New Nevada laws that will affect HOAs

There were not too many laws passed in this past legislative session that affected our local homeowners associations. Here are some that did.

■ AB31 – effective July 1

This bill requires community managers and reserve study specialists to apply to the Nevada Real Estate Division for certification or registration and to submit fingerprints to the division or the Central Repository for Nevada Records of Criminal History to allow the FBI to conduct an investigation of the applicant’s background. It deletes provisions authorizing the commission to adopt regulations requiring the investigation of an applicant’s background.

■ AB161 – effective Oct. 1

This bill restricts an association from prohibiting a homeowner from keeping at least one pet within his or her residence. However, the association may impose reasonable restrictions on pet ownership. For example, prohibiting a dangerous or vicious dog is considered a reasonable restriction. If an association adopts a provision in the governing documents or amends a provision restricting the number of pets kept by a homeowner, that provision applies prospectively. It cannot be applied retroactively. Owners cannot be forced to get rid of a pet that complied with the previous provisions of the governing documents. A prohibition on pet ownership may be contained in the original declaration. A prohibition is valid and enforceable if the prohibition is effective on or before Oct. 1.

■ AB335 – effective Jan. 1

This bill authorizes an HOA to charge a fee for opening or closing any file related to a unit. The fee must be reasonable, based on actual expenses, and cannot exceed $350. Moreover, it cannot be charged to the buyer and the seller. The fee can be increased annually based on the Consumer Price Index; however, the actual rate is limited to no more than 3 percent per year.

It also mandates that timelines be defined in terms of calendar or business days rather than simply “days” and requires that a resale package be valid for at least 90 calendar days. The bill also requires an association to provide the demand statement no later than 10 calendar days after receiving a written request. The fee an association can charge for furnishing a certificate in the resale package has been increased from $160 to $185. The fee can be increased annually based on the CPI, not to exceed 3 percent per year. The Nevada Common Interest Community Commission is authorized to set the additional fee, if any, for the expedited delivery of the certificate (currently $125). The bill eliminates the fee for providing resale documents in electronic format (currently $20) and increases the amount an association can charge for a statement from $150 to $165. The fee for expedited delivery ($100) did not change. Like other fees revised by AB335, the demand fee can be increased annually based on the CPI, not to exceed a rate of 3 percent per year.

■ AB393 – effective immediately

This bill is similar to AB33 passed in the 2017 session, and it mirrors pending federal legislation. Its purpose is to provide protections for state, tribal and federal employees and their households in a government shutdown. Lenders and HOAs are prohibited from foreclosing on state, tribal, or federal employees during a government shutdown and for 90 days after the end of such a shutdown. Violation of this statute is a misdemeanor. The violator may be required to pay damages, attorney’s fees and costs associated with the foreclosure. Associations must inform unit owners of their rights and take steps to verify a claim under the provisions of AB393. Protections for tenants is codified in NRS 118A. 2

■ AB421 – effective Oct. 1

This bill makes significant changes in NRS 40 related to constructional defects. It changes procedural guidelines and removes restrictions that were considered overly burdensome. The immediate impact on HOAs is related to the maintenance and abatement provisions found at NRS 116.310312. That section of 116 allows the association to enter the grounds of a unit to conduct certain maintenance or remove or abate a public nuisance or to enter the interior of a unit to abate a water or sewage leak or take certain other actions in certain circumstances. This bill provides that such actions do not give rise to any rights or standing for the association to claim a constructional defect.

■ SB382 – effective Oct. 1

NRS 116.1201 states the chapter does not apply to nonresidential communities unless the declaration requires it. This bill moves that provision to a new section of 116 and describes how a declaration may require compliance with NRS 116 or portions thereof.

NRS 116.2117 describes how to amend a declaration. It specifically prohibits an amendment, without the unanimous consent of the units’ owners, from changing: (1) the boundaries of any unit; (2) the allocated interests of a unit; or (3) the uses to which any unit is restricted. This bill drops item (3) from the list of changes requiring unanimous consent

NRS 116.31088 requires that at least 10 days before an association commences or seeks to ratify a civil action, the association provide a written statement to the owners that details the following:

(a) A reasonable estimate of the costs of the civil action, including reasonable attorney’s fees.

(b) An explanation of the potential benefits of the civil action and the potential adverse consequences if the association does not commence the action or if the outcome of the action is not favorable to the association.

This bill specifies that the written statement applies only to civil actions on which the owners of units are entitled to vote.