A Dangerous New HOA Weapon — and Owners Are the Target
Updated: 2 days ago
Lawmakers asked for guardrails. NRED failed to provide them. The Commission not only approved that failure — it expanded the weapon’s reach far beyond what lawmakers intended.
On September 9, Nevada’s Commission for Common-Interest Communities and Condominium Hotels approved R091-25, a controversial package of new HOA regulations. The vote came after four rounds of regulatory consideration over the past year and a procedural challenge to the adoption process itself — including what, exactly, the Commission was approving and whether that language had been properly noticed to the public.
Multiple provisions deserve reconsideration and NVHOAReform has asked for clarification on the process used. But one should alarm every Nevada HOA owner: Section 2, governing extraordinary “health, safety or welfare,” (HSW) fines. (NRS 116.31031)
Nevada law has long allowed volunteer HOA boards to impose these extraordinary fines. Few associations appear to have used them. But, to be fair, we cannot know how often they have been imposed because Nevada does not require associations to report their use. Even owners living in communities where HSW fines are being imposed may have no idea how frequently their board uses them — until they become the target.
Perhaps one reason HSW fines have remained relatively obscure is simple: They are supposed to be extraordinary measures.
Ordinary HOA fines for the classic violation of rules or governing documents are tightly limited by Nevada law. If an offense does not pose an imminent threat of causing a substantial adverse effect on health, safety or welfare, any associated fine may not exceed $100 for each violation or $1,000 per hearing. It also generally prevents foreclosure based on such ordinary governing-document fines; the HSW exception is one of the statutory exceptions.
HSW fines fall into a dramatically different category. If your HOA board decides a violation poses an “imminent threat of causing a substantial adverse effect on the health, safety or welfare”, those ordinary statutory limits disappear. A $100 fine can suddenly become something vastly larger and more serious when your volunteer HOA board decides your conduct presents an “imminent threat” of a “substantial adverse effect.”
Yet the statute does not meaningfully define those terms. What is imminent? What is substantial? What constitutes an adverse effect? And perhaps most dangerously, what exactly constitutes a threat to “welfare”? It is largely in the eye of the beholder.
Lawmakers understood that this extraordinary discretion required controls. But their approach contained a serious weakness: they enacted the weapon first and trusted NRED and the CIC Commission to define when it could be used and, just as importantly, how severe the punishment could become.
That was not incidental. It was the plan presented to lawmakers. In 2021, Administrator Sharath Chandra urged legislators to leave those critical decisions to the CIC Commission. He told the Senate Judiciary Committee that the Commission was the better venue to address the varying severity of HSW violations, establish a tiered structure and set fine limitations. When a senator asked whether that was precisely the idea—leaving the details to regulation rather than statute—Chandra answered: “That is exactly the idea.”
Two months later, he told the Assembly that the Commission would establish tiers and “put caps on those.” He explained that the whole point of the regulatory process was to define the violations, determine their severity and establish caps after public workshops. In other words, lawmakers were expressly asked to trust him and the Commission to build the guardrails later.
And that is what makes the failures now so consequential. NRED offered and the Commission approved a regulation that provides no meaningful measurable criteria, no severity scale, and no dollar limit.
And then it made matters worse. Section 2 gives boards a broader roadmap for reaching conduct far beyond the kind of truly imminent threat owners might reasonably associate with an extraordinary HSW penalty. In doing so, it pushes private HOA boards into territory that should largely belong to police, fire, health and other public authorities charged with protecting public health and safety. An HOA board is not a law-enforcement agency. Its directors are not trained investigators, prosecutors or judges. Yet Section 2 invites them to decide whether private conduct “endangers” another person, is a threat to "welfare", how serious that danger is, and how severely the owner should be punished.
And the punishment itself may vary wildly from one community to another. One HOA might impose a $200 fine for an alleged violation. Another could impose $20,000 for essentially the same conduct. The owner’s exposure depends not on a uniform statewide standard, but on the judgment of whichever board happens to govern that community.
Owners were promised restraints on extraordinary HOA power. They got an expansion of it.
With approval of R091-25, the ultimate HOA board weapon — HSW fines — has now been loaded and placed into the hands of HOA boards without meaningful instructions governing when they may pull the trigger or how much financial damage they may inflict.
The Words Approved Sound Protective. They Aren’t.
Section 2, as approved, contains plenty of words. You can find what NVHOAReform believes is the full approved text at the end of this article. We say believes because the exact text and form of Section 2 as approved was never provided to the public before the vote — the core of our procedural challenge now raised with the Legislative Counsel Bureau.
But even accepting the process of September 9 was compliant, the problem remains. Section 2 says an HSW violation may involve: “A failure to exercise reasonable care.” That is an extraordinarily broad concept. It later includes: “Intentional, willful or malicious interference with the use or enjoyment of a dwelling or a common element.” That can reach deeply into ordinary neighborhood disputes.
And then it sweeps in: “any other act which is substantially similar” to the listed conduct.
The regulation ends by requiring that the conduct occur in a manner that “directly, immediately or actually endangers” an owner, resident or invitee. Those words sound protective. But the vagueness does more than expand board discretion. It may also strengthen the board’s defense when an owner challenges what it did. If the regulation itself leaves “reasonable care,” “welfare,” “severity” and “endangerment” to board judgment, the association can argue that the board was simply exercising business judgment --or advice of counsel-- within the discretion regulators gave it.
Now Imagine the Wrong Board Holding That Power
This is where owners should become angry. Regulations are not written for the best HOA board in Nevada. They must protect owners from the worst ones. Imagine an owner who questions the board. She demands financial records or challenges a contract. She criticizes management. She may even question an election. She speaks repeatedly at meetings and files a complaint against the association when she gets no answers. If you have lived in an HOA long enough and participated in its governance, you have probably met her. Maybe you are her.
Now she is labeled the board’s problem owner. Is an HSW fine really the appropriate weapon for her board? Under this regulation, the board she has been fighting with decides whether she rises to an HSW violation. That board decides whether the threat is substantial. Or the board decides whether someone’s welfare has been affected. Or they label her action absent reasonable care. That board determines severity. And that board determines the fine.
Yes, the owner can hire a lawyer. She can spend enormous amounts of her own money fighting an association that can use her assessments and those of her neighbors to defend what it did. That is the power imbalance the Commission has now loaded and unleashed. There is another word for what this can become, one heard far too often in HOA governance: bullying.
Then the Commission Removed the Most Important Guardrail
But what the Commission removed may be even more alarming than what it approved. The prior draft contained a subsection specifically identifying conduct that, standing alone, could not be treated as an HSW violation. It included:
foul, profane or abusive language;
voicing opposition to or support for matters affecting the HOA;
a nuisance that was not a public nuisance; and
conduct that violated the governing documents but was otherwise lawful.
The Commission deleted all of it. That choice matters. The Commission had language in front of it that would have told HOA boards, clearly and expressly, that speech, opposition to the board, ordinary nuisances and otherwise lawful conduct could not, standing alone, trigger Nevada’s most extraordinary fining power.
It chose to remove that protection.
That tells us something important about what the Commission intended to leave available to boards. And it raises the even more important practical question: how will HOA boards and their lawyers use that discretion?
CAI’s own announcement after the vote makes the reason remarkably clear. Its Legislative Action Committee celebrated the deletion as a lobbying victory, explaining that CAI had opposed language that would have prevented associations from treating an ordinary nuisance as an HSW violation, along with the regulation’s “other broad categories of exclusion.”
Read what that means from an owner’s perspective. The Commission was presented with language saying that speech, opposition to the board, ordinary nuisances and otherwise lawful conduct could not, by themselves, trigger Nevada’s most extraordinary HOA fining power.
The HOA industry asked that protection be removed. The Commission agreed.
That does not mean every rude comment, criticism of a board or nuisance automatically becomes an HSW violation. It means something almost as troubling:
The regulation now refuses to tell an HOA board that those things cannot be the starting point for one.
A board can take the nuisance, the argument, the offensive language, or the otherwise lawful conduct and ask whether it can characterize what happened as a failure to exercise reasonable care, interference with someone’s use or enjoyment, or something “substantially similar” — and then declare that someone was directly, immediately or actually endangered.
That is exactly the discretion lawmakers were supposed to be restraining. And then our regulators handed HOA boards the weapon.
“We Can Fix It Later” Is Not a Safeguard
Throughout the hearing, Administrator Chandra repeatedly acknowledged that the regulation was not perfect, while suggesting it could be amended as problems emerge. That should trouble owners, not reassure them.
Regulations carrying extraordinary punitive power are not supposed to be experiments conducted on the people subject to them.
Once Section 2 takes effect, HOA boards can use it. Owners can be fined under it. Lawyers can build arguments around its ambiguity. Litigation can follow, and owners may end up paying both their own lawyer and the association’s. Owners may have to spend tens of thousands of dollars just to discover where its undefined boundaries actually lie—or they can retreat and hide.
A later amendment does not refund that money, undo the dispute or erase the damage. If regulators already know important protections may be missing, the answer is not “we can fix it later.” The answer is to fix them before handing boards the power.
Nevada HOA owners will be the ones standing in front of it.
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What we understand to be the approved Section 2 provisions. You can find the public notice provision here.
1. Sec. 2. 1. A violation of a provision of the governing documents of an association poses an imminent threat of causing a substantial adverse effect on the health, safety or welfare of the units’ owners or residents of the common-interest community if the violation involves conduct that includes:
(a) failure to exercise reasonable care;
(b) Intentional, willful or malicious interference with the use or enjoyment of a dwelling or a common element;
(c) Willful or grossly negligent destruction or damage of any real or personal property located in a dwelling or common element;
(d) A violation of a housing or health code, law or regulation concerning the health, safety, sanitation or fitness for habitation of a dwelling unit; or
(e) The commission of any other act which is substantially similar to the conduct described in paragraphs (a) to (d), inclusive,
in a manner that directly, immediately or actually endangers a unit’s owner, a resident of the common-interest community or an invitee of a unit’s owner or a tenant.
2. Deleted
3. When determining the amount of a fine to be imposed in accordance with the procedures set forth in NRS 116.31031, an executive board may consult with any appropriate professional for assistance in evaluating the nature, context, severity, scope, frequency or duration of the violation or any other factor relevant to the determination of the executive board
