Abstract : The state of Nevada’s lack of effective enforcement by its sole homeowners’ association (HOA) regulator—arguably an abdication due to industry capture—combined with a dispute resolution process under NRS 38 that is nominally “mandatory” but functionally voluntary, has resulted in a heavy reliance on private lawsuits to enforce legal obligations in HOA governance. This model disproportionately burdens homeowners by cost-shifting and undermines equal justice due to broader administrative oversight failures. Legislative and structural reforms are needed to ensure accountability, transparency, proper exercise of enforcement mechanisms, and activation of currently dormant tools. Just as parks, streets, sewers, and water have undergone privatized cost-shifting, so too has HOA justice—warranting greater scrutiny.
INTRODUCTION
The Mirage of Legal Protections
In Nevada, civil litigation has become the default mechanism for enforcing rights and resolving disputes among homeowners, associations, and developers. In Nevada, over 50% of homes and nearly 80% of new housing in Las Vegas are located in HOAs. Living in an HOA is often not a private choice.
Accordingly, HOA governance is not strictly a private matter. The state has its hand in nearly all aspects of how HOAs function. The Nevada Supreme Court has characterized HOAs as “quasi-governmental” entities [i]. Legal scholars, such as Evan McKenzie in Privatopia: Homeowner Associations and the Rise of Residential Private Government, have long warned that HOAs function as “private governments without the constitutional limitations” of public ones.
The Nevada Real Estate Division (NRED), along with the Commission for Common-Interest Communities and Condominium Hotels (CICCH Commission), is charged with administering NRS 116. The statute authorizes them to “do all things necessary and convenient” to carry out its provisions.
Critics—myself including —argue that NRED is a captured agency. Training sessions for the Commission are often conducted by attorneys and managers who appear before it, raising serious conflict of interest concerns.
The systemic limitations in Nevada’s alternative dispute resolution system and an ideological reliance on private civil litigation—a trend not unique to Nevada— produces a de facto system of unequal justice. For many homeowners, the protections promised under NRS 116 are illusory. Rights exist on paper but are inaccessible in practice. Nevada created a quasi-governmental regime, but privatized enforcement, effectively cost-shifting the burden to HOA owners.
Delegation of Authority: The Quiet Shift of Power
One of the core structural problems in Nevada HOAs- but again, not unique to Nevada- is the informal but systemic delegation of decision-making authority from elected volunteer boards to contracted managers and attorneys. This dynamic raises several governance and accountability concerns:
Volunteer boards often lack time, expertise, or confidence, particularly in larger or more complex associations.
In practice, industry professionals—namely community managers and HOA lawyers—take over the governance role, advising (and often directing) decisions on enforcement, budgeting, elections, rule interpretation, and litigation.
These professionals wield substantial influence over enforcement actions, meeting agendas, and association strategy.
Boards may be captured by vendor relationships, where legal counsel and managers act to protect their own contracts and industry norms rather than the interests of homeowners.
This creates a conflict of interest: managers and attorneys are paid by the association but may guide actions that primarily serve to minimize liability, suppress dissent, or insulate board members, rather than ensure transparency or equity.
The cost of this outsourced governance is ultimately borne by homeowners, including when legal disputes are unnecessarily escalated, or when enforcement is pursued selectively or aggressively.
Privatizing Enforcement
Access to justice is not just a slogan—it is a right.
Nevada offers a robust statutory framework for common-interest communities under NRS Chapter 116, outlining clear duties for developers, associations, and unit owners. Arguably they are some of the best in the country. These laws promise transparency, fairness, and fiduciary integrity. Yet enforcement has largely been abdicated by NRED.
Things frequently go sideways in HOAs—and sometimes it feels by design:
HOAs function simultaneously as nonprofit corporations and quasi-local governments, creating overlapping and unclear responsibilities.
Boards are often composed of volunteers who lack the training and incentives to govern effectively.
Financial, time, and logistical constraints lead many boards to outsource decision-making to managers and attorneys.
Enforcement tools such as fines, liens, and foreclosure are private legal actions, often applied selectively or excessively, lacking the procedural safeguards of municipal enforcement.
This strange hybrid structure allows the quiet shifting of public responsibilities to private actors—without the usual checks and balances of public institutions.
Despite having one of the most robust administrative frameworks for handling HOA disputes in the country, Nevada has effectively abandoned it:
The CICCH Commission is a seven-member panel appointed by the Governor, responsible for adjudicating disputes after NRED investigates for finding of “due cause.” It:
Offers specialized expertise in NRS 116.
Provides low-cost and accessible dispute resolution.
Is faster than district courts.
Holds public hearings with transparent outcomes.
Has real enforcement authority.
Importantly and the most desirable attribute- in the opinion of this author--is the State, not owners, serves to defend civil challenges to rulings and administration.
But:
It is vulnerable to regulatory capture, where insiders influence access.
Jurisdiction is limited: despite possessing the expertise and understanding of the nuances of HOAs, it typically cannot adjudicate violations of CC&Rs, which are treated as mere private contracts, despite functioning as “constitutions” of the community.
It has effectively ceded authority:
The Commission lacks internal legal counsel and depends on the Attorney General’s office.
NRED limits access and ability to compel compliance.
Staffing levels at NRED are insufficient for proactive enforcement.
The Ombudsman serves more as a librarian than as an advocate or independent authority.
As a result, homeowners must file lawsuits for violations of governing documents or failures to act in good faith—even when boards clearly breach fiduciary duties under NRS 116.3103.
Developers and declarants often require associations to sue on their behalf for construction defects or mismanagement, compounding legal and financial strain.
This system shifts the burden of upholding public-interest laws to those least equipped to bear it. Justice becomes a function of wealth, persistence, or sheer luck. The state has created a legal framework but refuses to fund its enforcement.
Administrative vs. Litigation Models
Administrative enforcement (e.g., agencies or commissions) requires staffing and public resources. Litigation is user-funded. Courts already exist for other purposes, making them a cost-efficient—but slow and inequitable—venue for civil disputes.
Justice becomes a consumer good, available only to those who can afford lawyers, expert witnesses, and years of litigation. This mirrors trends noted in administrative law literature, particularly by Boyack (2013), where governments outsource enforcement to reduce political and fiscal liability.
Conservative Governance Ideology
Nevada’s preference for small government and market-based solutions drives its overreliance on civil litigation. This allows legislators to appear responsive—by enacting laws—while avoiding responsibility for enforcing them. They can claim that “the law exists,” sidestepping the fact that it’s functionally meaningless without enforcement.
Legal Inequality in Practice
The civil litigation model assumes equal access to legal representation and understanding. That assumption fails in the HOA context:
Homeowners often lack resources to fight developers or associations backed by industry lawyers, insurance, and collective funds.
During declarant control, any legal action against an association is effectively against the developer—escalating costs through “prevailing party” clauses.
Legal aid is rare for civil cases, especially long, complex HOA disputes.
ADR through NRED is limited, non-binding, and ineffective in addressing major issues like fraud, structural defects, or developer abuses.
Ultimately, the state offers rights without remedies—a facade of protection with no institutional support.
Judicial Culture and Industry Influence
The legal profession supports litigation—it’s the backbone of private practice. Judges and lawyers are trained for adversarial justice, not bureaucratic resolution. Courts often resist administrative expansion, seeing it as encroachment.
Privatized enforcement is a great deal for the industry—if we let them have it. HOA law must evolve into a publicly enforceable regulatory regime. Given the scale and ubiquity of HOAs, this is not optional.
Consequences for Nevada Homeowners
For the more than half of Nevadans living in HOAs, this model produces deep harm:
Dispute fatigue: The toll of asserting one’s rights discourages engagement.
Legislative fatigue: Lawmakers show visible frustration with HOA bills, while failing to hold agencies accountable (e.g., CIC Task Force inaction).
Unequal outcomes: Deep-pocketed entities can outlast or intimidate individual litigants.
Regulatory stagnation: Legacy infrastructure problems, mismanagement, and developer abuse fester until they reach crisis levels.
The law becomes reactive instead of preventive, and enforcement falls on those least able to act.
Short Trial Program (STP)
The STP ( NRS 38.258) is not part of the current mandatory pre-litigation process for disputes of NRS 116- - but it should be. Violations of NRS 116 are exempt from mandatory arbitration but parties can agree to resolve the dispute through STP. The need for all parties to agree is the issue- especially for deep pockets seeking to weaponize litigation costs. STP offers a faster and more cost-effective alternative to traditional litigation- should all other options fall short.
STP is:*
Designed to expedite civil litigation by offering a streamlined trial process.
Proven effective - 93% of cases currently in STP are resolved without further litigation.
Conducted by either a district court judge or a pro tempore judge.
Trials are typically scheduled within 120 days after the assignment of the presiding judge.
Trial Format: each side is generally allotted three hours to present its case, including opening statements, witness examinations, and closing arguments.
Trials are usually conducted with a four-member jury, unless otherwise stipulated.
Judgement Limits unless the parties agree otherwise, may not exceed $50,000 per plaintiff, exclusive of attorney’s fees, cost, and prejudgment interest.
*(Full presentation on AB3(2025) here)
Mandates could require Nevada’s STP in lieu of arbitration without the current: "opt out” option- post-exhaustion of all administrative options, where no damages are asserted or are less that $50,000.
Recommendations
A restructured and strengthened administrative framework should:
Reconstitute the CIC Task Force (per Sec 1.7, SB 391(2019))
Address perceptions—and realities—of regulatory capture.
Legislative action (NRS 116 or NRS 38.300) related to use of Nevada’s STP (NRS 38.258)
Require public access to enforcement records, redacted as needed (NRS 116A.270(2)).
Expand CICCH Commission authority to impose fines or require restitution.
Focus on proactive compliance with NRS 116.
Require HOAs to respond to owner claims (like NRS 41.036 does for governments).
Conduct random and targeted audits of HOA finances.
Consider binding arbitration (NRS 38.258) for disputes under $50,000—faster and cheaper than court.
Allow for private attorney general actions, empowering owners to sue on the public’s behalf when regulators fail.
Overall, treat HOA governance as quasi-public and deserving of public accountability—not a private enclave exempt from oversight.
Conclusion
Reclaiming the Public Interest in Private Governance
Nevada’s reliance on litigation to enforce HOA law is a retreat from its duty to ensure equal justice. It prioritizes institutional strength over legal merit and makes rights meaningless for many. As HOAs become the norm—not the exception—state law must shift from a litigation model to an accessible, accountable, and publicly funded enforcement system.
It’s time for Nevada to not just declare homeowners’ rights—but to actually protect them.
Mike Kosor
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[i] Kosor v Olympia Companies LLC and Gary Goett (2020), 136 Nev at 709 quoting Damon, 191 Cal.Rptr at 214.
