Under NRS 116.760, the Nevada Real Estate Division (NRED) asserts that it must be involved not later than one year after the person discovers or reasonably should have discovered the alleged violation. NRED continues to apply this interpretation even in cases involving ongoing violations.
It is my position that NRED holds broader authority to investigate than it acknowledges, and ongoing violations should not be disregarded merely because they were not reported within the first year of discovery. Furthermore, a formal complaint is not required for NRED to initiate an investigation. Despite this, it has been my unfortunate experience that NRED frequently relies on this statutory interpretation to avoid addressing serious issues—particularly in cases involving questions of declarant control or when select attorneys with close ties to NRED staff represent HOAs accused of misconduct. For more insight on this dynamic, I recommend reading this article on regulatory capture from The Nevada Current.
If your complaint involves a community manager, developer, or other party with substantial financial backing, it is highly unlikely your case will be brought before the Commission or a hearing panel, as originally intended by Nevada’s lawmakers. Deep-pocketed parties possess a significant advantage in our civil court system. This is precisely why the Commission’s dispute resolution process—designed exclusively for HOA-related matters—was created. Often a Commission hearing is the only realistic path to resolution for owners- and deep pockets know this.
Before a case can proceed to the Commission, a finding of “good cause” must be made. NRED alone has the authority to make this determination. It is my opinion, the Division frequently oversteps its "discretion", often declining to bring legitimate complaints forward for adjudication. The Division then uses confidentiality provisions to shield potential scrutiny. At best the process is opaque. It needs to be examined.
There is no administrative appeal process available to challenge a denial of “good cause” by a Division investigator and the CIC Commission, whose role is to adjudicate alleged violation, typically rubber stamps what the Divisions issues. Importantly, it never evaluates what complaints are not forwarded to assess they were appropriately discharged by the Division- despite years of pleas of owners (myself included) to do so .
This leaves many to see civil action as theri only (albeit a bad) recourse.
In my experience, even when NRED agrees to open a case, investigators often close it as “unsubstantiated”—even when the facts clearly support the alleged violation. In many instances, this decision is made without any direct communication with the complainant. The agency is in effect unreviewable in its decision-making.
Finally, it is important to understand that all documentation and information submitted to or obtained by NRED— including the nature and scope of any investigation—remains confidential unless and until NRED makes a formal finding of “good cause” and refers the matter for a hearing. As a result, if your complaint is closed as “unsubstantiated,” do not expect a detailed explanation.
Mike Kosor
