Objections to Proposal Giving NRED Greater Enforcement Authority

Proposed Regulation LCB File No. R091-25 — Section 4

The Nevada Real Estate Division is proposing a regulation that would grant it enforcement authority lawmakers never clearly intended. If approved by the Commission for Common-Interest Communities, the proposal would allow NRED to close HOA violation investigations through informal “remedial measures” rather than through the Commission’s adjudicatory process.

NVHOAReform believes this type of informal enforcement authority is already being exercised by the Division in ways that exceed the structure established under Nevada law. The proposed regulation would effectively formalize that practice and could result in a transfer of practical decision-making authority from the Commission — which is charged with determining whether violations have occurred — to investigative staff.

Call to Action

NVHOAReform strongly encourages residents to review the proposal and submit respectful comments to the CIC Commission at: mgallo@red.nv.gov

While resolving issues efficiently can be appropriate in some circumstances, the proposed regulation raises broader concerns about the future structure of HOA enforcement in Nevada.

Formalizing an Existing Enforcement Practice

Confidential Resolution of Complaints?

More fundamentally, the proposal appears aimed at legitimizing an enforcement approach that has developed informally over time. For years, some HOA-related complaints appear to have been resolved within the Division’s confidential investigative process without proceeding to public Commission adjudication.

Rather than first determining whether this practice is consistent with the enforcement structure contemplated by Nevada law, the proposed regulation would formally authorize and expand it. Once embedded in regulation, this approach may become more difficult to question, potentially reducing transparency and weakening the Commission’s central adjudicatory role.

Nevada’s statutory enforcement framework was designed to separate investigation from adjudication. The Division investigates alleged violations, while the Commission determines whether violations occurred in a public proceeding. That structure promotes consistency, accountability, and public confidence in how HOA laws are applied. Expanding confidential investigative resolutions risks blurring that separation.

Transparency and Public Confidence Concerns

Under Nevada law, Division investigations are generally treated as confidential while pending. When cases proceed to formal Commission hearings, findings become public and provide important guidance to homeowners, associations, and community managers.

The proposed regulation could increase the number of cases resolved informally. In such situations, communities may never learn that potential violations occurred or that corrective action was required. Individuals who file complaints may receive little explanation beyond notice that no violation was formally found.

Confidential enforcement mechanisms also create the risk of inconsistent or preferential outcomes. When alleged violations are resolved outside a transparent adjudicatory process, homeowners cannot determine whether enforcement discretion is being applied uniformly or whether some parties receive informal relief while others face formal penalties.

Transparency is therefore not simply a procedural preference — it is essential to maintaining trust in Nevada’s HOA regulatory system.

Disagreement Over Legal Authority

NRED oversteps authority?

During the recent rulemaking workshop, Division counsel argued that informal remedial authority is supported by the broad administrative language in NRS 116.615, which allows the Division to do all things “necessary and convenient” to administer Chapter 116.

NVHOAReform respectfully disagrees with the Division’s interpretation of its authority under NRS 116.615. In our view, the current rulemaking proposal would allow enforcement decisions to be resolved informally at the investigative stage in a way that effectively shifts responsibility away from the Commission’s adjudicatory role. While the statute provides flexibility to carry out Division duties, it also makes clear that any delegation of the Commission’s authority must occur through formal regulation adopted by the Commission itself.

Nevada’s statutory framework separates investigation, administration, and adjudication for a reason — to promote transparency, consistency, and public confidence in enforcement decisions. Expanding informal resolution authority without clear standards or meaningful oversight risks weakening that structure.

NVHOAReform believes the better approach is for the Commission to clarify enforcement procedures through carefully defined regulations, rather than allowing important violation determinations to be handled behind the scenes.

Rulemaking should clarify legislative intent — not be used to normalize enforcement practices that developed without clear statutory authorization.

Efficiency vs Accountability

Many regulatory agencies use warning letters, corrective agreements, or negotiated resolutions to address alleged violations without formal hearings. These tools can promote efficiency and voluntary compliance.

However, in most regulatory systems, informal enforcement actions are accompanied by public reporting mechanisms designed to ensure transparency and consistency. Agencies commonly publish enforcement summaries, consent orders, disciplinary bulletins, or settlement notices. Even when personal information is redacted, the public is informed about:

• the general nature of the alleged violation

• the corrective action required

• the basis for resolving the matter without formal adjudication

NVHOAReform believes that if NRED is authorized to resolve HOA-related violations through informal remedial measures, a similar transparency framework must be required.

At minimum, the Division should publish publicly accessible redacted summaries identifying the nature of the alleged violation, the corrective action taken, and the reason the matter was resolved without Commission adjudication.

Providing this level of transparency would preserve the benefits of voluntary compliance while ensuring that enforcement outcomes remain visible, consistent, and accountable to the public.

Homeowners Still Have Time to Act

The rule has not yet been finalized. Homeowners can still make their voices heard.

NVHOAReform strongly encourages residents to review the proposal and submit respectful comments to the CIC Commission at: mgallo@red.nv.gov

When regulators hear primarily from industry representatives, final rules often reflect industry priorities. Clear input from homeowners can help ensure that regulations protect the people who actually live in Nevada’s HOA communities.

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Sample Comment

Subject: Oppose Section 4 — Protect Transparency in HOA Enforcement

Dear Chair and Members of the Commission,

I oppose Section 4 of LCB File No. R091-25.

This proposal would allow alleged HOA violations to be resolved confidentially by Division investigators without public Commission review. Expanding informal enforcement authority without strong guardrails and transparency risks inconsistent outcomes and further reduces homeowner confidence in Nevada’s HOA regulatory system.

Rulemaking should strengthen accountability — not formalize enforcement practices that operate outside public scrutiny.

I respectfully urge the Commission not to adopt Section 4 as proposed.

Sincerely,

[Name]

[City / HOA Community]