Time to Escape the “Three Circles of Hell”
Homeowners across Nevada live under the dominion of private corporations that exercise governmental powers — imposing fines, collecting taxes (assessments), and enforcing rules — without public accountability. Bradford Anderson’s recent law review article, “The Homeowner Association: A Descent Into Dante’s Inferno,” captures this reality with precision and alarm. He describes HOAs as “quasi-governments” that operate under a “cloak of secrecy,” where owners’ money is extracted and spent with little oversight and few checks on self-dealing.
Nevada’s 3,400 associations manage billions of dollars annually in owner assessments — yet, like the infernal circles Anderson describes, they do so behind closed doors. His framework exposes the same structural flaws Nevada homeowners have long recognized: an absence of public transparency, financial disclosure, and conflict-of-interest safeguards.
Solution 1: Publicly Disclose Basic Budget Information
Nevada law requires HOAs to give owners an annual budget — but not to share it publicly or allow comparisons across communities. Anderson argues that without public benchmarking, owners “operate in an information vacuum,” unable to tell whether their HOA’s legal fees or management costs are reasonable or excessive.
In a state where the Nevada Real Estate Division (NRED) already collects data on reserve studies and assessments, publishing anonymized HOA budgets would be a modest, high-impact reform.
Alternatively, public disclosure on the HOA’s web site (with exceptions for very small associations) would let owners, researchers, and policymakers spot trends, inefficiencies, and red flags before they spiral into crisis.
Solution 2: Disclose the Identity of Persons Receiving $500 or More Per Year
Anderson’s second circle focuses on the secrecy surrounding who gets paid. Under current Nevada law, owners have to request financial records — a right few know about and fewer can afford to enforce.
Anderson proposes mandatory public disclosure of all individuals or entities receiving more than $500 annually from an HOA in reimbursements, contract awards, or payments. Anderson writes:
This disclosure should include the name of the person/entity, the total aggregate dollar amount (regardless if arising under multiple payments or contracts), and a summary description of the underlying purpose or justification (such as painting services, or expense reimbursement).
This type of disclosure alleviates the need of individual owners from invoking audit rights and spending hours culling through arcane accounting records, and tallying up individual journal entries while HOA management companies play hide and go seek with the identity of recipients. Such disclosure will enable HOA owners to perform due diligence and engage in further inquiry if necessary or desirable.
This affirmative disclosure also helps owners to assure that transactions are prudent, necessary, and competitive. This is partly due to annual budget disclosure documents only providing aggregate amounts in a generic manner, without revealing whether the sums were made to one person/entity, or multiple persons/entities.
One exception to this disclosure would be the exact salary paid to employees of the HOA. This could be accomplished by allowing W-2 wage employees of the HOA to be disclosed by name along with a statement that the sum received is for employee wages in excess of $500. This would preserve the confidentiality of salary information.
In Nevada, where management companies and law firms dominate, this simple reform could expose patterns of vendor capture and insider favoritism — the same concerns that have surfaced in recent Commission hearings.
Solution 3: Require Directors to Annually Affirmatively Disclose Gifts or Dealings with Persons/Entities Who Also Conduct Business with the HOA, To Included the Declarant, Absent Recusal
Finally, Anderson calls out the absence of affirmative disclosure by HOA board members regarding gifts or relationships with vendors. As the HOA entity has already been acknowledged as a type of quasi-governmental entity, (see Kosor v Southern Highlands Development ) the HOA Directors are therefore quasi-public officials. Accordingly, HOA Directors should be subject to the same types of anti-corruptive practices found in government regulation.
Without affirmative disclosure, directors can self-deal with great abandon and frequency at the expense of the other HOA owners. In the event that a director fails to affirmatively disclose a gift or transaction with a person who conducts business with the HOA, the law should designate that this constitutes prima facie evidence that the director has breached her/his fiduciary duty and engaged in self-dealing, placing the burden of proving otherwise upon the director. This affirmative disclosure requirement places the onus on directors to disclose.
Nevada’s conflict-of-interest rules under NRS 116.31084 is ambiguous, weakly enforced, and violations are often invisible. Annual disclosure of any financial relationship, gift, or side arrangement — coupled with a recusal requirement — would align HOA governance with public-sector ethics norms. Transparency here protects both honest directors and the owners they serve.
The only information that would be revealed would involve disclosure of business entities or persons with whom the director is simultaneously dealing with both individually and as a fiduciary in the role as a director on behalf of the HOA. This very scenario is tantamount to a conflict of interest which merits disclosure and scrutiny.
Then there’s the problem of declarant-appointed directors—those named to the board by the developer before owners have full control. Under current Nevada law, these appointees are seen by some to be exempt from recusing themselves in matters that benefit the very developer who employ or control them. This exemption conclusion is misplaced. Plus, the system assumes they’ll recuse themselves voluntarily. But self-policing doesn’t work when a person’s paycheck or loyalty is tied to the party benefiting from the vote. Read more at Nevada's HOA conflict of interest rules are flawed - reform needed and When Conflict Becomes Control: How Ambiguity in Nevada Law Can Undermine HOA Boards
A Nevada Path Forward
Nevada once led the nation in HOA reform with its adoption of the Uniform Common-Interest Ownership Act. It can lead again by adopting the transparency framework Anderson outlines. The Legislature or the Department of Business & Industry could:
Create a public HOA budget repository managed by NRED, similar to the state’s Open Data Portal.
Require public listing of vendors paid more than $500 per year in each association’s annual filing.
Mandate board member gift and conflict disclosures — published alongside annual budgets.
Anderson provides suggested legislative language for each “Solution”. These changes would not burden honest boards; they would protect them. As Anderson writes, transparency “will serve as a guardrail for the unknowing, unwitting, or naïve” — those who simply want their communities to be managed with integrity and fairness.
Conclusion: Nevada’s Choice
Anderson’s “three circles of hell” are not inevitable — they are policy choices. Nevada lawmakers and regulators can choose sunlight over secrecy. Requiring HOAs to operate with the same transparency expected of any public body would not destroy community governance; it would redeem it.
