Law Reform Needed

​​​

A) Enforcement and adjudication (a recommend read and primer plus my June 12, 2025 letter to the CIC Commission seeking it obtain an AG opinion in light of the Department of Business and Industry Feb 2025 Memorandum.)

1. Delete the confidentiality status (i.e. make public, with personal information redaction) of complaints, documents, and information filed with the Nevada Real Estate Division (NRED) related to HOAs (see NRS 116A.270(2) & failed SB 221(2025)). This is necessary to provide transparency, help inform owners, and hold NRED accountable for complaint investigation findings (or lack of). Read a request for an AG opinion here.

2. Exclude associations from bringing litigation against owners to enforce Nevada statutes. Attorney fees weaponized by rouge boards and/or developers can be used to chill owners from seeking enforcement of association violations. (NRS 116.4117 & NRS 116.31088) Read more here.

3. Codifying Nevada Supreme Court's rulings finding HOAs are "quasi-governmental" entities. HOAs are typically formed as nonprofit corporations while "legislation sponsored nonprofit organizations." As such, what are the implications in using these monikers? For example, First Amendment (anti-SLAPP) protects, "open meetings", elections rights, etc. NRS 116 should conform.  Read more here.

4. Declarants should not be permitted to simply copy provisions of Nevada law into their declarations, to enable invoking prevailing party provisions in the declaration. Doing so chills owners from asserting allegations of statute violations by the HOA or declarant. (A proposed statute change is in construction) Read more here

5. Prohibiting boards or management company from hiring an affiliated contractor or immediate family members. Read more here

 

B) Reform HOA laws

1. End a declarant's (developer's) ability to unilaterally remove directors elected by owners during the period of declarant control. (see NRS 116.31032 & NRS 116.089) 

2. Prohibit a board from approving contracts and/or payments exceeding an aggregate amount (TBD), except in an emergency, outside a scheduled meeting of the board.The intent is preclude decisions by the board outside a regular meeting, often authorized in the CC&RS, to ensure all owners are aware having an opportunity to have their voice heard prior to a decision. Read more here. 

3. The Legislature must reassert its authority and correct a Nevada Supreme Court ruling on the jurisdictional intent of Nevada's alter dispute resolution (ADR) statute NRS 38.310. See the blog post Nevada Supreme Court Ignores the Law on HOA Disputes—Legislature Overruled.

4. Prohibit local governments from requiring the creation of an HOA — or requiring common property that would necessitate an HOA — as a condition for approving a development, getting a building permit, and/or getting services. Developers could still voluntarily create an HOA. 

5. Mandate HOAs provide a reasonable method for unit’s owners to communicate among themselves and the executive board on matters concerning the association. It is vital for a functioning democracy, enabling informed owners, holding power accountable, and facilitating public discourse and participation. (A proposed addition to NRS 116.3102)

6. Mandate boards provide owners with an approved list of expenditures from the reserve account for the upcoming year as part of the annual budget. Many HOAs get into financial trouble from using reserves as a piggy bank to fund current expenses failing to recognize the implications. (see NRS 116.31151)

7. Limit the collective unit ownership of an entity in HOAs to address corporate takeovers of nonprofits- suggesting 25%. Limits are needed to curtail a single entity from exerting undue influence over the HOA's decision-making or operations, potentially harming other owners. See SB 239(2025) for a similar, albeit failed, effort to address corporate ownership of housing in Nevada.

8. Declarant can record an amendment to the declaration changing material provision without a vote of owners provided it is not challenged in 12 months- a statute of repose. This was never the intent of the law. (see NRS 116.2117) 

9. Prohibit associations from imposing new use restrictions, obligations, or liabilities on a unit owner beyond those initially identified in the declaration at the time of purchase (see NRS 116.2117). This should not be permitted without the consent of owners adversely affected. Doing so infringes on property owners’ expectations at purchase. Entirely new/different provisions untethered to an original covenant should be precluded.

10. Address a declarant's ability to “exaggerate”/overstate the maximum number of units planned for a community and/or vaguely define that number such as to indefinitely retain control (see NRS 116.31032 & NRS 116.2105). 

11. Require a declarant provide owners at least annually and all prospective buyers a good faith estimate when it's control of the association is anticipated to end.

12. Preclude declarant’s/developers’ ability to reserve for themselves rights within the declaration that extend far beyond their declarant control period. See some of those right reserved in my HOA's "Declarant's Rights Period". With these extended rights a declarant can veto owner approved amendments to the declaration, rules & regulations, changes to the ARC, etc., beyond the termination of the period of declarant's control (see NRS 116.211 & NRS 116.089).

13. Prohibit declarant controlled boards from contracting with the declarant's wholly owned management company leaving owners with no true fiduciary oversight of the community's governance. (see NRS 116.31086).

14. Prohibit an associations board from restricting a candidate's ability to provide campaign material to unit's owners (see NRS 116.31034).

15. Make it easier for owners to know when a declarant adds acreage to an association - to enforce limits on adding acreage in excess of the 10% maximum allowed under the statute. A simple fix is provided. (see NRS 116.2105)

16. Sections of NRS 116 addressing board conflict of interests are conflicting and ambiguous. Directors encountering a potential conflict of interest should simply be required to recuse. This situation should not make the director ineligible to serve and/or he/she be removed from the HOA's governance (see NRS 116.31034(10)(a) and NRS 116.31084)? Read more here.

17. Changes to Nevada law should not automatically causes a provision of an HOA's governing documents to be ineffective.  Statutes and governing documents grant homeowners the power to amend their recorded covenants, and further protect lot owners from having new and affirmative restrictions placed on their lot without their written consent. The terms of declarations, unless deemed unconscionable or unconstitutional should not be altered (except as provided under state emergency powers). Thus, statutory changes that impact HOA declarations should require a specific action/acknowledgment of a legislative intent to do so.

18. Place limits on a reserve special assessment a board can pass without an owner vote. Currently, none exists.

19. Board meeting notices must include copies or documents that will be discussed at the meeting or provided direct electronic access (i.e via website, etc.)

20. When changes are enacted to NRS there is no requirement to inform owners nor amend affected declaration- the provision is deemed to conform by operation of law (see NRS 116.1206). Associations should be required to amend the governing documents to remove an unlawful restriction and generally comply with NRS and notify owners.

21. Prohibit HOA boards from gathering in secret to discuss community business- using "workshops"- where owners are not noticed and not allowed to attend (see NRS 116.31083) Specific proposed statute changes are found here.

22. Codify HOA virtual meetings criteria (NRS 116.31083). Require HOA boards regularly meet together in person where owners observe deliberations and can address their governance issues in person. Failure to do so impacts due process, effective communication. Read more here.  

23. HOA elections should be conducted and/or overseen by an "independent reviewer". But no such requirement(s) exist. As a default the community manager, who have been contracted by the incumbent board, typically has the exclusive control of executive board elections. 

24. Prohibit a declarant from appointing an employee or affiliate as director after reaching a 25% buildout. See this post