Declarant control in a homeowners association (HOA) under the Uniform Common Interest Ownership Act (UCIOA) refers to the period during which the developer (called the “declarant”) retains certain rights to manage or control the community before full governance is turned over to the homeowners. This concept is foundational in common-interest communities and is governed primarily by UCIOA § 3-103.
Nevada adopted a version of the UCIOA in NRS Chapter 116, and NRS 116.31032–116.31038 mirror these declarant control provisions. Nevada law also places additional disclosure and accountability obligations on declarants to prevent overreach during the control period.
But is it working and/or is it enough? The Coalitions does not think so.
Definition and Purpose
• The declarant is typically the developer who creates the common-interest community.
• Declarant control is a set is a set of authorites the developer maintains with respect to an HOA's governance (e.g., to appoint the majority of board of directors). The rationale is that the developer has a vested interest in maintaining order, completing construction, and marketing the project.
By Nevada law, a declarant (developer) can appoint board members during a specified period of time. This is casually referred to as the "declarant's control" period.
It is often said that “developers have a lot of voting rights because they still own a bulk of the community property.” That is not necessarily true.
A developer may not own any material amount of property in the association at all. The key word is "in" — meaning property formally annexed into the association- a Developmental Right.
In practice, developers often keep property they plan to annex outside the association until it is sold to a builder or final homeowner. By holding land (or “units”) in this way, they avoid paying assessments to the association — among other advantages.
The law and the CC&Rs provide other authorities to a developer often overlooked.
Where misunderstanding typically exits is the fiduciary duties of declarant-appointed directors
• During the control period, the declarant “…may appoint and remove the officers of the association and members of the executive board.” NRS 116.31032(1)
• While a declarant retains “special declarant rights” it can “Appoint or remove any officer of the association or any master association or any member of an executive board during any period of declarant’s control.” NRS 116.089
• Nonetheless, even during the control period, directors appointed by the declarant owe fiduciary duties to the association and its members. They should not act solely in the declarant's interest. Even while the community is under declarant control, the declarant and its appointed directors owe fiduciary duties to the owners, akin to those of a trustee.[1]
• This is intended to prevent abuse and aligns with broader principles of corporate and fiduciary governance.
But does it work?
Policy Rationale
• Pros: Gives the developer time and authority to complete infrastructure, set community standards, and stabilize finances.
• Cons: If not properly limited, it can lead to abuses of power, especially regarding budget manipulation, improper reserves, or conflicts of interest in contract approvals. It cuold also mean even if the developer no longer has a seat on the board, it can control most of the levers of governance.
Key implications:
• Declarant-appointed directors have heightened fiduciary duties equivalent to trustees, not merely the duty of ordinary corporate officers.
• These duties are owed to the association as a whole, meaning all unit owners—not just the declarant.
So when you hear a declarant in control, that may mean a number of things. He/she gets to appoint directors- who then must act in the best interest of the association. Which may or may not be in the declarant's best interest.
Also keep in mind control is a legal construct, not simply a matter of ownership. The law allows developers to reserve a package of contract rights in the declaration that gives them governance authority regardless of whether they own many units, few units, or even none at all.
Lastly, the legal requirement that appointed directors owe fiduciary duties to the HOA is often undermined in practice when those directors have employment or financial ties to the declarant. This disconnect between legal form and practical control is a significant governance vulnerability in common-interest communities and merits deeper analysis.
When the Uniform Law Commission (ULC) first drafted the UCIOA, it emphasized that declarant-appointed directors should be held to trustee-level duties, because they were exercising control on behalf of owners during the development phase. Nevada’s lawmakers went even further. Instead of limiting trustee-like duties to declarant appointees, Nevada flattened the rule and applied fiduciary obligations to all directors, whether appointed or elected. In doing so, Nevada signaled that every board member must act with loyalty, care, and good faith toward the association and its members—not as an agent of the developer.[2]
The declarants authority over an HOA rests in the declarant and special declarant rights as defined by NRS 116 and typically contained in the contract (CC&RS). For a deeper diver see the post When Elections Can Be Merely Symbolic.
___________
[1] To our knowedge no Nevada appellate court has directly ruled that declarant-appointed directors stand in a trustee relationship with the association. But the statutory framework imposes fiduciary duties that are functionally equivalent. NRS 116.3103(1) requires all directors to act “on behalf of the association,” and NRS 116.31034(9) requires declarant appointees to “act in good faith and in a manner [they] reasonably believe to be in the best interests of the association.” Overlaying this is NRS 116.1113, which imposes a duty of good faith and fair dealing on every duty and contract under Chapter 116. Taken together, these provisions establish duties of honesty, loyalty, and care that mirror those of trustees.
The Uniform Law Commission, in its Official Comment to UCIOA § 3-103 (1982), explicitly noted that declarant-appointed directors should be held to “the standard of care applicable to trustees,” while owner-elected directors could be judged under the business judgment rule. Nevada, however, did not adopt this distinction: its 1991 enactment of NRS 116 imposes fiduciary obligations on all directors alike.
Courts in other UCIOA jurisdictions have recognized the trustee-like role of declarant appointees. See Dolan v. Villages of Marlborough Condo. Council of Unit Owners, Inc., 664 A.2d 1188, 1193 (Md. Ct. Spec. App. 1995) (owner-elected directors cannot be removed by the declarant, since doing so would “nullify the statutory guarantee of owner representation”); Comm. for a Better Twin Rivers v. Twin Rivers Homeowners’ Ass’n, 929 A.2d 1060, 1075 (N.J. 2007) (association boards “stand in a fiduciary relationship with their members”). Scholars also describe HOA directors as “trustee-like” managers of community assets. See Paula A. Franzese, Common Interest Communities: Standards of Review and Review of Standards, 3 Wash. U. J.L. & Pol’y 663, 669–70 (2000); Susan F. French, The Uniform Common Interest Ownership Act: Reconciling Community Association and Land Use Controls, 38 Real Prop. Prob. & Tr. J. 397, 452–54 (2003).
Thus, even if Nevada’s statutes avoid the label “trustee,” the combined weight of UCIOA commentary, Nevada’s fiduciary language, and persuasive authority elsewhere confirms that declarant appointees are legally obligated to act for the benefit of the association and its members, not the developer — a role akin to that of a trustee.
[2] In my view, the Uniform Law Commission got this part right. Declarant-appointed directors should be held to trustee-level duties because of their close relationship with the developer and the inherent conflict of interest that arises during the period of declarant control. Their role requires a heightened level of loyalty and impartiality, since they are positioned between the developer’s private interests and the community’s collective interests. I do not agree, however, that owner-elected directors should be held to the same trustee standard. These directors are chosen by and accountable to their neighbors, and while they must act in good faith and with due care, it is unrealistic — and, in practice, chilling — to expect unpaid volunteer owners to carry the same level of fiduciary burden as a trustee. Nevada’s flattening of the UCIOA framework, which imposes trustee-like duties on all directors alike, may have overcorrected by treating owner-elected volunteers as if they were professional fiduciaries rather than community representatives.
**We are not attorneys and any written or electronic communications is provided here or on this site as a service to the internet community. Any advice that is provided on this site is based on our experience. Consult an attorney for legal advice..
