20  of this act have the meanings ascribed to them in those sections.

10-21     Sec. 33.  NRS 116.110305 is hereby amended to read as

10-22  follows:

10-23     116.110305  “Administrator” means the Administrator of the

10-24  [Real Estate Division of the Department of Business and Industry.]

10-25  Division.

10-26     Sec. 34.  NRS 116.11145 is hereby amended to read as

10-27  follows:

10-28     116.11145  1.  To carry out the purposes of this chapter, the

10-29  Real Estate Commission, or any member thereof[,] acting on

10-30  behalf of the Real Estate Commission, may issue subpoenas to

10-31  compel the attendance of witnesses and the production of books,

10-32  records and other papers.

10-33     2.  If any person fails to comply with a subpoena issued by the

10-34  Real Estate Commission pursuant to this section , [within 10 days

10-35  after its issuance,] the Real Estate Commission may petition the

10-36  district court for an order of the court compelling compliance with

10-37  the subpoena.

10-38     3.  Upon such a petition, the court shall enter an order directing

10-39  the person subpoenaed to appear before the court at a time and place

10-40  to be fixed by the court in its order, the time to be not more than 10

10-41  days after the [date] service of the order, and to show cause why he

10-42  has not complied with the subpoena. A certified copy must be

10-43  served upon the person subpoenaed.

10-44     4.  If it appears to the court that the subpoena was regularly

10-45  issued by the Real Estate Commission, the court shall enter an order

11-1  compelling compliance with the subpoena, and upon failure to obey

11-2  the order , the person shall be dealt with as for contempt of court.

11-3      Sec. 35.  NRS 116.1116 is hereby amended to read as follows:

11-4      116.1116  1.  The Office of the Ombudsman for Owners in

11-5  Common-Interest Communities is hereby created within the [Real

11-6  Estate Division of the Department of Business and Industry.]

11-7  Division.

11-8      2.  The Administrator shall appoint the Ombudsman for Owners

11-9  in Common-Interest Communities. The Ombudsman for Owners in

11-10  Common-Interest Communities is in the unclassified service of the

11-11  State.

11-12     3.  The Ombudsman for Owners in Common-Interest

11-13  Communities must be qualified by training and experience to

11-14  perform the duties and functions of his office.

11-15     4.  The Ombudsman for Owners in Common-Interest

11-16  Communities shall:

11-17     (a) Assist in processing claims submitted to mediation or

11-18  arbitration pursuant to NRS 38.300 to 38.360, inclusive;

11-19     (b) Assist owners in common-interest communities to

11-20  understand their rights and responsibilities as set forth in this

11-21  chapter and the governing documents of their associations,

11-22  including, without limitation, publishing materials related to those

11-23  rights and responsibilities;

11-24     (c) Assist persons appointed or elected to serve [on] as officers

11-25  or members of executive boards of associations to carry out their

11-26  duties; [and]

11-27     (d) Assist in resolving complaints filed with the Office of the

11-28  Ombudsman or the Division alleging a violation of the provisions

11-29  of this chapter or the governing documents of an association; and

11-30     (e) Compile and maintain a registration of each association

11-31  organized within the State which includes, without limitation:

11-32         (1) The name, address and telephone number of the

11-33  association;

11-34         (2) The name of the person engaged in [property

11-35  management for] the management of the common-interest

11-36  community or the name of the person who manages the property at

11-37  the site of the common-interest community;

11-38         (3) The names, mailing addresses and telephone numbers of

11-39  the members of the executive board of the association;

11-40         (4) The name of the declarant;

11-41         (5) The number of units in the common-interest community;

11-42  [and]

11-43         (6) The total annual assessment made by the association[.] ;

11-44         (7) The number of liens foreclosed on units within the

11-45  common-interest community for the failure to pay assessments

12-1  levied against those units or fines imposed against units’ owners;

12-2  and

12-3          (8) Whether a study of the reserves of the association exists

12-4  and, if so, the date on which it was completed.

12-5      Sec. 36.  NRS 116.1117 is hereby amended to read as follows:

12-6      116.1117  1.  There is hereby created the Account for [the

12-7  Ombudsman for Owners in] Common-Interest Communities in the

12-8  State General Fund. The Account must be administered by the

12-9  Administrator.

12-10     2.  The fees collected pursuant to NRS 116.31155 must be

12-11  credited to the Account.

12-12     3.  The interest and income earned on the money in the

12-13  Account, after deducting any applicable charges, must be credited to

12-14  the Account.

12-15     4.  The money in the Account must be used solely to [defray] :

12-16     (a) Defray the costs and expenses of administering the Office of

12-17  the Ombudsman for Owners in Common-Interest Communities ;

12-18  and [for the payment of fees for a mediator or an arbitrator pursuant

12-19  to NRS 38.330.]

12-20     (b) Subsidize proceedings for mediation and arbitration

12-21  conducted pursuant to NRS 38.300 to 38.360, inclusive.

12-22     Sec. 37.  NRS 116.1201 is hereby amended to read as follows:

12-23     116.1201  1.  Except as otherwise provided in this section and

12-24  NRS 116.1203, this chapter applies to all common-interest

12-25  communities created within this state.

12-26     2.  This chapter does not apply to:

12-27     (a) Associations created for the limited purpose of maintaining:

12-28         (1) The landscape of the common elements of a common-

12-29  interest community;

12-30         (2) Facilities for flood control; or

12-31         (3) A rural agricultural residential common-interest

12-32  community.

12-33     (b) A planned community in which all units are restricted

12-34  exclusively to nonresidential use unless the declaration provides that

12-35  [the] this chapter does apply to that planned community. This

12-36  chapter applies to a planned community containing both units that

12-37  are restricted exclusively to nonresidential use and other units that

12-38  are not so restricted[,] only if the declaration so provides or if the

12-39  real estate comprising the units that may be used for residential

12-40  purposes would be a planned community in the absence of the units

12-41  that may not be used for residential purposes.

12-42     (c) Common-interest communities or units located outside of

12-43  this state, but the provisions of NRS 116.4102 to 116.4108,

12-44  inclusive, apply to all contracts for the disposition thereof signed in

13-1  this state by any party unless exempt under subsection 2 of

13-2  NRS 116.4101.

13-3      (d) A common-interest community that was created before

13-4  January 1, 1992, is located in a county whose population is less

13-5  than 50,000, and has less than 50 percent of the units within the

13-6  community put to residential use, unless a majority of the units’

13-7  owners otherwise elect in writing.

13-8      (e) Except as otherwise provided in this chapter, time shares

13-9  governed by the provisions of chapter 119A of NRS.

13-10     3.  The provisions of this chapter do not:

13-11     (a) Prohibit a common-interest community created before

13-12  January 1, 1992, from providing for separate classes of voting for

13-13  the units’ owners of the association;

13-14     (b) Require a common-interest community created before

13-15  January 1, 1992, to comply with the provisions of NRS 116.2101 to

13-16  116.2122, inclusive;

13-17     (c) Invalidate any assessments that were imposed on or before

13-18  October 1, 1999, by a common-interest community created before

13-19  January 1, 1992; or

13-20     (d) Prohibit a common-interest community created before

13-21  [January 1, 1992,] October 1, 1999, from providing for a

13-22  representative form of government.

13-23     4.  The provisions of chapters 117 and 278A of NRS do not

13-24  apply to common-interest communities.

13-25     5.  For the purposes of this section, the Administrator shall

13-26  establish, by regulation, the criteria for determining whether an

13-27  association is created for the limited purpose of maintaining the

13-28  landscape of the common elements of a common-interest

13-29  community, maintaining facilities for flood control or maintaining a

13-30  rural agricultural residential common-interest community.

13-31     Sec. 38.  NRS 116.1206 is hereby amended to read as follows:

13-32     116.1206  1.  Any provision contained in a declaration, bylaw

13-33  or other governing document of a common-interest community

13-34  [created before January 1, 1992,] in effect on October 1, 2003, that

13-35  does not conform to the provisions of this chapter [shall] :

13-36     (a) Shall be deemed to conform with those provisions by

13-37  operation of law[, and any such declaration, bylaw or other

13-38  governing document is not required to be amended to conform to

13-39  those provisions.] ; and

13-40     (b) May be changed to conform to those provisions and may be

13-41  so changed by a vote of the executive board of the association

13-42  without compliance with the procedural requirements generally

13-43  applicable to the adoption of an amendment to the declaration,

13-44  bylaws or other governing document.

14-1      2.  In the case of amendments to the declaration, bylaws or plats

14-2  and plans of any common-interest community created before

14-3  January 1, 1992:

14-4      (a) If the result accomplished by the amendment was permitted

14-5  by law before January 1, 1992, the amendment may be made either

14-6  in accordance with that law, in which case that law applies to that

14-7  amendment, or it may be made under this chapter; and

14-8      (b) If the result accomplished by the amendment is permitted by

14-9  this chapter, and was not permitted by law before January 1, 1992,

14-10  the amendment may be made under this chapter.

14-11     3.  An amendment to the declaration, bylaws or plats and plans

14-12  authorized by this section to be made under this chapter must be

14-13  adopted in conformity with the applicable provisions of chapter 117

14-14  or 278A of NRS and with the procedures and requirements specified

14-15  by those instruments. If an amendment grants to any person any

14-16  rights, powers or privileges permitted by this chapter, all correlative

14-17  obligations, liabilities and restrictions in this chapter also apply to

14-18  that person.

14-19     Sec. 39.  NRS 116.2103 is hereby amended to read as follows:

14-20     116.2103  1.  [All provisions of the declaration and bylaws are

14-21  severable.] The inclusion in a governing document of an

14-22  association of a provision that violates any provision of this

14-23  chapter does not render any other provision of the governing

14-24  document invalid or otherwise unenforceable if the other

14-25  provisions can be given effect in accordance with their original

14-26  intent and the provisions of this chapter.

14-27     2.  The rule against perpetuities and NRS 111.103 to 111.1039,

14-28  inclusive, do not apply to defeat any provision of the declaration,

14-29  bylaws, rules or regulations adopted pursuant to NRS 116.3102.

14-30     3.  In the event of a conflict between the provisions of the

14-31  declaration and the bylaws, the declaration prevails except to the

14-32  extent the declaration is inconsistent with this chapter.

14-33     4.  Title to a unit and common elements is not rendered

14-34  unmarketable or otherwise affected by reason of an insubstantial

14-35  failure of the declaration to comply with this chapter. Whether a

14-36  substantial failure impairs marketability is not affected by this

14-37  chapter.

14-38     Sec. 40.  NRS 116.2105 is hereby amended to read as follows:

14-39     116.2105  1.  The declaration must contain:

14-40     (a) The names of the common-interest community and the

14-41  association and a statement that the common-interest community is

14-42  either a condominium, cooperative or planned community;

14-43     (b) The name of every county in which any part of the common-

14-44  interest community is situated;

15-1      (c) A sufficient description of the real estate included in the

15-2  common-interest community;

15-3      (d) A statement of the maximum number of units that the

15-4  declarant reserves the right to create;

15-5      (e) In a condominium or planned community, a description of

15-6  the boundaries of each unit created by the declaration, including the

15-7  unit’s identifying number or, in a cooperative, a description, which

15-8  may be by plats or plans, of each unit created by the declaration,

15-9  including the unit’s identifying number, its size or number of rooms,

15-10  and its location within a building if it is within a building containing

15-11  more than one unit;

15-12     (f) A description of any limited common elements, other than

15-13  those specified in subsections 2 and 4 of NRS 116.2102, as provided

15-14  in paragraph (g) of subsection 2 of NRS 116.2109 and, in a planned

15-15  community, any real estate that is or must become common

15-16  elements;

15-17     (g) A description of any real estate, except real estate subject to

15-18  developmental rights, that may be allocated subsequently as limited

15-19  common elements, other than limited common elements specified in

15-20  subsections 2 and 4 of NRS 116.2102, together with a statement that

15-21  they may be so allocated;

15-22     (h) A description of any developmental rights [(NRS

15-23  116.11034)] and other special declarant’s rights [(NRS

15-24  116.110385)] reserved by the declarant, together with a legally

15-25  sufficient description of the real estate to which each of those rights

15-26  applies[,] and a time within which each of those rights must be

15-27  exercised;

15-28     (i) If any developmental right may be exercised with respect to

15-29  different parcels of real estate at different times, a statement to that

15-30  effect together with:

15-31         (1) Either a statement fixing the boundaries of those portions

15-32  and regulating the order in which those portions may be subjected to

15-33  the exercise of each developmental right or a statement that no

15-34  assurances are made in those regards; and

15-35         (2) A statement whether, if any developmental right is

15-36  exercised in any portion of the real estate subject to that

15-37  developmental right, that developmental right must be exercised in

15-38  all or in any other portion of the remainder of that real estate;

15-39     (j) Any other conditions or limitations under which the rights

15-40  described in paragraph (h) may be exercised or will lapse;

15-41     (k) An allocation to each unit of the allocated interests in the

15-42  manner described in NRS 116.2107[;] and a statement of whether

15-43  voting by delegates is required or permitted pursuant to section 27

15-44  of this act;

15-45     (l) Any restrictions:

16-1          (1) On use, occupancy and alienation of the units; and

16-2          (2) On the amount for which a unit may be sold or on the

16-3  amount that may be received by a unit’s owner on sale,

16-4  condemnation or casualty to the unit or to the common-interest

16-5  community, or on termination of the common-interest community;

16-6      (m) The file number and book or other information to show

16-7  where easements and licenses are recorded appurtenant to or

16-8  included in the common-interest community or to which any portion

16-9  of the common-interest community is or may become subject by

16-10  virtue of a reservation in the declaration; and

16-11     (n) All matters required by NRS 116.2106 to 116.2109,

16-12  inclusive, 116.2115 , [and] 116.2116 and 116.31032.

16-13     2.  The declaration may contain any other matters the declarant

16-14  considers appropriate.

16-15     Sec. 41.  NRS 116.2111 is hereby amended to read as follows:

16-16     116.2111  [Subject]

16-17     1.  Except as otherwise provided in this section and subject to

16-18  the provisions of the declaration and other provisions of law, a

16-19  unit’s owner:

16-20     [1.] (a) May make any improvements or alterations to his unit

16-21  that do not impair the structural integrity or mechanical systems or

16-22  lessen the support of any portion of the common-interest

16-23  community;

16-24     [2.] (b) May not change the appearance of the common

16-25  elements, or the exterior appearance of a unit or any other portion of

16-26  the common-interest community, without permission of the

16-27  association; and

16-28     [3.] (c) After acquiring an adjoining unit or an adjoining part of

16-29  an adjoining unit, may remove or alter any intervening partition or

16-30  create apertures therein, even if the partition in whole or in part is a

16-31  common element, if those acts do not impair the structural integrity

16-32  or mechanical systems or lessen the support of any portion of the

16-33  common-interest community. Removal of partitions or creation of

16-34  apertures under this [subsection] paragraph is not an alteration of

16-35  boundaries.

16-36     2.  An association may not:

16-37     (a) Require the removal of any structure, fixture or other

16-38  improvement made to a unit if it was approved by the association

16-39  in writing before it was installed or constructed in accordance with

16-40  the procedures set forth in the governing documents of the

16-41  association.

16-42     (b) Unreasonably restrict, prohibit or otherwise impede the

16-43  lawful rights of a unit’s owner to have reasonable access to his

16-44  unit.

17-1      (c) Unreasonably restrict, prohibit or withhold approval for a

17-2  unit’s owner to add to a unit:

17-3          (1) An apparatus required for the use of solar energy;

17-4          (2) Improvements such as ramps, railings or elevators that

17-5  are necessary or desirable to increase the unit’s owner’s access to

17-6  his unit if an occupant of the unit is disabled; or

17-7          (3) Shutters or additional locks that are desirable to

17-8  decrease the cost of electrical energy or to make a unit’s owner

17-9  feel safe in his unit.

17-10     3.  Any improvement or alteration made pursuant to

17-11  subsection 2 that is visible from any other portion of the common-

17-12  interest community must be installed, constructed or added in

17-13  accordance with the procedures set forth in the governing

17-14  documents of the association and must be selected or designed to

17-15  the maximum extent practicable to be compatible with the style of

17-16  the common-interest community.

17-17     Sec. 42.  NRS 116.31031 is hereby amended to read as

17-18  follows:

17-19     116.31031  1.  If a unit’s owner, or a tenant or guest of a unit’s

17-20  owner, does not comply with a provision of the governing

17-21  documents of an association, the executive board of the association

17-22  may, if the governing documents so provide:

17-23     (a) Prohibit, for a reasonable time, the unit’s owner, or the

17-24  tenant or guest of the unit’s owner, from:

17-25         (1) Voting on matters related to the common-interest

17-26  community.

17-27         (2) Using the common elements. The provisions of this

17-28  subparagraph do not prohibit the unit’s owner, or the tenant or guest

17-29  of the unit’s owner, from using any vehicular or pedestrian ingress

17-30  or egress to go to or from the unit, including any area used for

17-31  parking.

17-32     (b) Require the unit’s owner, or the tenant or guest of the unit’s

17-33  owner, to pay a fine for each failure to comply . [that does not

17-34  threaten the health and welfare of the common-interest community.]

17-35  The fine must be commensurate with the severity of the violation . [,

17-36  but] If the failure to comply does not threaten the health, safety or

17-37  welfare of the common-interest community, the fine must not

17-38  exceed $100 for each violation . [or a total amount of $500,

17-39  whichever is less.]

17-40     2.  If a fine is imposed pursuant to subsection 1 and the

17-41  violation is not cured within 14 days or a longer period as may be

17-42  established by the executive board, the violation shall be deemed a

17-43  continuing violation. Thereafter, the executive board may impose an

17-44  additional fine for the violation for each 7‑day period or portion

17-45  thereof that the violation is not cured[.] , but in no event may the

18-1  cumulative total amount of the additional fine exceed $1,000 per

18-2  calendar year for each continuing violation. Any additional fine

18-3  for each continuing violation may be imposed without notice and

18-4  an opportunity to be heard.

18-5      3.  Except as otherwise provided in subsection 2, the imposition

18-6  of a fine pursuant to this section must comply with the requirements

18-7  of subsection 6 of NRS 116.31065.

18-8      Sec. 43.  NRS 116.31034 is hereby amended to read as

18-9  follows:

18-10     116.31034  1.  Except as otherwise provided in subsection 5 of

18-11  NRS 116.212, not later than the termination of any period of

18-12  declarant’s control, the units’ owners shall elect an executive board

18-13  of at least three members, at least a majority of whom must be units’

18-14  owners. The executive board shall elect the officers. The members

18-15  and officers of the executive board shall take office upon election.

18-16     2.  The term of office of a member of the executive board may

18-17  not exceed 2 years. A member of the executive board may be

18-18  elected to succeed himself. The governing documents of the

18-19  association must [set] :

18-20     (a) Set forth the month during which elections for the members

18-21  of the executive board must be held after the termination of any

18-22  period of the declarant’s control.

18-23     (b) Provide for terms of office that are staggered. The

18-24  provisions of this paragraph do not apply to members of the

18-25  executive board appointed by the declarant.

18-26     3.  Not less than 30 days before the preparation of a ballot for

18-27  the election of members of the executive board, the secretary or

18-28  other officer specified in the bylaws of the association shall cause

18-29  notice to be given to each unit’s owner of his eligibility to serve as a

18-30  member of the executive board. Each unit’s owner who is qualified

18-31  to serve as a member of the executive board may have his name

18-32  placed on the ballot along with the names of the nominees selected

18-33  by the members of the executive board or a nominating committee

18-34  established by the association.

18-35     4.  A person may not be an officer or member of the executive

18-36  board if he or any member of his immediate family engages in the

18-37  management of the common-interest community.

18-38     5.  An officer, employee, agent or director of a corporate owner

18-39  of a unit, a trustee or designated beneficiary of a trust that owns a

18-40  unit, a partner of a partnership that owns a unit, a member or

18-41  manager of a limited-liability company that owns a unit, and a

18-42  fiduciary of an estate that owns a unit may be an officer or member

18-43  of the executive board. In all events where the person serving or

18-44  offering to serve as an officer or member of the executive board is

19-1  not the record owner, he shall file proof in the records of the

19-2  association that:

19-3      (a) He is associated with the corporate owner, trust, partnership ,

19-4  limited-liability company or estate as required by this subsection;

19-5  and

19-6      (b) Identifies the unit or units owned by the corporate owner,

19-7  trust, partnership , limited-liability company or estate.

19-8      [5.  The]

19-9      6.  Except as otherwise provided in section 27 of this act, the

19-10  election of any member of the executive board must be conducted

19-11  by secret written ballot. The secretary or other officer specified in

19-12  the bylaws of the association shall cause to be sent , prepaid by

19-13  United States mail to the mailing address of each unit within the

19-14  common-interest community or to any other mailing address

19-15  designated in writing by the unit’s owner, a secret ballot and a return

19-16  envelope.

19-17     [6.] 7. Each member of the executive board shall, within 30

19-18  days after his appointment or election, certify in writing that he has

19-19  read and understands the governing documents of the association

19-20  and the provisions of this chapter to the best of his ability.

19-21     Sec. 44.  NRS 116.31036 is hereby amended to read as

19-22  follows:

19-23     116.31036  1.  Notwithstanding any provision of the

19-24  declaration or bylaws to the contrary, the units’ owners, by a two-

19-25  thirds vote of all persons [present and] entitled to vote at any

19-26  meeting of the units’ owners at which a quorum is present, may

19-27  remove any member of the executive board with or without cause,

19-28  other than a member appointed by the declarant.

19-29     2.  The removal of any member of the executive board must be

19-30  conducted by secret written ballot. The secretary or other officer

19-31  specified in the bylaws of the association shall cause to be sent,

19-32  prepaid by United States mail to the mailing address of each unit

19-33  within the common-interest community or to any other mailing

19-34  address designated in writing by the unit’s owner, a secret ballot

19-35  and a return envelope.

19-36     3.  If a member of an executive board is sued for liability for

19-37  actions undertaken in his role as a member of the board, the

19-38  association shall indemnify him for his losses or claims, and

19-39  undertake all costs of defense, unless it is proven that he acted with

19-40  willful or wanton misfeasance or with gross negligence. After such

19-41  proof , the association is no longer liable for the cost of defense, and

19-42  may recover costs already expended from the member of the

19-43  executive board who so acted. Members of the executive board are

19-44  not personally liable to the victims of crimes occurring on the

19-45  property. Punitive damages may not be recovered against the

20-1  association, but may be recovered from persons whose activity gave

20-2  rise to the damages.

20-3      4.  The provisions of this section do not prohibit the

20-4  Commission from taking any disciplinary action against a member

20-5  of an executive board pursuant to section 16 or 17 of this act.

20-6      Sec. 45.  NRS 116.3106 is hereby amended to read as follows:

20-7      116.3106  1.  The bylaws of the association must provide:

20-8      (a) The number of members of the executive board and the titles

20-9  of the officers of the association;

20-10     (b) For election by the executive board of a president, treasurer,

20-11  secretary and any other officers of the association the bylaws

20-12  specify;

20-13     (c) The qualifications, powers and duties, terms of office and

20-14  manner of electing and removing officers of the association and

20-15  members of the executive board and filling vacancies;

20-16     (d) Which, if any, of its powers the executive board or officers

20-17  may delegate to other persons or to a [managing agent;] person

20-18  engaged in the management of a common-interest community;

20-19     (e) Which of its officers may prepare, execute, certify and

20-20  record amendments to the declaration on behalf of the association;

20-21     (f) Procedural rules for conducting meetings of the association;

20-22  [and]

20-23     (g) A method for amending the bylaws[.] ; and

20-24     (h) Procedural rules for conducting elections.

20-25     2.  Except as otherwise provided in the declaration, the bylaws

20-26  may provide for any other matters the association deems necessary

20-27  and appropriate.

20-28     3.  The bylaws must be written in plain English.

20-29     Sec. 46.  NRS 116.31065 is hereby amended to read as

20-30  follows:

20-31     116.31065  The rules adopted by an association:

20-32     1.  Must be reasonably related to the purpose for which they are

20-33  adopted.

20-34     2.  Must be sufficiently explicit in their prohibition, direction or

20-35  limitation to inform a unit’s owner, or a tenant or guest of a unit’s

20-36  owner, of any action or omission required for compliance.

20-37     3.  Must not be adopted to evade any obligation of the

20-38  association.

20-39     4.  Must be consistent with the governing documents of

20-40  the association and must not arbitrarily restrict conduct or require

20-41  the construction of any capital improvement by a unit’s owner that

20-42  is not required by the governing documents of the association.

20-43     5.  Must be uniformly enforced under the same or similar

20-44  circumstances against all units’ owners. [Any rule that is not so

20-45  uniformly enforced may not be enforced against any unit’s owner.]

21-1      6.  May be enforced by the assessment of a fine only if:

21-2      (a) The [person alleged to have violated the rule has received

21-3  notice of the alleged violation that informs him of his opportunity to

21-4  request a hearing on the alleged violation.] association has given

21-5  written notice by regular mail to the unit’s owner that:

21-6          (1) Sets forth the alleged violation and any required

21-7  corrective action; and

21-8          (2) Includes a statement that he is entitled to a hearing on

21-9  the alleged violation before the imposition of the fine;

21-10     (b) The person alleged to have violated the rule is afforded an

21-11  opportunity to cure the alleged violation before the imposition of

21-12  the fine; and

21-13     (c) At least 30 days before the alleged violation, the [person

21-14  alleged to have violated the rule] unit’s owner was given written

21-15  notice of the rule or any amendment to the rule.

21-16     Sec. 47.  NRS 116.31083 is hereby amended to read as

21-17  follows:

21-18     116.31083  1.  A meeting of the executive board of an

21-19  association must be held at least once every 90 days.

21-20     2.  Except in an emergency or unless the bylaws of an

21-21  association require a longer period of notice, the secretary or other

21-22  officer specified in the bylaws of the association shall, not less than

21-23  10 days before the date of a meeting of the executive board, cause

21-24  notice of the meeting to be given to the units’ owners. Such notice

21-25  must be:

21-26     (a) Sent prepaid by United States mail to the mailing address of

21-27  each unit within the common-interest community or to any other

21-28  mailing address designated in writing by the unit’s owner;

21-29     (b) If the association offers to send notice by electronic mail,

21-30  sent by electronic mail at the request of the unit’s owner to an

21-31  electronic mail address designated in writing by the unit’s owner; or

21-32     (c) Published in a newsletter or other similar publication that is

21-33  circulated to each unit’s owner.

21-34     3.  In an emergency, the secretary or other officer specified in

21-35  the bylaws of the association shall, if practicable, cause notice of the

21-36  meeting to be sent prepaid by United States mail to the mailing

21-37  address of each unit within the common-interest community. If

21-38  delivery of the notice in this manner is impracticable, the notice

21-39  must be hand-delivered to each unit within the common-interest

21-40  community or posted in a prominent place or places within the

21-41  common elements of the association.

21-42     4.  The notice of a meeting of the executive board of an

21-43  association must state the time and place of the meeting and include

21-44  a copy of the agenda for the meeting or the date on which and the

21-45  locations where copies of the agenda may be conveniently obtained

22-1  by the units’ owners of the association. The notice must include

22-2  notification of the right of a unit’s owner to:

22-3      (a) Have a copy of the minutes or a summary of the minutes of

22-4  the meeting distributed to him upon request and, if required by the

22-5  executive board, upon payment to the association of the cost of

22-6  making the distribution.

22-7      (b) Speak to the association or executive board, unless the

22-8  executive board is meeting in executive session.

22-9      5.  The agenda of the meeting of the executive board of an

22-10  association must comply with the provisions of subsection 3 of NRS

22-11  116.3108. The period required to be devoted to comments by units’

22-12  owners and discussion of those comments must be scheduled for the

22-13  beginning of each meeting. In an emergency, the executive board

22-14  may take action on an item which is not listed on the agenda as an

22-15  item on which action may be taken.

22-16     6.  At least once every 90 days, unless the declaration or bylaws

22-17  of the association impose more stringent standards, the executive

22-18  board shall review at one of its meetings:

22-19     (a) A current reconciliation of the operating account of the

22-20  association;

22-21     (b) A current reconciliation of the reserve account of the

22-22  association;

22-23     (c) The actual revenues and expenses for the reserve account,

22-24  compared to the budget for that account for the current year;

22-25     (d) The latest account statements prepared by the financial

22-26  institutions in which the accounts of the association are maintained;

22-27     (e) An income and expense statement, prepared on at least a

22-28  quarterly basis, for the operating and reserve accounts of the

22-29  association; and

22-30     (f) The current status of any civil action or claim submitted to

22-31  arbitration or mediation in which the association is a party.

22-32     7.  [The] Except as otherwise provided in this subsection, the

22-33  minutes of a meeting of the executive board of an association must

22-34  [be] :

22-35     (a) Include:

22-36         (1) The date, time and place of the meeting;

22-37         (2) Those members of the executive board who were present

22-38  and those members who were absent;

22-39         (3) The substance of all matters proposed, discussed or

22-40  decided and, at the request of any member of the executive board,

22-41  a record of each member’s vote on any matter decided by vote; and

22-42         (4) The substance of remarks made by any unit’s owner

22-43  who addresses the executive board if he requests that the minutes

22-44  reflect his remarks or, if he has prepared written remarks, a copy

22-45  of his prepared remarks if he submits a copy for inclusion;

23-1      (b) Be maintained by the association until the common-interest

23-2  community is terminated; and

23-3      (c) Be made available to the units’ owners in accordance with

23-4  the provisions of subsection 5 of NRS 116.3108.

23-5  The executive board of an association may establish reasonable

23-6  limitations on materials, remarks or other information to be

23-7  included in the minutes of its meetings.

23-8      8.  A unit’s owner may record on audiotape or any other

23-9  means of sound reproduction a meeting of the executive board,

23-10  unless the board is meeting in executive session, if the members of

23-11  the board and units’ owners who are in attendance are notified of

23-12  the intent of the unit’s owner to record the meeting.

23-13     9.  As used in this section, “emergency” means any occurrence

23-14  or combination of occurrences that:

23-15     (a) Could not have been reasonably foreseen;

23-16     (b) Affects the health, welfare and safety of the units’ owners of

23-17  the association;

23-18     (c) Requires the immediate attention of, and possible action by,

23-19  the executive board; and

23-20     (d) Makes it impracticable to comply with the provisions of

23-21  subsection 2 or 5.

23-22     Sec. 48.  NRS 116.31085 is hereby amended to read as

23-23  follows:

23-24     116.31085  1.  Except as otherwise provided in this section, a

23-25  unit’s owner may attend any meeting of the units’ owners of the

23-26  association or of the executive board and speak at any such meeting.

23-27  The executive board may establish reasonable limitations on the

23-28  time a unit’s owner may speak at such a meeting.

23-29     2.  An executive board may meet in executive session to:

23-30     (a) Consult with the attorney for the association on matters

23-31  relating to proposed or pending litigation if the contents of the

23-32  discussion would otherwise be governed by the privilege set forth in

23-33  NRS 49.035 to 49.115, inclusive;

23-34     (b) Discuss [matters relating to personnel;] an employee of the

23-35  association or an employee of a person engaged in the

23-36  management of the common-interest community who is working

23-37  solely for the association; or

23-38     (c) Discuss a violation of the governing documents alleged to

23-39  have been committed by a unit’s owner, including, without

23-40  limitation, the failure to pay an assessment, except as otherwise

23-41  provided in subsection 3.

23-42     3.  An executive board shall meet in executive session to hold a

23-43  hearing on an alleged violation of the governing documents unless

23-44  the [unit’s owner] person who allegedly committed the violation

23-45  requests in writing that the hearing be conducted by the executive

24-1  board at an open meeting. The [unit’s owner] person who is alleged

24-2  to have committed the violation may attend the [hearing] executive

24-3  session and testify concerning the alleged violation, but may be

24-4  excluded by the executive board from any other portion of the

24-5  [hearing,] executive session, including, without limitation, the

24-6  deliberations of the executive board.

24-7      4.  Except as otherwise provided in this subsection, any matter

24-8  discussed in executive session must be generally noted in the

24-9  minutes of the meeting of the executive board. The executive board

24-10  shall maintain minutes of any decision made pursuant to subsection

24-11  3 and, upon request, provide a copy of the decision to the [unit’s

24-12  owner] person who was the subject of the [hearing] executive

24-13  session or to his designated representative.

24-14     5.  Except as otherwise provided in subsection 3, a unit’s owner

24-15  is not entitled to attend or speak at a meeting of the executive board

24-16  held in executive session.

24-17     Sec. 49.  NRS 116.3109 is hereby amended to read as follows:

24-18     116.3109  1.  Except as otherwise provided in this section and

24-19  unless the bylaws provide otherwise, a quorum is present throughout

24-20  any meeting of the association if persons entitled to cast 20 percent

24-21  of the votes that may be cast for election of the executive board are

24-22  present in person or by proxy at the beginning of the meeting.

24-23     2.  If the governing documents of an association provide for a

24-24  quorum at a meeting of the association that is greater than 20

24-25  percent of the votes that may be cast for election of the executive

24-26  board, and such a meeting for which proper notice has been given

24-27  cannot be held because a quorum is not present, the units’ owners

24-28  in attendance, either in person or by proxy in accordance with the

24-29  governing documents of the association, may adjourn the meeting

24-30  to a time that is not less than 48 hours or more than 30 days from

24-31  the date of the meeting. At the subsequent meeting, a quorum is

24-32  present if persons entitled to cast 20 percent of the votes that may

24-33  be cast for election of the executive board are present in person or

24-34  by proxy. If fewer units’ owners than that required by the quorum

24-35  requirement contained in the governing documents are present at

24-36  the subsequent meeting in person or by proxy in accordance with

24-37  the governing documents, only those matters included on the

24-38  agenda of the original meeting may be voted upon.

24-39     3.  Unless the bylaws specify a larger percentage, a quorum is

24-40  deemed present throughout any meeting of the executive board if

24-41  persons entitled to cast 50 percent of the votes on that board are

24-42  present at the beginning of the meeting.

24-43     [3.] 4. For the purposes of [determining whether a quorum is

24-44  present for the election of] electing any member of the executive

25-1  board, a quorum is not required and only the secret written ballots

25-2  that are returned to the association may be counted.

25-3      Sec. 50.  NRS 116.311 is hereby amended to read as follows:

25-4      116.311  1.  If only one of several owners of a unit is present

25-5  at a meeting of the association, that owner is entitled to cast all the

25-6  votes allocated to that unit. If more than one of the owners are

25-7  present, the votes allocated to that unit may be cast only in

25-8  accordance with the agreement of a majority in interest of the

25-9  owners, unless the declaration expressly provides otherwise. There

25-10  is majority agreement if any one of the owners cast the votes

25-11  allocated to that unit without protest made promptly to the person

25-12  presiding over the meeting by any of the other owners of the unit.

25-13     2.  Except as otherwise provided in this section, votes allocated

25-14  to a unit may be cast pursuant to a proxy executed by a unit’s owner.

25-15  A unit’s owner may give a proxy only to a member of his immediate

25-16  family, a tenant of the unit’s owner who resides in the common-

25-17  interest community or another unit’s owner who resides in the

25-18  common-interest community. If a unit is owned by more than one

25-19  person, each owner of the unit may vote or register protest to the

25-20  casting of votes by the other owners of the unit through an executed

25-21  proxy. A unit’s owner may revoke a proxy given pursuant to this

25-22  section only by actual notice of revocation to the person presiding

25-23  over a meeting of the association. A proxy is void if:

25-24     (a) It is not dated or purports to be revocable without notice;

25-25     (b) It does not designate the votes that must be cast on behalf of

25-26  the unit’s owner who executed the proxy; or

25-27     (c) The holder of the proxy does not disclose at the beginning of

25-28  the meeting for which the proxy is executed the number of proxies

25-29  pursuant to which he will be casting votes . [and the voting

25-30  instructions received for each proxy.]

25-31  A proxy terminates immediately after the conclusion of the meeting

25-32  for which it was executed. A vote may not be cast pursuant to a

25-33  proxy for the election or removal of a member of the executive

25-34  board of an association.

25-35     3.  Only a vote cast in person, by secret ballot or by proxy, may

25-36  be counted.

25-37     4.  If the declaration requires that votes on specified matters

25-38  affecting the common-interest community be cast by lessees rather

25-39  than units’ owners of leased units:

25-40     (a) The provisions of subsections 1 and 2 apply to lessees as if

25-41  they were units’ owners;

25-42     (b) Units’ owners who have leased their units to other persons

25-43  may not cast votes on those specified matters; and

26-1      (c) Lessees are entitled to notice of meetings, access to records

26-2  [,] and other rights respecting those matters as if they were units’

26-3  owners.

26-4  Units’ owners must also be given notice, in the manner provided in

26-5  NRS 116.3108, of all meetings at which lessees are entitled to vote.

26-6      5.  No votes allocated to a unit owned by the association may

26-7  be cast.

26-8      6.  Votes cast for the election or removal of a member of the

26-9  executive board of an association must be counted in public.

26-10     Sec. 51.  NRS 116.31139 is hereby amended to read as

26-11  follows:

26-12     116.31139  1.  An association may employ a [person engaged

26-13  in property management for the common-interest community.]

26-14  community manager.

26-15     2.  Except as otherwise provided in this section, a [person

26-16  engaged in property management for a common-interest]

26-17  community manager must:

26-18     (a) Hold a permit ; [to engage in property management that is

26-19  issued pursuant to the provisions of chapter 645 of NRS;] or

26-20     (b) Hold a certificate issued by the [Real Estate Commission]

26-21  Division pursuant to subsection 3.

26-22     3.  The [Real Estate Commission] Division shall provide by

26-23  regulation for the issuance of certificates for [the management of

26-24  common-interest communities to persons] community managers

26-25  who are not otherwise authorized to engage in property management

26-26  pursuant to the provisions of chapter 645 of NRS. The regulations:

26-27     (a) Must establish the qualifications for the issuance of such a

26-28  certificate, including the education and experience required to obtain

26-29  such a certificate;

26-30     (b) May require applicants to pass an examination in order to

26-31  obtain a certificate;

26-32     (c) Must establish standards of practice for [persons engaged in

26-33  property management for a common-interest community;]

26-34  community managers;

26-35     (d) Must establish the grounds for initiating disciplinary action

26-36  against a person to whom a certificate has been issued, including,

26-37  without limitation, the grounds for placing conditions, limitations or

26-38  restrictions on a certificate and for the suspension or revocation of a

26-39  certificate; and

26-40     (e) Must establish rules of practice and procedure for conducting

26-41  disciplinary hearings.

26-42  The [Real Estate Division of the Department of Business and

26-43  Industry] Division may investigate the [property] community

26-44  managers to whom certificates have been issued to ensure their

26-45  compliance with the standards of practice adopted pursuant to this

27-1  subsection and collect a fee for the issuance of a certificate by the

27-2  [Commission] Division in an amount not to exceed the

27-3  administrative costs of issuing the certificate.

27-4      4.  The provisions of subsection 2 do not apply to:

27-5      (a) A person who is engaged in [property management for] the

27-6  management of a common-interest community on October 1,

27-7  [1999,] 2003, and is granted an exemption from the requirements of

27-8  subsection 2 by the Administrator upon demonstration that he is

27-9  qualified and competent to engage in [property management for] the

27-10  management of a common-interest community.

27-11     (b) A financial institution.

27-12     (c) An attorney licensed to practice in this state.

27-13     (d) A trustee.

27-14     (e) An employee of a corporation who manages only the

27-15  property of the corporation[.] , unless that corporation is also an

27-16  association.

27-17     (f) A declarant.

27-18     (g) A receiver.

27-19     [5.  As used in this section, “property management” means the

27-20  physical, administrative or financial maintenance and management

27-21  of real property, or the supervision of those activities for a fee,

27-22  commission or other compensation or valuable consideration.]

27-23     (h) An officer or member of the executive board of an

27-24  association who acts solely as an officer or member of the

27-25  executive board.

27-26     Sec. 52.  NRS 116.311391 is hereby amended to read as

27-27  follows:

27-28     116.311391  The expiration or revocation of a certificate [for

27-29  the management of a common-interest community] by operation of

27-30  law or by order or decision of the Real Estate Commission or a court

27-31  of competent jurisdiction, or the voluntary surrender of such a

27-32  certificate by the holder of the certificate , does not:

27-33     1.  Prohibit the [Real Estate Division of the Department of

27-34  Business and Industry] Division or Real Estate Commission from

27-35  initiating or continuing an investigation of, or action or disciplinary

27-36  proceeding against, the holder of the certificate as authorized

27-37  pursuant to the provisions of this chapter or the regulations adopted

27-38  pursuant thereto; or

27-39     2.  Prevent the imposition or collection of any fine or penalty

27-40  authorized pursuant to the provisions of this chapter or the

27-41  regulations adopted pursuant thereto against the holder of the

27-42  certificate.

27-43     Sec. 53.  NRS 116.3115 is hereby amended to read as follows:

27-44     116.3115  1.  Until the association makes an assessment for

27-45  common expenses, the declarant shall pay all common expenses.

28-1  After an assessment has been made by the association, assessments

28-2  must be made at least annually, based on a budget adopted at least

28-3  annually by the association in accordance with the requirements set

28-4  forth in NRS 116.31151. Unless the declaration imposes more

28-5  stringent standards, the budget must include a budget for the daily

28-6  operation of the association and the money for the reserve required

28-7  by paragraph (b) of subsection 2.

28-8      2.  Except for assessments under subsections 4 to 7, inclusive:

28-9      (a) All common expenses, including a reserve, must be assessed

28-10  against all the units in accordance with the allocations set forth in

28-11  the declaration pursuant to subsections 1 and 2 of NRS 116.2107.

28-12     (b) The association shall establish an adequate reserve, funded

28-13  on a reasonable basis, for the repair, replacement and restoration of

28-14  the major components of the common elements. The reserve may be

28-15  used only for those purposes, including, without limitation,

28-16  repairing, replacing and restoring roofs, roads and sidewalks, and

28-17  must not be used for daily maintenance.

28-18     3.  Any past due assessment for common expenses or

28-19  installment thereof bears interest at the rate established by the

28-20  association not exceeding 18 percent per year.

28-21     4.  To the extent required by the declaration:

28-22     (a) Any common expense associated with the maintenance,

28-23  repair, restoration or replacement of a limited common element

28-24  must be assessed against the units to which that limited common

28-25  element is assigned, equally[,] or in any other proportion the

28-26  declaration provides;

28-27     (b) Any common expense or portion thereof benefiting fewer

28-28  than all of the units must be assessed exclusively against the units

28-29  benefited; and

28-30     (c) The costs of insurance must be assessed in proportion to risk

28-31  and the costs of utilities must be assessed in proportion to usage.

28-32     5.  Assessments to pay a judgment against the association may

28-33  be made only against the units in the common-interest community at

28-34  the time the judgment was entered, in proportion to their liabilities

28-35  for common expenses.

28-36     6.  If any common expense is caused by the misconduct of any

28-37  unit’s owner, the association may assess that expense exclusively

28-38  against his unit.

28-39     7.  The association of a common‑interest community created

28-40  before January 1, 1992, is not required to make an assessment

28-41  against a vacant lot located within the community that is owned by

28-42  the declarant.

28-43     8.  If liabilities for common expenses are reallocated,

28-44  assessments for common expenses and any installment thereof not

29-1  yet due must be recalculated in accordance with the reallocated

29-2  liabilities.

29-3      9.  The association shall provide written notice to the owner of

29-4  each unit of a meeting at which an assessment for a capital

29-5  improvement or the commencement of a civil action is to be

29-6  considered or action is to be taken on such an assessment at least 21

29-7  calendar days before the meeting. Except as otherwise provided in

29-8  this subsection, the association may commence a civil action only

29-9  upon a vote or written agreement of the owners of units to which at

29-10  least a majority of the votes of the members of the association are

29-11  allocated. The provisions of this subsection do not apply to a civil

29-12  action that is commenced:

29-13     (a) To enforce the payment of an assessment;

29-14     (b) To enforce the declaration, bylaws or rules of the

29-15  association; or

29-16     (c) To proceed with a counterclaim . [; or

29-17     (d) To protect the health, safety and welfare of the members of

29-18  the association. If a civil action is commenced pursuant to this

29-19  paragraph without the required vote or agreement, the action must

29-20  be ratified within 90 days after the commencement of the action by

29-21  a vote or written agreement of the owners of the units to which at

29-22  least a majority of votes of the members of the association are

29-23  allocated. If the association, after making a good faith effort, cannot

29-24  obtain the required vote or agreement to commence or ratify such a

29-25  civil action, the association may thereafter seek to dismiss the action

29-26  without prejudice for that reason only if a vote or written agreement

29-27  of the owners of the units to which at least a majority of votes of the

29-28  members of the association are allocated was obtained at the time

29-29  the approval to commence or ratify the action was sought.]

29-30     10.  At least 10 days before an association commences [or seeks

29-31  to ratify the commencement of] a civil action, the association shall

29-32  provide a written statement to all units’ owners that includes:

29-33     (a) A reasonable estimate of the costs of the civil action,

29-34  including reasonable attorney’s fees;

29-35     (b) An explanation of the potential benefits of the civil action

29-36  and the potential adverse consequences if the association does not

29-37  commence the action or if the outcome of the action is not favorable

29-38  to the association; and

29-39     (c) All disclosures that are required to be made upon the sale of

29-40  the property.

29-41     11.  No person other than a unit’s owner may request the

29-42  dismissal of a civil action commenced by the association on the

29-43  ground that the association failed to comply with any provision of

29-44  this section.

30-1      Sec. 54.  NRS 116.31152 is hereby amended to read as

30-2  follows:

30-3      116.31152  1.  The executive board of an association shall:

30-4      (a) Cause to be conducted , at least once every 5 years, a study

30-5  of the reserves required to repair, replace and restore the major

30-6  components of the common elements;

30-7      (b) Review the results of that study at least annually to

30-8  determine if those reserves are sufficient; and

30-9      (c) Make any adjustments it deems necessary to maintain the

30-10  required reserves.

30-11     2.  The study required by subsection 1 must be conducted by a

30-12  person qualified by training and experience to conduct such a study,

30-13  including a member of the executive board, a unit’s owner or the

30-14  [property] community manager of the association who is so

30-15  qualified. The study must include, without limitation:

30-16     (a) A summary of an inspection of the major components of the

30-17  common elements the association is obligated to repair, replace or

30-18  restore;

30-19     (b) An identification of the major components of the common

30-20  elements that the association is obligated to repair, replace or restore

30-21  which have a remaining useful life of less than 30 years;

30-22     (c) An estimate of the remaining useful life of each major

30-23  component identified pursuant to paragraph (b);

30-24     (d) An estimate of the cost of repair, replacement or restoration

30-25  of each major component identified pursuant to paragraph (b) during

30-26  and at the end of its useful life; and

30-27     (e) An estimate of the total annual assessment that may be

30-28  required to cover the cost of repairing, replacement or restoration of

30-29  the major components identified pursuant to paragraph (b), after

30-30  subtracting the reserves of the association as of the date of the study.

30-31     3.  The Administrator shall adopt by regulation the

30-32  qualifications required for conducting a study required by

30-33  subsection 1.

30-34     Sec. 55.  NRS 116.31155 is hereby amended to read as

30-35  follows:

30-36     116.31155  1.  An association shall:

30-37     (a) If the association is required to pay the fee imposed by NRS

30-38  78.150 , 82.193 or [82.193,] 86.263, pay to the Administrator a fee

30-39  established by regulation of the Administrator for every unit in the

30-40  association used for residential use.

30-41     (b) If the association is organized as a trust or partnership, pay

30-42  to the Administrator a fee established by regulation of the

30-43  Administrator for each unit in the association.

30-44     2.  The fees required to be paid pursuant to this section must be:

31-1      (a) Paid at such times as are established by the [Administrator.]

31-2  Division.

31-3      (b) Deposited with the State Treasurer for credit to the Account

31-4  for [the Ombudsman for Owners in] Common-Interest Communities

31-5  created [pursuant to] by NRS 116.1117.

31-6      (c) Established on the basis of the actual cost of administering

31-7  the Office of the Ombudsman for Owners in Common-Interest

31-8  Communities and not on a basis which includes any subsidy for the

31-9  Office. In no event may the fees required to be paid pursuant to this

31-10  section exceed $3 per unit.

31-11     3.  A unit’s owner may not be required to pay any portion of the

31-12  fees required to be paid pursuant to this section to a master

31-13  association and to an association organized pursuant to

31-14  NRS 116.3101.

31-15     4.  Upon the payment of the fees required by this section, the

31-16  Administrator shall provide to the association evidence that it paid

31-17  the fees in compliance with this section.

31-18     Sec. 56.  NRS 116.31158 is hereby amended to read as

31-19  follows:

31-20     116.31158  1.  Each association shall, at the time it pays the

31-21  fee required by NRS 116.31155, register with the Ombudsman for

31-22  Owners in Common-Interest Communities on a form prescribed by

31-23  the Ombudsman.

31-24     2.  The form for registration must include, without limitation,

31-25  the information required to be maintained pursuant to paragraph

31-26  [(d)] (e) of subsection 4 of NRS 116.1116.

31-27     Sec. 57.  NRS 116.31162 is hereby amended to read as

31-28  follows:

31-29     116.31162  1.  Except as otherwise provided in subsection 4,

31-30  in a condominium, a cooperative where the owner’s interest in a unit

31-31  is real estate as determined pursuant to NRS 116.1105[,] or a

31-32  planned community, the association may foreclose its lien by sale

31-33  after:

31-34     (a) The association has mailed by certified or registered mail,

31-35  return receipt requested, to the unit’s owner or his successor in

31-36  interest, at his address if known[,] and at the address of the unit, a

31-37  notice of delinquent assessment which states the amount of the

31-38  assessments and other sums which are due in accordance with

31-39  subsection 1 of NRS 116.3116, a description of the unit against

31-40  which the lien is imposed[,] and the name of the record owner of

31-41  the unit;

31-42     (b) [The] Not less than 30 days after mailing the notice of

31-43  delinquent assessment pursuant to paragraph (a), the association

31-44  or other person conducting the sale has executed and caused to be

31-45  recorded, with the county recorder of the county in which the

32-1  common-interest community or any part of it is situated, a notice of

32-2  default and election to sell the unit to satisfy the lien, which contains

32-3  the same information as the notice of delinquent assessment, but

32-4  must also describe the deficiency in payment and the name and

32-5  address of the person authorized by the association to enforce the

32-6  lien by sale; and

32-7      (c) The unit’s owner or his successor in interest has failed to pay

32-8  the amount of the lien, including costs, fees and expenses incident to

32-9  its enforcement, for 60 days following the recording of the notice of

32-10  default and election to sell.

32-11     2.  The notice of default and election to sell must be signed by

32-12  the person designated in the declaration or by the association for that

32-13  purpose[,] or , if no one is designated, by the president of the

32-14  association.

32-15     3.  The period of 60 days begins on the first day following the

32-16  later of:

32-17     (a) The day on which the notice of default is recorded; [or]

32-18     (b) The day on which a copy of the notice of default is mailed

32-19  by certified or registered mail, return receipt requested, to the unit’s

32-20  owner or his successor in interest at his address , if known, and at

32-21  the address of the unit[.] ; or

32-22     (c) The day on which the association provided written

32-23  certification to the Ombudsman for Owners in Common-Interest

32-24  Communities that notices have been given in accordance with

32-25  subsection 1.

32-26     4.  The association may not foreclose a lien by sale for the

32-27  assessment of a fine for a violation of the declaration, bylaws, rules

32-28  or regulations of the association, unless the violation is of a type that

32-29  threatens the health, safety or welfare of the residents of the

32-30  common-interest community.

32-31     Sec. 58.  NRS 116.31175 is hereby amended to read as

32-32  follows:

32-33     116.31175  1.  Except as otherwise provided in this

32-34  subsection, the executive board of an association shall, upon the

32-35  written request of a unit’s owner, make available the books, records

32-36  and other papers of the association for review during the regular

32-37  working hours of the association[.] , including, without limitation,

32-38  all records filed with a court relating to a civil or criminal action

32-39  to which the association is a party. The provisions of this

32-40  subsection do not apply to:

32-41     (a) The personnel records of the employees of the association[;]

32-42  , except for those records relating to the salaries and benefits of

32-43  those employees; and

32-44     (b) The records of the association relating to another unit’s

32-45  owner.

33-1      2.  If the executive board refuses to allow a unit’s owner to

33-2  review the books, records or other papers of the association, the

33-3  Ombudsman for Owners in Common-Interest Communities may:

33-4      (a) On behalf of the unit’s owner and upon written request,

33-5  review the books, records or other papers of the association during

33-6  the regular working hours of the association; and

33-7      (b) If he is denied access to the books, records or other papers,

33-8  request the Real Estate Commission to issue a subpoena for their

33-9  production.

33-10     3.  The books, records and other papers of an association

33-11  must be maintained for at least 10 years.

33-12     Sec. 59.  NRS 116.4108 is hereby amended to read as follows:

33-13     116.4108  1.  A person required to deliver a public offering

33-14  statement pursuant to subsection 3 of NRS 116.4102 shall provide a

33-15  purchaser with a copy of the current public offering statement not

33-16  later than the date [of any contract of sale.] on which an offer to

33-17  purchase becomes binding on the purchaser. Unless the purchaser

33-18  has personally inspected the unit, the purchaser may cancel, by

33-19  written notice, the contract of purchase until midnight of the fifth

33-20  calendar day following the date of execution of the contract, and the

33-21  contract for purchase must contain a provision to that effect.

33-22     2.  If a purchaser elects to cancel a contract pursuant to

33-23  subsection 1, he may do so by hand delivering notice thereof to the

33-24  offeror or by mailing notice thereof by prepaid United States mail to

33-25  the offeror or to his agent for service of process. Cancelation is

33-26  without penalty, and all payments made by the purchaser before

33-27  cancelation must be refunded promptly.

33-28     3.  If a person required to deliver a public offering statement

33-29  pursuant to subsection 3 of NRS 116.4102 fails to provide a

33-30  purchaser to whom a unit is conveyed with a current public offering

33-31  statement, the purchaser is entitled to actual damages, rescission or

33-32  other relief, but if the purchaser has accepted a conveyance of the

33-33  unit, he is not entitled to rescission.

33-34     Sec. 60.  NRS 116.4109 is hereby amended to read as follows:

33-35     116.4109  1.  Except in the case of a sale in which delivery of

33-36  a public offering statement is required, or unless exempt under

33-37  subsection 2 of NRS 116.4101, a unit’s owner shall furnish to a

33-38  purchaser before [execution of any contract for sale of a unit, or

33-39  otherwise before conveyance:] an offer to purchase a unit becomes

33-40  binding on the purchaser:

33-41     (a) A copy of the declaration, other than any plats and plans, the

33-42  bylaws, the rules or regulations of the association and the

33-43  information statement required by NRS 116.41095;

34-1      (b) A statement setting forth the amount of the monthly

34-2  assessment for common expenses and any unpaid assessment of any

34-3  kind currently due from the selling unit’s owner;

34-4      (c) The current operating budget of the association and a

34-5  financial statement for the association; and

34-6      (d) A statement of any unsatisfied judgments or pending legal

34-7  actions against the association and the status of any pending legal

34-8  actions relating to the common-interest community of which the

34-9  unit’s owner has actual knowledge.

34-10     2.  The association, within 10 days after a request by a unit’s

34-11  owner, shall furnish a certificate containing the information

34-12  necessary to enable the unit’s owner to comply with this section. A

34-13  unit’s owner providing a certificate pursuant to subsection 1 is not

34-14  liable to the purchaser for any erroneous information provided by

34-15  the association and included in the certificate.

34-16     3.  Neither a purchaser nor the purchaser’s interest in a unit is

34-17  liable for any unpaid assessment or fee greater than the amount set

34-18  forth in the certificate prepared by the association. If the association

34-19  fails to furnish the certificate within the 10 days allowed by

34-20  subsection 2, the seller is not liable for the delinquent assessment.

34-21     Sec. 61.  NRS 116.41095 is hereby amended to read as

34-22  follows:

34-23     116.41095  The information statement required by NRS

34-24  116.4103 and 116.4109 must be in substantially the following form:

 

34-25  BEFORE YOU PURCHASE PROPERTY IN A

34-26  COMMON-INTEREST COMMUNITY

34-27  DID YOU KNOW . . .

34-28     1.  YOU ARE AGREEING TO RESTRICTIONS ON HOW

34-29  YOU CAN USE YOUR PROPERTY?

34-30  These restrictions are contained in a document known as the

34-31  Declaration of Covenants, Conditions and Restrictions (C, C & R’s)

34-32  that should be provided for your review before making your

34-33  purchase. The C, C & R’s become a part of the title to your

34-34  property. They bind you and every future owner of the property

34-35  whether or not you have read them or had them explained to you.

34-36  The C, C & R’s, together with other “governing documents” (such

34-37  as association bylaws and rules and regulations), are intended to

34-38  preserve the character and value of properties in the community, but

34-39  may also restrict what you can do to improve or change your

34-40  property and limit how you use and enjoy your property. By

34-41  purchasing a property encumbered by C, C & R’s, you are agreeing

34-42  to limitations that could affect your lifestyle and freedom of choice.

34-43  You should review the C, C & R’s and other governing documents

35-1  before purchasing to make sure that these limitations and controls

35-2  are acceptable to you.

35-3      2.  YOU WILL HAVE TO PAY OWNERS’ ASSESSMENTS

35-4  FOR AS LONG AS YOU OWN YOUR PROPERTY?

35-5  As an owner in a common-interest community, you are responsible

35-6  for paying your share of expenses relating to the common elements,

35-7  such as landscaping, shared amenities and the operation of any

35-8  homeowner’s association. The obligation to pay these assessments

35-9  binds you and every future owner of the property. Owners’ fees are

35-10  usually assessed by the homeowner’s association and due monthly.

35-11  You have to pay dues whether or not you agree with the way the

35-12  association is managing the property or spending the assessments.

35-13  The executive board of the association may have the power to

35-14  change and increase the amount of the assessment and to levy

35-15  special assessments against your property to meet extraordinary

35-16  expenses. In some communities, major components of the

35-17  community such as roofs and private roads must be maintained and

35-18  replaced by the association. If the association is not well managed or

35-19  fails to maintain adequate reserves to repair, replace and restore

35-20  common elements, you may be required to pay large, special

35-21  assessments to accomplish these tasks.

35-22     3.  IF YOU FAIL TO PAY OWNERS’ ASSESSMENTS, YOU

35-23  COULD LOSE YOUR HOME?

35-24  If you do not pay these assessments when due, the association

35-25  usually has the power to collect them by selling your property in a

35-26  nonjudicial foreclosure sale. If fees become delinquent, you may

35-27  also be required to pay penalties and the association’s costs and

35-28  attorney’s fees to become current. If you dispute the obligation or its

35-29  amount, your only remedy to avoid the loss of your home may be to

35-30  file a lawsuit and ask a court to intervene in the dispute.

35-31     4.  YOU MAY BECOME A MEMBER OF A

35-32  HOMEOWNER’S ASSOCIATION THAT HAS THE POWER TO

35-33  AFFECT HOW YOU USE AND ENJOY YOUR PROPERTY?

35-34  Many common-interest communities have a homeowner’s

35-35  association. In a new development, the association will usually be

35-36  controlled by the developer until a certain number of units have

35-37  been sold. After the period of developer control, the association may

35-38  be controlled by property owners like yourself who are elected by

35-39  homeowners to sit on an executive board and other boards and

35-40  committees formed by the association. The association, and its

35-41  executive board, are responsible for assessing homeowners for the

35-42  cost of operating the association and the common or shared

35-43  elements of the community and for the day to day operation and

35-44  management of the community. Because homeowners sitting on the

35-45  executive board and other boards and committees of the association

36-1  may not have the experience or professional background required to

36-2  understand and carry out the responsibilities of the association

36-3  properly, the association may hire professional managers to carry

36-4  out these responsibilities.

36-5  Homeowner’s associations operate on democratic principles. Some

36-6  decisions require all homeowners to vote, some decisions are made

36-7  by the executive board or other boards or committees established by

36-8  the association or governing documents. Although the actions of the

36-9  association and its executive board are governed by state laws, the

36-10  C, C & R’s and other documents that govern the common-interest

36-11  community, decisions made by these persons will affect your use

36-12  and enjoyment of your property, your lifestyle and freedom of

36-13  choice, and your cost of living in the community. You may not

36-14  agree with decisions made by the association or its governing bodies

36-15  even though the decisions are ones which the association is

36-16  authorized to make. Decisions may be made by a few persons on the

36-17  executive board or governing bodies that do not necessarily reflect

36-18  the view of the majority of homeowners in the community. If you do

36-19  not agree with decisions made by the association, its executive

36-20  board or other governing bodies, your remedy is typically to attempt

36-21  to use the democratic processes of the association to seek the

36-22  election of members of the executive board or other governing

36-23  bodies that are more responsive to your needs. If persons controlling

36-24  the association or its management are not complying with state laws

36-25  or the governing documents, your remedy is typically to seek to

36-26  mediate or arbitrate the dispute and, if mediation or arbitration is

36-27  unsuccessful, file a lawsuit and ask a court to resolve the dispute. In

36-28  addition to your personal cost in mediation or arbitration, or to

36-29  prosecute a lawsuit, you may be responsible for paying your share

36-30  of the association’s cost in defending against your claim. There is no

36-31  government agency in this state that investigates or intervenes to

36-32  resolve disputes in homeowner’s associations.

36-33     5.  YOU ARE REQUIRED TO PROVIDE PROSPECTIVE

36-34  BUYERS OF YOUR PROPERTY WITH INFORMATION

36-35  ABOUT LIVING IN YOUR COMMON-INTEREST

36-36  COMMUNITY?

36-37  The law requires you to provide to a prospective purchaser of your

36-38  property, before you enter into a purchase agreement, a copy of the

36-39  community’s governing documents, including the C, C & R’s,

36-40  association bylaws, and rules and regulations, as well as a copy of

36-41  this document. You are also required to provide a copy of the

36-42  association’s current financial statement, operating budget and

36-43  information regarding the amount of the monthly assessment for

36-44  common expenses, including the amount set aside as reserves for the

36-45  repair, replacement and restoration of common elements. You are

37-1  also required to inform prospective purchasers of any outstanding

37-2  judgments or lawsuits pending against the association of which you

37-3  are aware. You are also required to provide a copy of the minutes

37-4  from the most recent meeting of the homeowner’s association or its

37-5  executive board. For more information regarding these

37-6  requirements, see Nevada Revised Statutes 116.4103[.] and

37-7  116.4109.

37-8      6.  YOU HAVE CERTAIN RIGHTS REGARDING

37-9  OWNERSHIP IN A COMMON-INTEREST COMMUNITY THAT

37-10  ARE GUARANTEED YOU BY THE STATE?

37-11  Pursuant to provisions of chapter 116 of Nevada Revised Statutes,

37-12  you have the right:

37-13     (a) To be notified of all meetings of the association and its

37-14  executive board, except in cases of emergency.

37-15     (b) To attend and speak at all meetings of the association and its

37-16  executive board, except in some cases where the executive board is

37-17  authorized to meet in closed, executive session.

37-18     (c) To request a special meeting of the association upon petition

37-19  of at least 10 percent of the homeowners.

37-20     (d) To inspect, examine, photocopy and audit financial and other

37-21  records of the association.

37-22     (e) To be notified of all changes in the community’s rules and

37-23  regulations and other actions by the association or board that affect

37-24  you.

37-25     7.  QUESTIONS?

37-26  Although they may be voluminous, you should take the time to read

37-27  and understand the documents that will control your ownership of a

37-28  property in a common-interest community. You may wish to ask

37-29  your real estate professional, lawyer or other person with experience

37-30  to explain anything you do not understand. You may also request

37-31  assistance from the Ombudsman for Owners in Common-Interest

37-32  Communities, Nevada Real Estate Division, at (telephone number)

37-33  [.] , or the Commission for Common-Interest Communities, at

37-34  (telephone number).

37-35  Buyer or prospective buyer’s initials:_____

37-36  Date:_____

37-37     Sec. 62.  NRS 38.330 is hereby amended to read as follows:

37-38     38.330  1.  If all parties named in a written claim filed

37-39  pursuant to NRS 38.320 agree to have the claim submitted for

37-40  mediation, the parties shall reduce the agreement to writing and

37-41  shall select a mediator from the list of mediators maintained by the

37-42  Division pursuant to NRS 38.340. Any mediator selected must be

37-43  available within the geographic area. If the parties fail to agree upon

37-44  a mediator, the Division shall appoint a mediator from the list of

37-45  mediators maintained by the Division. Any mediator appointed must

38-1  be available within the geographic area. Unless otherwise provided

38-2  by an agreement of the parties, mediation must be completed within

38-3  60 days after the parties agree to mediation. Any agreement

38-4  obtained through mediation conducted pursuant to this section must,

38-5  within 20 days after the conclusion of mediation, be reduced to

38-6  writing by the mediator and a copy thereof provided to each party.

38-7  The agreement may be enforced as any other written agreement.

38-8  Except as otherwise provided in this section, the parties are

38-9  responsible for all costs of mediation conducted pursuant to this

38-10  section.

38-11     2.  If all the parties named in the claim do not agree to

38-12  mediation, the parties shall select an arbitrator from the list of

38-13  arbitrators maintained by the Division pursuant to NRS 38.340. Any

38-14  arbitrator selected must be available within the geographic area. If

38-15  the parties fail to agree upon an arbitrator, the Division shall appoint

38-16  an arbitrator from the list maintained by the Division. Any arbitrator

38-17  appointed must be available within the geographic area. Upon

38-18  appointing an arbitrator, the Division shall provide the name of the

38-19  arbitrator to each party.

38-20     3.  The Division may provide for the payment of the fees for a

38-21  mediator or an arbitrator selected or appointed pursuant to this

38-22  section from the Account for [the Ombudsman for Owners in]

38-23  Common-Interest Communities created [pursuant to] by NRS

38-24  116.1117, to the extent that money is available in the Account for

38-25  this purpose.

38-26     4.  Except as otherwise provided in this section and except

38-27  where inconsistent with the provisions of NRS 38.300 to 38.360,

38-28  inclusive, the arbitration of a claim pursuant to this section must be

38-29  conducted in accordance with the provisions of NRS 38.231,

38-30  38.232, 38.233, 38.236 to 38.239, inclusive, 38.242 and 38.243. At

38-31  any time during the arbitration of a claim relating to the

38-32  interpretation, application or enforcement of any covenants,

38-33  conditions or restrictions applicable to residential property or any

38-34  bylaws, rules or regulations adopted by an association, the arbitrator

38-35  may issue an order prohibiting the action upon which the claim is

38-36  based. An award must be made within 30 days after the conclusion

38-37  of arbitration, unless a shorter period is agreed upon by the parties to

38-38  the arbitration.

38-39     5.  If all the parties have agreed to nonbinding arbitration, any

38-40  party to the arbitration may, within 30 days after a decision and

38-41  award have been served upon the parties, commence a civil action in

38-42  the proper court concerning the claim which was submitted for

38-43  arbitration. Any complaint filed in such an action must contain a

38-44  sworn statement indicating that the issues addressed in the

38-45  complaint have been arbitrated pursuant to the provisions of NRS

39-1  38.300 to 38.360, inclusive. If such an action is not commenced

39-2  within that period, any party to the arbitration may, within 1 year

39-3  after the service of the award, apply to the proper court for a

39-4  confirmation of the award pursuant to NRS 38.239.

39-5      6.  If all the parties agree in writing to binding arbitration, the

39-6  arbitration must be conducted in accordance with the provisions of

39-7  this chapter . [38 of NRS.] An award procured pursuant to such

39-8  arbitration may be vacated and a rehearing granted upon application

39-9  of a party pursuant to the provisions of NRS 38.241.

39-10     7.  If, after the conclusion of arbitration, a party:

39-11     (a) Applies to have an award vacated and a rehearing granted

39-12  pursuant to NRS 38.241; or

39-13     (b) Commences a civil action based upon any claim which was

39-14  the subject of arbitration,

39-15  the party shall, if he fails to obtain a more favorable award or

39-16  judgment than that which was obtained in the initial arbitration, pay

39-17  all costs and reasonable attorney’s fees incurred by the opposing

39-18  party after the application for a rehearing was made or after the

39-19  complaint in the civil action was filed.

39-20     8.  Upon request by a party, the Division shall provide a

39-21  statement to the party indicating the amount of the fees for a

39-22  mediator or an arbitrator selected or appointed pursuant to this

39-23  section.

39-24     9.  As used in this section, “geographic area” means an area

39-25  within 150 miles from any residential property or association which

39-26  is the subject of a written claim submitted pursuant to NRS 38.320.

39-27     Sec. 63.  As soon as practicable after October 1, 2003, the

39-28  Governor shall appoint to the Commission for Common-Interest

39-29  Communities:

39-30     1.  One member whose term expires on October 1, 2004.

39-31     2.  Two members whose terms expire on October 1, 2005.

39-32     3.  Two members whose terms expire on October 1, 2006.

39-33     Sec. 64.  The State Treasurer shall transfer any balance

39-34  remaining unexpended on October 1, 2003, in the Account for the

39-35  Ombudsman for Owners in Common-Interest Communities in the

39-36  State General Fund to the Account for Common-Interest

39-37  Communities which is created by NRS 116.1117, as amended by

39-38  this act.

39-39     Sec. 65.  Notwithstanding the provisions of section 51 of this

39-40  act, a person who engages in business as a community manager is

39-41  not required to be certified pursuant to the provisions of this act

39-42  before January 1, 2004.

39-43     Sec. 66.  Sections 20, 21 and 22 of this act expire by limitation

39-44  on the date on which the provisions of 42 U.S.C. § 666 requiring

39-45  each state to establish procedures under which the state has

40-1  authority to withhold or suspend, or to restrict the use of

40-2  professional, occupational and recreational licenses of persons who:

40-3      1.  Have failed to comply with a subpoena or warrant relating to

40-4  a proceeding to determine the paternity of a child or to establish or

40-5  enforce an obligation for the support of a child; or

40-6      2.  Are in arrears in the payment for the support of one or more

40-7  children,

40-8  are repealed by the Congress of the United States.

 

40-9  H