2019 Legislative Summary for Common Interest Communities

Nothing in this document should be considered a legal opinion or legal advice. For clarification on legislative matters, please seek appropriate counsel.

AB 31 – Effective July 1, 2019

This bill requires community managers and reserve study specialists to apply to the 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 Federal Bureau of Investigation 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.

AB 161 – Effective October 1, 2019

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 in the governing documents 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 October 1, 2019.

AB 335 – Effective January 1, 2020

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 both the buyer and the seller. The fee can be increased annually based on the Consumer Price Index (CPI); however, the actual rate is limited to no more than 3% per year.

It also mandates that timelines be defined in terms of calendar days 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 not later than 10 calendar days after receiving a written request. The fee that 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 Consumer Price Index (CPI) not to exceed 3% per year. The Commission is authorized to set the additional fee, if any, for the expedited deliver 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 demand statement from $150 to $165. The fee for expedited delivery ($100) did not change. Like other fees revised by AB 335, the demand fee can be increased annually based on the CPI, not to exceed a rate of 3% per year.

AB 393 – Effective Immediately

This bill is similar to AB 33 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 the event of 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 AB 393. Protections for tenants is codified in NRS 118A.

AB 421 – Effective October 1, 2019

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.

SB 382 – Effective October 1, 2019

NRS 116.1201 states that 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;

(c) All disclosures that are required to be made upon the sale of the property.

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

SB 392 – Effective July 1, 2019

This bill requires at least one person employed by the Division to be a certified public accountant or have training, expertise and experience in performing audits. The Attorney General must designate a deputy to serve as legal counsel for the Division. That deputy must have legal experience and expertise in cases involving fraud or fiscal malfeasance and he or she must assist the Ombudsman in the resolution of complaints filed through the informal (Intervention Affidavit) process.

In addition, this bill authorizes the creation of a task force to study issues of concern to CICs. The task force may make recommendations for legislative and regulatory change.

Establishment of the task force is at the discretion of the Director of the Department of Business and Industry who would serve as Chairperson. The task force would include representatives from the Real Estate Division; the Office of the Ombudsman; the Office of the Attorney General; and people from the CIC industry, appointed by the Director.