Editor’s Note
This post is a short read companion to our longer essay, Nevada’s HOA System Remains Unfinished. That piece explores in depth how Nevada built a framework of oversight and did not take care of it. Here, we step back and frame the problem in simpler terms: homeowners face not one but two hurdles on the path to fairness. The first is repairing institutions that no longer work; the second is building protections that don’t yet exist. Unfinished explains why Nevada fell short of the first. This post shows why the second is even harder — and why both must be cleared before Nevada can truly finish what it started.
Introduction
For years legal scholars have pointed to the road needed to complete what today remains unfinished. They warned that homeowners’ associations, if left to a patchwork of corporate and municipal law, would remain half-built governments — exercising power over daily life without the safeguards people expect from either corporations or cities. Nevada once promised to finish that work, but twenty years later the promise is largely hollow.
A core problem- The courts are no place for HOA disputes, which rarely involve money damages but always carry the risk of catastrophic attorney-fee awards.
This runs deeper than failed institutions. Dive deep here Nevada Knows Fee-Shifting Is Dangerous — But Uses It In HOAs.
Two Hurdles to Real Fairness
The problems facing Nevada homeowners are not just about resolving individual disputes, they are structural and stand in the way of real fairness.
The first hurdle is jumping the institutional gap — getting the system to work as designed. This is not simple, as Nevada’s experience shows, but it is doable with the tools already provided. Nevada once promised inexpensive and accessible oversight: a regulator to clarify rules, a Commission to enforce them, and a dispute-resolution process to keep homeowners out of costly court battles. Yet those promises withered. Rulemaking and advisory opinions slowed to a near halt, ADR never really worked and is now a perfunctory box-check, and the regulator insulated itself with layers of confidentiality. The framework exists on paper, but it no longer functions as a meaningful safeguard.
The second hurdle is harder: even if the machinery worked, the playing field remains tilted. Boards enjoy built-in advantages — vested legal counsel, repeat vendors, and a judicial doctrine that defers to their judgment. The potential for abuse is magnified during the declarant-control period — already a slanted “compromise” with developers. Nevada inexplicably extended that period, and it stands alone among the states in doing so. Homeowners, by contrast, are ordinary people defending their rights for the first and often only time.
HOA law was grafted onto a corporate framework, with boards treated like business directors and governing documents treated like contracts. That framework imports the heavy deference of the Business Judgment Rule — but without the constitutional checks and balances that normally protect people when decisions affect their daily lives.
In corporations, shareholders are protected by disclosure regimes, securities laws, derivative suits, and the ability to exit by selling stock. In municipalities, residents are protected by due process, equal protection, open meeting laws, and judicial review that does not defer blindly. But in HOAs, owners get the worst of both worlds:
• Deference of corporate law, where courts say “we won’t interfere.”
• Regulatory and constitutional limits absent, because HOAs are private.
That is why HOAs need a special legal framework: one that acknowledges they govern communities of homes — where exit is costly, rules are vague, and decisions touch quality of life — and therefore require safeguards more akin to public law than corporate law. Read more at The HOA Quasi-Governmental Paradox: How Courts Recognize HOA Power but Deny Public Protections
Conclusion
Clearing the first hurdle — restoring institutions to do what they were designed to do — is the beginning. Then we create the tools that don’t yet exist: protections that make the playing field fair. Only then can Nevada truly finish what it started.
Closing Note
This blog sketches the two-hurdle problem in broad strokes. For a fuller treatment of Nevada’s unfinished system — and the history of how lawmakers and regulators let it slip — see our longer essay, Nevada’s HOA System Remains Unfinished.
