HOA owners should be deeply concerned about several bills introduced in the 2025 Nevada legislative session seeking to grant an expanding level of private right of action for violations of Nevada Revised Statutes (NRS) 116- the laws that regulate the functioning of HOAs in Nevada. At present I read NRS 116 requiring "actual damages" for a private action (see below for more).
HOAs should not act as prosecutors of state law. That power should be reserved for public agencies like the city attorney, district attorney, or code enforcement.
The provisions inserted in these bills expand current law to not require actual damages to bring litigation. They are marketed as a means to empower homeowners- I disagree. They undermine the very regulatory framework designed to promote fairness, consistency, and judicial efficiency in HOA governance.
A private right of action is the legal right of an individual or private party (as opposed to the government) to file a lawsuit to enforce a legal right or seek a remedy for a violation of law. In other words, if a law or regulation grants a private right of action, it means that individuals (or organization in support the individual) harmed by a violation of that law can sue in court, rather than relying only on government agencies to enforce it.
Private rights of action can be explicit (where the statute clearly says people can sue) or implied (where courts interpret that the law intends to allow individuals to sue, even if it doesn't say so directly).
** Undermining the Purpose of HOA Statutes**
NRS 116 provides a comprehensive statutory framework to govern the operation of HOAs in Nevada. These laws are meant to offer clarity, consistency, and uniformity in how associations enforce their rules, manage finances, and address disputes. Enforcement is vested in the regulatory system, an oversight board, or the HOA's internal mechanisms—not, in my opinion, entities acting independently. The goal of the statute is to maintain a balanced approach between individual homeowners, HOA boards, and developers. (Explore more the oversight system legislators intended and why it needs attention here.)
NRS 116.4117(1) provides "If a declarant, community manager or any other person subject to this chapter fails to comply with any of its provisions or any provision of the declaration or bylaws, any person or class of persons suffering actual damages from the failure to comply may bring a civil action for damages or other appropriate relief." (underline added)
I read this provision affirming the right to initiate legal action, provided you suffer actual damages, against parties who fail to adhere to the statutes. But should it? Should legislators step in and make "adjustments"?
How about looking to California Code 4955, giving only an owner the right of action against an HOA? “A member who prevails in a civil action to enforce the member’s rights . . . the court may impose a civil penalty of up to five hundred dollars ($500) for each violation.”
The question here is should HOAs or those acting on behalf of HOAs be permitted to serve as prosecutors of state law?
**Ramifications**
Homeowners, associations, developers, corporate industry vendors (I include HOA attorneys in this group), and special interest groups with the means and legal expertise can take advantage of a private right of action, while individual owners may not have the resources or knowledge to hold their HOA accountable. This could create a patchwork of enforcement across communities, undermining the core objective of uniform governance under NRS 116.
Many provisions of Nevada’s HOA laws are unfortunately vague or open to interpretation. Conflict of interest provisions, requirements to bid large projects, conduct of elections, standards for architectural guidelines, the “reasonableness” of certain restrictions, are just a few examples. These ambiguities are best addressed through regulatory advisories, mediation and/or if necessary administrative hearings, not through adversarial lawsuits.
By allowing litigation over such subjective issues, lawmakers risk an influx of frivolous lawsuits based on personal grievances rather than actual legal violations. This could lead to further clogging of Nevada’s already constipated legal system where courts are forced to deal with trivial or speculative claims.
**Financial Burdens on Homeowners and HOAs**
When entities are encouraged to pursue litigation over statutory HOA issues, the financial burden on communities can rise dramatically. Even in cases where litigation is pursued in good faith, the financial burden of a private right of action is significant. Homeowners may find themselves facing hefty legal fees just to defend against a lawsuit- either directly or through their HOA. For individual homeowners, this may lead to bankruptcy or force them to abandon their claims entirely. For HOA boards, especially in smaller associations, the costs of defending lawsuits will result in increased dues and/or reduced community services.
The financial strain could be especially damaging for vulnerable populations, such as seniors, low-income families, or those on fixed incomes, who may be forced to divert limited resources toward legal battles rather than other community needs.
**A Chilling Effect Driven by Corporate Deep Pockets**
Private right of action brings to HOAs the ugly environment where well-funded entities weaponize litigation to silence dissent, suppress whistleblowers, or intimidate those who challenge questionable practices. The mere threat of prolonged, expensive litigation from an HOA funded from the purse of owners, or developers and management companies with deep legal resources can chill legitimate efforts to hold entities accountable for statutory violations.
In effect, this creates a legal imbalance that undermines the very protections NRS 116 seeks to provide homeowners. It places disproportionate power in the hands of well-funded entities that can bypass the current administrative processes (or receive special treatment by investigators) in favor of civil litigation, where they can outlast individual homeowners.
**Alternative Solutions for Effective Statutory Enforcement
Rather than a private right of action, Nevada legislators should return functionality and accountability to an excellent framework already in place- but today failing owners. Focus on solutions that ensure effective, consistent enforcement of NRS 116 without burdening the courts or allowing large entities to abuse the legal system. Some potential alternatives include:
Demanding more of the state's regulator- Nevada Real Estate Division (NRED): Restore owner confidence in the regulatory process. Require NRED transparency and accountability (via access as public records is one solution) in the investigation of complaints filed and subsequent findings. (Explore more here)
Address legitimate concerns NRED is captured by the industry it regulates.
Evaluate the CIC Commission's adjudication process. What types of actions make it before the Commission? Results?
Encourage good faith participation in mediation and dispute resolution.
Consider legislation that significant limits right of private action for NRS 116 violations.
Consider imposing greater state-level penalties for violations: Instead of empowering individuals and/or communities to file lawsuits, the state could impose penalties or fines directly on owners, HOA board directors, and developers who violate NRS 116. This could provide an effective deterrent to bad practices while avoiding the costs and complications of individual lawsuits.
While the marketed objective of a private right of action for statutory violations of NRS 116 may seem a good idea, they pose serious risks to Nevada’s homeowners, judicial efficiency, and the equitable enforcement of HOA laws. The goal should be to maintain balance and fairness in HOA governance, not to create a system where the powerful can exploit legal tools to dominate and intimidate individual homeowners.
Public enforcers, in this case the Nevada Real Estate Division (NRED)—albeit with current policies and practices failing HOA owners—along with the assistance of a robust CIC Commission, are best vested with the authority to enforce HOA law, not HOA boards, industry players, and/or their vested legal counsel.
Where do you stand on private rights of action to enforce HOA laws? Tell us what you think of this post. Lend your voice to the Coalition effort- join us.
Mike Kosor
Founder, Nevada HOA Reform Coalition
