HSW Is Not a Blank Check for HOA Fine Authority

Most Nevada HOA owners know an association can impose fines for violations of the governing documents. Far fewer understand the statutory limits on that authority or what is currently being proposed.

NRS 116.31031 generally permits an HOA board to impose a fine against a unit owner, tenant, or invitee for a violation of the governing documents if the governing documents allow fines. For ordinary violations, the fine must be commensurate with the severity of the violation, but it may not exceed $100 for each violation or a total of $1,000, whichever is less.

That limit is important. It reflects a legislative judgment that HOA fines may exist, but should remain limited.

But NRS 116.31031 was amended nearly two decades ago by SB 325 (2005), creating a major exception. If the violation “poses an imminent threat of causing a substantial adverse effect” on the health, safety, or welfare (HSW) of the units’ owners or residents, the ordinary $100-per-violation and $1,000-total limits do not apply.

That means a violation labeled as HSW may carry no ordinary statutory fine cap. The label does not merely describe the alleged violation. It can remove the protection that normally limits HOA fines.

Possible under current Nevada law

That is where the problem begins.

The Obvious Questions: What Is HSW, and When Is It Imminent?

At this point, a reader may reasonably ask: what exactly counts as health, safety, or welfare? And when does a violation become an imminent threat?

Those are not academic questions. They are the questions lawmakers directed the Commission to answer by regulation in SB 72 (2021).

NRS 116.31031 does not simply remove the ordinary fine cap and leave everything to the board’s discretion. The statute explicity directs the Commission to do three things:

1. establish the criteria used in determining whether a violation poses an imminent threat of causing a substantial adverse effect on health, safety, or welfare (HSW);

2. establish the severity of such violations; and

3. establish limitations on the amounts of the fines.

That first task necessarily requires defining HSW. The Commission cannot reasonably establish criteria for determining when a violation poses an imminent HSW threat without first explaining what health, safety, and welfare mean in this context.

That structure matters.

The statute recognizes that more than a label is needed. Boards, owners, managers, hearing panels, regulators, and courts need criteria. Not every claimed HSW concern is equally serious. And there must be limits on the amounts of the fines.

If lawmakers had intended HOA boards have open-ended HSW fining authority, there would be little reason to direct the Commission to adopt limitations on fine amounts. The existence of that mandate confirms the point: the HSW exception was not intended to be a blank check.

Yet that is the practical risk today. The ordinary statutory cap is removed when a board classifies a violation as HSW, while the substitute safeguards the statute calls for have not been meaningfully supplied. Owners are left facing enhanced fines based on an undefined or underdefined label, unclear criteria, undeveloped severity standards, and no meaningful regulatory limits on fine amounts.

Nor is there a clear public answer to a basic question: how often are associations using the HSW label? Because HOA fines are imposed at the association level, and because there does not appear to be a centralized public reporting system identifying when boards classify violations as HSW, the scope of the practice is largely unknown. That uncertainty is itself part of the problem. A category that removes ordinary statutory fine limits should not operate without visibility into how often it is being used.

The Board Acts First. The Owner Defends Later.

A definition alone would not fix that problem. Defining HSW would help narrow the label. But the statute requires more than a definition. It requires criteria, severity standards, and fine limitations.

The practical problem is that the board applies the label first. The owner’s remedy comes later. In theory, an owner may challenge an abusive fine through litigation. In practice, that protection is illusory.

Consider speeding in a gated community with private roads.

An association may have authority under its governing documents - which most do- to adopt and enforce reasonable speed rules on association-controlled roads. But that does not answer the HSW question.

For an ordinary violation, NRS 116.31031 limits the fine to $100 per violation or $1,000 per hearing. So if an owner exceeds a posted HOA speed limit, the association may be able to treat that as an ordinary rule violation, but the ordinary statutory cap should apply.

The problem arises when the board labels the speeding violation as HSW. A minor speeding violation and a continuing, objectively dangerous condition are not the same thing. Driving slightly over a posted private-road speed limit may be unsafe, but it does not necessarily “pose an imminent threat of causing a substantial adverse effect” on health, safety, or welfare.

Without clear criteria and fine limitations, a board could use the HSW label to convert an ordinary traffic-rule violation into an enhanced fine. That is exactly why NRS 116.31031 requires regulations addressing criteria, severity, and limitations on fine amounts.

Imagine a traffic law that prohibited “excessive speed” in the name of safety, but did not clearly state the speed limit or the fine. Instead, the traffic officer decides after the fact whether the driver’s speed was excessive “for safety” and also decides the associated fine. The driver can challenge the ticket and fine in court, but only after the ticket has been issued, time has been spent, and costs have begun.

That would be weak protection.

Due Process

Once the board classifies a violation as HSW, the ordinary statutory fine cap no longer protects the owner. The owner may later argue the condition was not imminent, not substantial, not objectively dangerous, not within the owner’s control, or not really an HSW matter at all. But the burden has shifted. The owner must defend after the label has already been applied.

One longtime Nevada HOA attorney who specializes in representing associations recently made the point directly. Despite a career representing HOA boards, he warned that the HSW fine process is “already burdened with systemic unfairness.”

His concern was straightforward. The board decides whether to send the violation notice. The board decides whether a violation occurred. The board decides whether the conduct qualifies as an imminent health, safety, or welfare threat. The board decides the amount of the fine. Then the same board hears the owner’s challenge.

The structural problem is the fact that the board making the allegation is also the body adjudicating it. There is no neutral fact-finder, no discovery, and no meaningful cross-examination. The board defines the standard, evaluates the alleged violation, determines whether the HSW classification applies, and imposes the fine — all in the same proceeding.

That is the due process problem. Even if HOA enforcement proceedings are not treated the same as court proceedings, the fairness concern is obvious. The same body should not act as investigator, prosecutor, judge, and penalty-setter when thousands of dollars may be at stake.

That attorney went further. He described the HSW fine authority as “the single greatest avenue for abuse” in the statute and explained that he had ended client relationships over how boards used it, including a case where directors were physically looking over backyard walls to find violations and then serving as the adjudicators of the fines they initiated.

That is the core issue. The HSW exception does not merely allow higher fines. It allows the board to decide for itself that the higher-fine category applies. Without neutral review before the fine becomes final, the owner’s protection comes too late. The cost, pressure, and leverage have already been created.

At a minimum, any HSW fine above the ordinary statutory cap should require review by a neutral decision-maker before it becomes final. That review should decide both questions the board currently decides for itself: whether the HSW classification is justified, and whether the proposed fine is proportional to the actual severity of the violation.

Nor is court review an adequate answer.

In theory, an owner may challenge an abusive fine through litigation. In practice, that protection is often illusory. A $5,000 fine may be financially painful, but it is rarely large enough to justify the cost, risk, and time of a court case. The owner must spend personal funds to challenge the board’s action. The board, by contrast, defends its decision using association funds collected from all owners — including the owner being fined.

An owner who challenges a $5,000 fine may risk far more than $5,000. If the court finds for the association, the association will likely claim prevailing-party status and seek recovery of its attorney’s fees from the owner. In most HOA disputes, that fee exposure will exceed the amount of the fine many times over. That risk changes the calculation. The owner is not merely deciding whether the fine is lawful. The owner is deciding whether challenging the fine could expose the owner to a financial loss far greater than the fine itself.

There is also a practical representation problem. HOA law is a specialized field. Most attorneys who know the HOA field exclusively represent associations, boards, managers, or industry clients. Owners facing high-dollar HSW fines may have difficulty finding experienced counsel willing to take the case, especially where doing so could alienate the same association-side clients that sustain an HOA practice.

That is why after-the-fact court review is not enough. The safeguard must come before the fine becomes final, before the leverage has shifted, and before the owner is forced to choose between paying an allegedly abusive fine or risking even greater litigation exposure.Many, including this author, would argue that HSW should not remove the ordinary fine cap at all. If the danger is real, the remedy should be cure, abatement, referral, injunction, or recovery of lawful abatement costs — not uncapped punishment by a private residential board.

But if Nevada retains the HSW exception, and if that label continues to remove the ordinary cap, then the criteria for using it must be narrow, objective, and difficult to manipulate.

The Trigger Is Not Merely “HSW”

The statutory trigger is not simply whether a violation can be described as involving health, safety, or welfare. The trigger is whether the violation poses an imminent threat of causing a substantial adverse effect on health, safety, or welfare.

That language should do real work.

A violation may involve safety in a broad sense without presently posing an imminent threat. A completed act may have been dangerous without remaining within the owner’s control. A condition may alarm neighbors without creating an objective, immediate, substantial danger. And a dispute may affect someone’s sense of comfort without becoming an HSW matter.

The present-tense word “poses” is important. It points to a current condition or ongoing violation, not merely past misconduct. The statutory trigger should require a present, objective, non-speculative danger that remains within the owner’s ability to cure or control.

At a minimum, the criteria should require:

1. an ongoing or continuing condition;

2. an objective danger, not subjective discomfort;

3. a direct causal connection between the violation and the danger;

4. a substantial adverse effect, not a minor or speculative concern; and

5. present ability by the owner, tenant, or guest to cure or control the condition.

Without those criteria, the HSW label can become the mechanism by which ordinary fine limits disappear.

Dangerous Conduct Is Not Always an HOA HSW Fine Case

Consider a gun fired in a backyard.

Most people would agree the conduct raises serious safety concerns. It may violate criminal law. It may justify law-enforcement response. It may also violate the governing documents.

But if the shot has been fired and the act is over, what exactly does an enhanced HOA fine cure?

The completed act may have been dangerous. It may have terrified neighbors. But the owner no longer controls the completed shot. The danger or actual damage from that act has passed. The HOA may document the incident, report it, and pursue ordinary remedies where authorized. But the completed act should not automatically be treated as a continuing condition that presently “poses” an imminent threat for enhanced HOA fine authority.

Now consider a different example: an owner operating a backyard gun range.

That is not merely a completed act. It is an ongoing or recurring use. The condition remains within the owner’s control. The risk may be objectively identifiable and continuing. The owner can stop the use. That example comes closer to what “poses an imminent threat” should mean.

But even here, the larger policy question remains: should a volunteer HOA board have special fine authority over dangerous conduct or conditions that already fall within Nevada’s civil, criminal, code-enforcement, nuisance, abatement, fire-safety, law-enforcement, and court systems?

Bad Conduct Is Not Always HOA Fine Authority

The same point can be seen with conduct everyone agrees is serious.

Nevada would not ordinarily expect an HOA to fine an owner for burglarizing a neighbor’s home. Burglary is serious. It affects safety. It may terrify the community. But it belongs in the criminal and civil justice systems, not in a parallel HOA punishment system.

The fact that conduct affects safety does not mean an HOA board should become a second police department, prosecutor, hearing officer, and punishment authority.

That caution should guide HSW fine authority.

If conduct or a condition is serious enough to implicate health, safety, or welfare in the ordinary public sense, Nevada should first look to the systems designed for that purpose: police, fire authorities, code enforcement, health authorities, nuisance law, injunctions, abatement, and courts.

HOA boards may have a role. But that role should be limited and carefully defined.

The Risk of Weaponization

The concern is not only that HSW is undefined. The concern is that a broad or poorly defined standard can be weaponized.

Boards could abuse HSW

Most HOA boards will not try to misuse the HSW label. But HOA law should not be designed only for well-functioning boards. It must also protect owners from the smaller number of cases where a board is angry, retaliatory, poorly advised, overly aggressive, or willing to stretch the law to gain leverage over a homeowner.

That risk is real because HSW can sound broader than it should be.

Without objective limits, “welfare” can be used to describe almost any claimed community concern: aesthetics, property values, neighbor discomfort, criticism of the board, personality conflict, persistent complaints, or an owner who is simply viewed as difficult.

That is dangerous.

A homeowner’s speech, tone, criticism, desire for record access, campaign activity, or sharp disagreement with the board should not be transformed into a health, safety, or welfare issue merely because someone says they felt threatened, uncomfortable, or harmed.

A knife can be a safety issue. A sharp tongue should not.

If HSW Remains, It Must Be Narrow

HSW should be confined to actual, observable conditions that presently pose an imminent threat of substantial harm and remain within the owner’s ability to cure or control. It should not include ordinary covenant violations, aesthetic disputes, interpersonal conflict, criticism of the board, records requests, campaign activity, or subjective claims of discomfort.

The Commission should do three things:[1]

First, it should complete the statutory framework NRS 116.31031 requires: criteria for determining when a violation poses an imminent threat, standards for severity, and limitations on the amounts of fines. That work is overdue and without it, all three criteria, the HSW exception leaves too much discretion in the hands of private boards.

Second, there is a board-decision review problem. Nevada does not merely rely on the business judgment rule as a court-created common-law doctrine. NRS 116.3103(1)(a) places the business judgment rule (BJR) in HOA law itself, but does so without defining it. In common-law usage, BJR generally means courts should not second-guess a board decision.

That matters here. Absent a regulation or court ruling on point, addressing how BJR applies to HSW determinations, a board may decide that an alleged violation is serious enough to remove ordinary fine limits and then later argue, if challenged, that its HSW determination is entitled to business-judgment deference.

Reform of Nevada’s broader use of BJR in HOA law is an important and long needed Commission topic, and a larger legislative question. In this rulemaking, however, the Commission can and should address the narrower problem. If HSW remains in HOA fine law, the regulation should state that the board’s threshold determination that a violation poses an imminent threat of causing a substantial adverse effect on health, safety, or welfare is not a discretionary business judgment protected by BJR deference. That threshold determination should be tested against the objective criteria, severity standards, and fine limitations adopted under NRS 116.31031.

Otherwise, the regulation may define HSW on paper while allowing the board’s own HSW label to receive deference in practice.

Third, and I suggest the best route, the Commission should consider asking lawmakers to reconsider the HSW exception itself. The policy question is larger than rulemaking. It is not solved merely by requiring the threat to be objective, present, substantial, and owner-controllable. The HSW exception was not intended to punish. Yes, criteria is necessary if the HSW exception remains in the law. But they do not answer the larger policy question: should HOA boards have this special authority at all?

That question matters because HSW authority asks a private residential board to make judgments that normally belong to public or judicial systems. Even when directors are elected, they are often volunteers and neighbors with little or no experience in adjudicating health-and-safety disputes, weighing evidence, applying legal standards, or setting punitive fines.

The concern becomes even more serious during declarant control, when unelected developer appointees may make that decision for residents who did not choose them.

Giving HOAs special HSW fine authority may seem efficient. It may even improve enforcement in some cases. But efficiency is not the only value at stake.

The limits of public and civil enforcement are real. But the answer should not be to transfer health-and-safety punishment authority to private residential boards.

It is a dangerous tradeoff.

Nevada should not solve the limits of the civil system by turning HOAs into substitute civil enforcement agencies.

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[1] This issue is currently part of Nevada’s rulemaking process. Readers should also review the NVHOAReform Rulemaking/Regulation page for proposed regulations, public comments, and updates on the effort to define HSW, establish criteria, address severity, and set limitations on fines under NRS 116.31031.

A related NVHOAReform post Repeal the HSW Fine-Foreclosure Exception addresses the separate foreclosure issue: even if an HSW fine is lawfully imposed, it should not become the kind of debt that can support nonjudicial foreclosure. Foreclosure is a collection remedy, not a safety remedy.