SB136_R1

(Reprinted with amendments adopted on April 18, 2003)

Senate Bill No. 136–Senators Hardy, O’Connell, Cegavske, Townsend, Amodei, Care, Coffin, McGinness, Nolan, Schneider, Shaffer, Tiffany and Titus

February 17, 2003

____________

Referred to Committee on Commerce and Labor

SUMMARY—Makes various changes relating to certain penalties and fines imposed by unit-owners’ associations. (BDR 10‑897)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State: No.

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

Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

AN ACT relating to property; making various changes relating to common-interest communities; authorizing a unit-owners’ association to impose construction penalties under certain circumstances and to place and foreclose a lien on a unit for failure to pay such penalties; revising provisions governing the imposition of certain fines by a unit-owners’ association; establishing certain procedural requirements for the imposition of certain fines; providing exceptions; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

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

1-2 thereto a new section to read as follows:

1-3 1. A unit’s owner shall adhere to a schedule required by the

1-4 association for:

1-5 (a) The completion of the design of a unit or the design of an

1-6 improvement to a unit;

1-7 (b) The commencement of the construction of a unit or the

1-8 construction of an improvement to a unit;

2-1 (c) The completion of the construction of a unit or the

2-2 construction of an improvement to the unit; or

2-3 (d) The issuance of a permit which is necessary for the

2-4 occupancy of a unit or for the use of an improvement to a unit.

2-5 2. The association may impose and enforce a construction

2-6 penalty against a unit’s owner who fails to adhere to a schedule as

2-7 required pursuant to subsection 1 if:

2-8 (a) The maximum amount of the construction penalty and the

2-9 schedule are set forth in:

2-10 (1) The declaration;

2-11 (2) Another document related to the common-interest

2-12 community that is recorded before the date on which the unit’s

2-13 owner acquired title to the unit; or

2-14 (3) A contract between the unit’s owner and the

2-15 association; and

2-16 (b) The unit’s owner receives notice of the alleged violation

2-17 which informs him that he has a right to a hearing on the alleged

2-18 violation.

2-19 3. For the purposes of this chapter, a construction penalty is

2-20 not a fine.

2-21 Sec. 2. NRS 116.1203 is hereby amended to read as follows:

2-22 116.1203 1. Except as otherwise provided in subsection 2, if

2-23 a planned community contains no more than 12 units and is not

2-24 subject to any developmental rights, it is subject only to NRS

2-25 116.1105, 116.1106 and 116.1107 unless the declaration provides

2-26 that this entire chapter is applicable.

2-27 2. Except for NRS 116.3104, 116.31043, 116.31046 and

2-28 116.31138, the provisions of NRS 116.3101 to 116.3119, inclusive,

2-29 and section 1 of this act and the definitions set forth in NRS

2-30 116.110305 to 116.110393, inclusive, to the extent that such

2-31 definitions are necessary in construing any of those [sections,]

2-32 provisions, apply to a residential planned community containing

2-33 more than six units.

2-34 Sec. 3. NRS 116.3102 is hereby amended to read as follows:

2-35 116.3102 1. Except as otherwise provided in subsection 2,

2-36 and subject to the provisions of the declaration, the association may:

2-37 (a) Adopt and amend bylaws, rules and regulations;

2-38 (b) Adopt and amend budgets for revenues, expenditures and

2-39 reserves and collect assessments for common expenses from units’

2-40 owners;

2-41 (c) Hire and discharge managing agents and other employees,

2-42 agents and independent contractors;

2-43 (d) Institute, defend or intervene in litigation or administrative

2-44 proceedings in its own name on behalf of itself or two or more units’

2-45 owners on matters affecting the common-interest community;

3-1 (e) Make contracts and incur liabilities;

3-2 (f) Regulate the use, maintenance, repair, replacement and

3-3 modification of common elements;

3-4 (g) Cause additional improvements to be made as a part of the

3-5 common elements;

3-6 (h) Acquire, hold, encumber and convey in its own name any

3-7 right, title or interest to real estate or personal property, but:

3-8 (1) Common elements in a condominium or planned

3-9 community may be conveyed or subjected to a security interest only

3-10 pursuant to NRS 116.3112; and

3-11 (2) Part of a cooperative may be conveyed, or all or part of a

3-12 cooperative may be subjected to a security interest, only pursuant to

3-13 NRS 116.3112;

3-14 (i) Grant easements, leases, licenses and concessions through or

3-15 over the common elements;

3-16 (j) Impose and receive any payments, fees or charges for the use,

3-17 rental or operation of the common elements, other than limited

3-18 common elements described in subsections 2 and 4 of NRS

3-19 116.2102, and for services provided to units’ owners;

3-20 (k) Impose charges for late payment of assessments [and, except

3-21 as otherwise provided in NRS 116.31031, after notice and an

3-22 opportunity to be heard, levy] ;

3-23 (l) Impose construction penalties when authorized pursuant to

3-24 section 1 of this act;

3-25 (m) Impose reasonable fines for violations of the [declaration,

3-26 bylaws, rules and regulations] governing documents of the

3-27 association[;

3-28 (l)] only if the association complies with the requirements set

3-29 forth in NRS 116.31031;

3-30 (n) Impose reasonable charges for the preparation and

3-31 recordation of amendments to the declaration, the information

3-32 required by NRS 116.4109 or statements of unpaid assessments;

3-33 [(m)] (o) Provide for the indemnification of its officers and

3-34 executive board and maintain directors’ and officers’ liability

3-35 insurance;

3-36 [(n)] (p) Assign its right to future income, including the right to

3-37 receive assessments for common expenses, but only to the extent the

3-38 declaration expressly so provides;

3-39 [(o)] (q) Exercise any other powers conferred by the declaration

3-40 or bylaws;

3-41 [(p)] (r) Exercise all other powers that may be exercised in this

3-42 state by legal entities of the same type as the association;

3-43 [(q)] (s) Direct the removal of vehicles improperly parked on

3-44 property owned or leased by the association, pursuant to NRS

3-45 487.038; and

4-1 [(r)] (t) Exercise any other powers necessary and proper for the

4-2 governance and operation of the association.

4-3 2. The declaration may not impose limitations on the power of

4-4 the association to deal with the declarant which are more restrictive

4-5 than the limitations imposed on the power of the association to deal

4-6 with other persons.

4-7 Sec. 4. NRS 116.31031 is hereby amended to read as follows:

4-8 116.31031 1. [If] Except as otherwise provided in this

4-9 section, if a unit’s owner [, or a tenant or guest of a unit’s owner,

4-10 does not comply with a] violates any provision of the governing

4-11 documents of an association, the executive board of the association

4-12 may, if the governing documents so provide:

4-13 (a) Prohibit, for a reasonable time, the unit’s owner [, or the

4-14 tenant or guest of the unit’s owner,] from:

4-15 (1) Voting on matters related to the common-interest

4-16 community.

4-17 (2) Using the common elements. The provisions of this

4-18 subparagraph do not prohibit the unit’s owner [, or the tenant or

4-19 guest of the unit’s owner,] from using any vehicular or pedestrian

4-20 ingress or egress to go to or from the unit, including any area used

4-21 for parking.

4-22 (b) [Require the unit’s owner, or the tenant or guest of the unit’s

4-23 owner, to pay] Impose a fine against the unit’s owner for each

4-24 [failure to comply that does not threaten the health and welfare of

4-25 the common-interest community.] violation, except that a fine may

4-26 not be imposed for a violation that is the subject of a construction

4-27 penalty pursuant to section 1 of this act. The fine must be

4-28 commensurate with the severity of the violation, but must not

4-29 exceed $100 for each violation or a total amount of $500, whichever

4-30 is less.

4-31 2. If a tenant or guest of a unit’s owner violates any provision

4-32 of the governing documents, the executive board may, if the

4-33 governing documents so provide:

4-34 (a) Impose a fine or take any other action authorized by this

4-35 section against the unit’s owner as if the unit’s owner had

4-36 committed the violation; or

4-37 (b) Impose a fine or take any other action authorized by this

4-38 section against the tenant or guest of the unit’s owner in the same

4-39 manner that it may take such actions against the unit’s owner.

4-40 The executive board may hold a unit’s owner jointly and severally

4-41 liable for a fine imposed against a tenant or guest of the unit’s

4-42 owner pursuant to this paragraph if the governing documents so

4-43 provide and the executive board complies with the procedural

4-44 requirements set forth in this section with respect to the unit’s

4-45 owner.

5-1 3. The executive board may not impose a fine pursuant to

5-2 subsection 1 or 2 unless:

5-3 (a) Not less than 30 days before the violation, the person

5-4 against whom the fine will be imposed had been provided with

5-5 written notice of the applicable provisions of the governing

5-6 documents that form the basis of the violation; and

5-7 (b) Within a reasonable time after the discovery of the

5-8 violation, the person against whom the fine will be imposed has

5-9 been provided with:

5-10 (1) Written notice specifying the details of the violation, the

5-11 amount of the fine, and the date, time and location for a hearing

5-12 on the violation; and

5-13 (2) A reasonable opportunity to contest the violation at the

5-14 hearing.

5-15 4. The executive board must schedule the date, time and

5-16 location for the hearing on the violation so that the person against

5-17 whom the fine will be imposed is provided with a reasonable

5-18 opportunity to prepare for the hearing and to be present at the

5-19 hearing.

5-20 5. The executive board must hold a hearing before it may

5-21 impose the fine, unless the person against whom the fine will be

5-22 imposed:

5-23 (a) Pays the fine;

5-24 (b) Executes a written waiver of the right to the hearing; or

5-25 (c) Fails to appear at the hearing after being provided with

5-26 proper notice of the hearing.

5-27 6. If a fine is imposed pursuant to subsection 1 or 2 and the

5-28 violation is not cured within 14 days , or [a] within any longer

5-29 period [as] that may be established by the executive board, the

5-30 violation shall be deemed a continuing violation. Thereafter, the

5-31 executive board may impose an additional fine for the violation for

5-32 each 7-day period or portion thereof that the violation is not cured.

5-33 Any additional fine may be imposed without notice and an

5-34 opportunity to be heard.

5-35 [3. Except as otherwise provided in subsection 2, the

5-36 imposition of a fine pursuant to this section must comply with the

5-37 requirements of subsection 6 of NRS 116.31065.]

5-38 7. If the governing documents so provide, the executive board

5-39 may appoint a committee, with not less than three members, to

5-40 conduct hearings on violations and to impose fines pursuant to

5-41 this section. While acting on behalf of the executive board for

5-42 those limited purposes, the committee and its members are entitled

5-43 to all privileges and immunities and are subject to all duties and

5-44 requirements of the executive board and its members.

6-1 8. The provisions of this section establish the minimum

6-2 procedural requirements that the executive board must follow

6-3 before it may impose a fine. The provisions of this section do not

6-4 preempt any provisions of the governing documents that provide

6-5 greater procedural protections.

6-6 Sec. 5. NRS 116.31065 is hereby amended to read as follows:

6-7 116.31065 The rules adopted by an association:

6-8 1. Must be reasonably related to the purpose for which they are

6-9 adopted.

6-10 2. Must be sufficiently explicit in their prohibition, direction or

6-11 limitation to inform a [unit’s owner, or a tenant or guest of a unit’s

6-12 owner,] person of any action or omission required for compliance.

6-13 3. Must not be adopted to evade any obligation of the

6-14 association.

6-15 4. Must be consistent with the governing documents of the

6-16 association and must not arbitrarily restrict conduct or require the

6-17 construction of any capital improvement by a unit’s owner that is

6-18 not required by the governing documents of the association.

6-19 5. Must be uniformly enforced under the same or similar

6-20 circumstances against all units’ owners. Any rule that is not so

6-21 uniformly enforced may not be enforced against any unit’s owner.

6-22 6. May be enforced by the [assessment] association through

6-23 the imposition of a fine only if[:

6-24 (a) The person alleged to have violated the rule has received

6-25 notice of the alleged violation that informs him of his opportunity to

6-26 request a hearing on the alleged violation.

6-27 (b) At least 30 days before the alleged violation, the person

6-28 alleged to have violated the rule was given written notice of the rule

6-29 or any amendment to the rule.] the association complies with the

6-30 requirements set forth in NRS 116.31031.

6-31 Sec. 6. NRS 116.3108 is hereby amended to read as follows:

6-32 116.3108 1. A meeting of the units’ owners of an association

6-33 must be held at least once each year. If the governing documents of

6-34 a common‑interest community do not designate an annual meeting

6-35 date of the units’ owners, a meeting of the units’ owners must be

6-36 held 1 year after the date of the last meeting of the units’ owners. If

6-37 the units’ owners have not held a meeting for 1 year, a meeting of

6-38 the units’ owners must be held on the following March 1. Special

6-39 meetings of the units’ owners of an association may be called by the

6-40 president, a majority of the executive board or by units’ owners

6-41 having 10 percent, or any lower percentage specified in the bylaws,

6-42 of the votes in the association.

6-43 2. Not less than 10 nor more than 60 days in advance of any

6-44 meeting of the units’ owners of an association, the secretary or other

6-45 officer specified in the bylaws shall cause notice of the meeting to

7-1 be hand‑delivered, sent prepaid by United States mail to the mailing

7-2 address of each unit or to any other mailing address designated in

7-3 writing by the unit’s owner or, if the association offers to send

7-4 notice by electronic mail, sent by electronic mail at the request of

7-5 the unit’s owner to an electronic mail address designated in writing

7-6 by the unit’s owner. The notice of the meeting must state the time

7-7 and place of the meeting and include a copy of the agenda for the

7-8 meeting. The notice must include notification of the right of a unit’s

7-9 owner to:

7-10 (a) Have a copy of the minutes or a summary of the minutes of

7-11 the meeting [distributed to him] provided to the unit’s owner upon

7-12 request and, if required by the executive board, upon payment to the

7-13 association of the cost of [making the distribution.] providing the

7-14 copy to the unit’s owner.

7-15 (b) Speak to the association or executive board, unless the

7-16 executive board is meeting in executive session.

7-17 3. The agenda for a meeting of the units’ owners must consist

7-18 of:

7-19 (a) A clear and complete statement of the topics scheduled to be

7-20 considered during the meeting, including, without limitation, any

7-21 proposed amendment to the declaration or bylaws, any fees or

7-22 assessments to be imposed or increased by the association, any

7-23 budgetary changes and any proposal to remove an officer of the

7-24 association or member of the executive board.

7-25 (b) A list describing the items on which action may be taken and

7-26 clearly denoting that action may be taken on those items. In an

7-27 emergency, the units’ owners may take action on an item which is

7-28 not listed on the agenda as an item on which action may be taken.

7-29 (c) A period devoted to comments by units’ owners and

7-30 discussion of those comments. Except in emergencies, no action

7-31 may be taken upon a matter raised under this item of the agenda

7-32 until the matter itself has been specifically included on an agenda as

7-33 an item upon which action may be taken pursuant to paragraph (b).

7-34 4. If the association adopts a policy imposing [a fine on a unit’s

7-35 owner for the violation of the declaration, bylaws or other rules

7-36 established by] fines for any violations of the governing documents

7-37 of the association, the secretary or other officer specified in the

7-38 bylaws shall prepare and cause to be hand‑delivered or sent prepaid

7-39 by United States mail to the mailing address of each unit or to any

7-40 other mailing address designated in writing by the unit’s owner, a

7-41 schedule of the fines that may be imposed for those violations.

7-42 5. Not more than 30 days after any meeting of the units’

7-43 owners, the secretary or other officer specified in the bylaws shall

7-44 cause the minutes or a summary of the minutes of the meeting to be

7-45 made available to the units’ owners. A copy of the minutes or a

8-1 summary of the minutes must be provided to any unit’s owner who

8-2 pays the association the cost of providing the copy to him.

8-3 6. As used in this section, “emergency” means any occurrence

8-4 or combination of occurrences that:

8-5 (a) Could not have been reasonably foreseen;

8-6 (b) Affects the health, welfare and safety of the units’ owners of

8-7 the association;

8-8 (c) Requires the immediate attention of, and possible action by,

8-9 the executive board; and

8-10 (d) Makes it impracticable to comply with the provisions of

8-11 subsection 2 or 3.

8-12 Sec. 7. NRS 116.31085 is hereby amended to read as follows:

8-13 116.31085 1. Except as otherwise provided in this section, a

8-14 unit’s owner may attend any meeting of the units’ owners of the

8-15 association or of the executive board and speak at any such meeting.

8-16 The executive board may establish reasonable limitations on the

8-17 time a unit’s owner may speak at such a meeting.

8-18 2. An executive board may meet in executive session to:

8-19 (a) Consult with the attorney for the association on matters

8-20 relating to proposed or pending litigation if the contents of the

8-21 discussion would otherwise be governed by the privilege set forth in

8-22 NRS 49.035 to 49.115, inclusive;

8-23 (b) Discuss matters relating to personnel; [or

8-24 (c) Discuss]

8-25 (c) Except as otherwise provided in subsection 3, discuss a

8-26 violation of the governing documents , [alleged to have been

8-27 committed by a unit’s owner,] including, without limitation, the

8-28 failure to pay an assessment [, except as otherwise provided in

8-29 subsection 3.] ; or

8-30 (d) Discuss the alleged failure of a unit’s owner to adhere to a

8-31 schedule required pursuant to section 1 of this act if the alleged

8-32 failure may subject the unit’s owner to a construction penalty.

8-33 3. An executive board shall meet in executive session to hold a

8-34 hearing on an alleged violation of the governing documents unless

8-35 the [unit’s owner who allegedly committed] person who may be

8-36 sanctioned for the alleged violation requests in writing that the

8-37 hearing be conducted by the executive board at an open meeting.

8-38 The [unit’s owner who is alleged to have committed] person who

8-39 may be sanctioned for the alleged violation [may] is entitled to

8-40 attend the hearing and testify concerning the alleged violation, but

8-41 the person may be excluded by the executive board from any other

8-42 portion of the hearing, including, without limitation, the

8-43 deliberations of the executive board.

8-44 4. Except as otherwise provided in this subsection, any matter

8-45 discussed by the executive board when it meets in executive session

9-1 must be generally noted in the minutes of the meeting of the

9-2 executive board. The executive board shall maintain minutes of any

9-3 decision made pursuant to subsection 3 concerning an alleged

9-4 violation and, upon request, provide a copy of the decision to the

9-5 [unit’s owner who was the subject of the hearing] person who was

9-6 subject to being sanctioned at the hearing or to his designated

9-7 representative.

9-8 5. Except as otherwise provided in subsection 3, a unit’s owner

9-9 is not entitled to attend or speak at a meeting of the executive board

9-10 held in executive session.

9-11 Sec. 8. NRS 116.3116 is hereby amended to read as follows:

9-12 116.3116 1. The association has a lien on a unit for any

9-13 construction penalty that is imposed against the unit’s owner

9-14 pursuant to section 1 of this act, any assessment levied against that

9-15 unit or any fines imposed against the unit’s owner from the time the

9-16 construction penalty, assessment or fine becomes due. Unless the

9-17 declaration otherwise provides, any penalties, fees, charges, late

9-18 charges, fines and interest charged pursuant to paragraphs (j) [, (k)

9-19 and (l)] to (n), inclusive, of subsection 1 of NRS 116.3102 are

9-20 enforceable as assessments under this section. If an assessment is

9-21 payable in installments, the full amount of the assessment is a lien

9-22 from the time the first installment thereof becomes due.

9-23 2. A lien under this section is prior to all other liens and

9-24 encumbrances on a unit except:

9-25 (a) Liens and encumbrances recorded before the recordation of

9-26 the declaration and, in a cooperative, liens and encumbrances which

9-27 the association creates, assumes or takes subject to;

9-28 (b) A first security interest on the unit recorded before the date

9-29 on which the assessment sought to be enforced became delinquent

9-30 [,] or, in a cooperative, the first security interest encumbering only

9-31 the unit’s owner’s interest and perfected before the date on which

9-32 the assessment sought to be enforced became delinquent; and

9-33 (c) Liens for real estate taxes and other governmental

9-34 assessments or charges against the unit or cooperative.

9-35 The lien is also prior to all security interests described in paragraph

9-36 (b) to the extent of the assessments for common expenses based on

9-37 the periodic budget adopted by the association pursuant to NRS

9-38 116.3115 which would have become due in the absence of

9-39 acceleration during the 6 months immediately preceding institution

9-40 of an action to enforce the lien. This subsection does not affect the

9-41 priority of mechanics’ or materialmen’s liens, or the priority of liens

9-42 for other assessments made by the association.

9-43 3. Unless the declaration otherwise provides, if two or more

9-44 associations have liens for assessments created at any time on the

9-45 same property, those liens have equal priority.

10-1 4. Recording of the declaration constitutes record notice and

10-2 perfection of the lien. No further recordation of any claim of lien for

10-3 assessment under this section is required.

10-4 5. A lien for unpaid assessments is extinguished unless

10-5 proceedings to enforce the lien are instituted within 3 years after the

10-6 full amount of the assessments becomes due.

10-7 6. This section does not prohibit actions to recover sums for

10-8 which subsection 1 creates a lien or prohibit an association from

10-9 taking a deed in lieu of foreclosure.

10-10 7. A judgment or decree in any action brought under this

10-11 section must include costs and reasonable attorney’s fees for the

10-12 prevailing party.

10-13 8. The association , upon written request , shall furnish to a

10-14 unit’s owner a statement setting forth the amount of unpaid

10-15 assessments against the unit. If the interest of the unit’s owner is real

10-16 estate, the statement must be in recordable form. The statement must

10-17 be furnished within 10 business days after receipt of the request and

10-18 is binding on the association, the executive board and every unit’s

10-19 owner.

10-20 9. In a cooperative, upon nonpayment of an assessment on a

10-21 unit, the unit’s owner may be evicted in the same manner as

10-22 provided by law in the case of an unlawful holdover by a

10-23 commercial tenant, and the lien may be foreclosed as provided by

10-24 this section or by NRS 116.31162 to 116.31168, inclusive.

10-25 10. In a cooperative where the owner’s interest in a unit is

10-26 personal property [(] under NRS 116.1105 , [),] the association’s

10-27 lien may be foreclosed [in like manner] as a security interest under

10-28 NRS 104.9101 to 104.9709, inclusive.

10-29 Sec. 9. NRS 116.31162 is hereby amended to read as follows:

10-30 116.31162 1. Except as otherwise provided in subsection 4,

10-31 in a condominium, in a cooperative where the owner’s interest in a

10-32 unit is real estate [as determined pursuant to] under NRS 116.1105,

10-33 or in a planned community, the association may foreclose its lien by

10-34 sale after:

10-35 (a) The association has mailed by certified or registered mail,

10-36 return receipt requested, to the unit’s owner or his successor in

10-37 interest, at his address if known[,] and at the address of the unit, a

10-38 notice of delinquent assessment which states the amount of the

10-39 assessments and other sums which are due in accordance with

10-40 subsection 1 of NRS 116.3116, a description of the unit against

10-41 which the lien is imposed[,] and the name of the record owner of

10-42 the unit;

10-43 (b) The association or other person conducting the sale has

10-44 executed and caused to be recorded, with the county recorder of the

10-45 county in which the common-interest community or any part of it is

11-1 situated, a notice of default and election to sell the unit to satisfy the

11-2 lien, which contains the same information as the notice of

11-3 delinquent assessment, but must also describe the deficiency in

11-4 payment and the name and address of the person authorized by the

11-5 association to enforce the lien by sale; and

11-6 (c) The unit’s owner or his successor in interest has failed to pay

11-7 the amount of the lien, including costs, fees and expenses incident to

11-8 its enforcement, for 60 days following the recording of the notice of

11-9 default and election to sell.

11-10 2. The notice of default and election to sell must be signed by

11-11 the person designated in the declaration or by the association for that

11-12 purpose[,] or , if no one is designated, by the president of the

11-13 association.

11-14 3. The period of 60 days begins on the first day following the

11-15 later of:

11-16 (a) The day on which the notice of default is recorded; or

11-17 (b) The day on which a copy of the notice of default is mailed

11-18 by certified or registered mail, return receipt requested, to the unit’s

11-19 owner or his successor in interest at his address , if known, and at

11-20 the address of the unit.

11-21 4. The association may not foreclose a lien by sale [for the

11-22 assessment of] based on a fine or penalty for a violation of the

11-23 [declaration, bylaws, rules or regulations] governing documents of

11-24 the association [, unless the violation is of a type that threatens]

11-25 unless:

11-26 (a) The violation threatens the health, safety or welfare of the

11-27 residents of the common-interest community [.] ; or

11-28 (b) The penalty is imposed for failure to adhere to a schedule

11-29 required pursuant to section 1 of this act.

11-30 Sec. 10. NRS 38.300 is hereby amended to read as follows:

11-31 38.300 As used in NRS 38.300 to 38.360, inclusive, unless the

11-32 context otherwise requires:

11-33 1. “Assessments” means:

11-34 (a) Any charge which an association may impose against an

11-35 owner of residential property pursuant to a declaration of covenants,

11-36 conditions and restrictions, including any late charges, interest and

11-37 costs of collecting the charges; and

11-38 (b) Any penalties, fines, fees and other charges which may be

11-39 imposed by an association pursuant to paragraphs (j) [, (k) and (l)]

11-40 to (n), inclusive, of subsection 1 of NRS 116.3102.

11-41 2. “Association” has the meaning ascribed to it in

11-42 NRS 116.110315.

11-43 3. “Civil action” includes an action for money damages or

11-44 equitable relief. The term does not include an action in equity for

12-1 injunctive relief in which there is an immediate threat of irreparable

12-2 harm, or an action relating to the title to residential property.

12-3 4. “Division” means the Real Estate Division of the

12-4 Department of Business and Industry.

12-5 5. “Residential property” includes, but is not limited to, real

12-6 estate within a planned community subject to the provisions of

12-7 chapter 116 of NRS. The term does not include commercial property

12-8 if no portion thereof contains property which is used for residential

12-9 purposes.

12-10 Sec. 11. 1. The amendatory provisions of this act apply to

12-11 any violation of the governing documents of an association or

12-12 master association that occurs on or after October 1, 2003.

12-13 2. Notwithstanding any other law to the contrary, if the

12-14 provisions of the governing documents of an association or master

12-15 association do not conform to the amendatory provisions of this act:

12-16 (a) The nonconforming provisions of the governing documents

12-17 shall be deemed to have been conformed to the amendatory

12-18 provisions of this act by operation of law on October 1, 2003; and

12-19 (b) If the association or master association is associated with a

12-20 common-interest community that was created on or after January 1,

12-21 1992, the executive board of the association or master association

12-22 may change the nonconforming provisions of the governing

12-23 documents to conform to the amendatory provisions of this act. The

12-24 executive board of the association or master association may make

12-25 such changes without complying with any procedural requirements

12-26 that would otherwise apply if the executive board were to amend the

12-27 governing documents of the association or master association in

12-28 accordance with law.

12-29 3. As used in this section:

12-30 (a) “Association” has the meaning ascribed to it in

12-31 NRS 116.110315.

12-32 (b) “Common-interest community” has the meaning ascribed to

12-33 it in NRS 116.110323.

12-34 (c) “Executive board” has the meaning ascribed to it in

12-35 NRS 116.110345.

12-36 (d) “Governing documents” has the meaning ascribed to it in

12-37 NRS 116.110347.

12-38 (e) “Master association” has the meaning ascribed to it in

12-39 NRS 116.110358.

12-40 H