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What does it take to convert a condo association to a townhouse association

Pramod Mahadevan
Posted Feb 26 2024, 17:39

We are evaluating conversion of our Condo Association in NV to an Townhouse Association. the condo buildings share roofs and vertical walls i.e. they are attached side by side. We are evaluating this to reduce our HOA insurance requirements under NRS, and shift the unit insurance onus to the owners. Can we redefine a "Unit" in such a way that it only includes roof and maybe exterior paint (to maintain uniformity) in the CCRs, and use this definition with the NRS 116.3113?

Will this work and are there any other considerations pros/cons? 

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Chris Seveney
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Chris Seveney
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Replied Feb 27 2024, 04:35
Quote from @Pramod Mahadevan:

We are evaluating conversion of our Condo Association in NV to an Townhouse Association. the condo buildings share roofs and vertical walls i.e. they are attached side by side. We are evaluating this to reduce our HOA insurance requirements under NRS, and shift the unit insurance onus to the owners. Can we redefine a "Unit" in such a way that it only includes roof and maybe exterior paint (to maintain uniformity) in the CCRs, and use this definition with the NRS 116.3113?

Will this work and are there any other considerations pros/cons? 


Can you do this, potentially but typically it will be written that you need say a 2/3 or 3/4 or high majority to do this. What do you think the chances are of getting the unit owners to take on more liability?

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Bradley Buxton
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Bradley Buxton
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Replied Feb 27 2024, 08:35

@Pramod Mahadevan

I'm in Lake Tahoe Nevada and this has become an issue with many larger and smaller condo complexes because of the multiple insurance claims from snow damage last year the insurance companies were dropping policies or charging crazy prices. You'll want to consult a lawyer and pay to rewrite the HOA CC&R rules and an insurance agent to make sure you are covered. Depending on the size of your complex you'll likely need the HOA board approval to do this.

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Pramod Mahadevan
Replied Feb 27 2024, 11:31
Quote from @Chris Seveney:
Quote from @Pramod Mahadevan:

We are evaluating conversion of our Condo Association in NV to an Townhouse Association. the condo buildings share roofs and vertical walls i.e. they are attached side by side. We are evaluating this to reduce our HOA insurance requirements under NRS, and shift the unit insurance onus to the owners. Can we redefine a "Unit" in such a way that it only includes roof and maybe exterior paint (to maintain uniformity) in the CCRs, and use this definition with the NRS 116.3113?

Will this work and are there any other considerations pros/cons? 


Can you do this, potentially but typically it will be written that you need say a 2/3 or 3/4 or high majority to do this. What do you think the chances are of getting the unit owners to take on more liability?

Chris - yes, we are aware of the voting majority needed for this. In terms of taking on more liability, it boils down to what insurance will be less expensive and looking at what we are having to pay through the HOA (for insuring the aggregate of all units), it will likely be cheaper for owners to purchase individual HO3 policies to cover their units (as townhouses) as the carriers would not be taking on the risk of the entire $100M+ in aggregate replacement value, and the owners can take out policies for individual units with a whole range of carriers vs the HOA trying to get coverage through the secondary market.

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Pramod Mahadevan
Replied Feb 27 2024, 11:33
Quote from @Bradley Buxton:

@Pramod Mahadevan

I'm in Lake Tahoe Nevada and this has become an issue with many larger and smaller condo complexes because of the multiple insurance claims from snow damage last year the insurance companies were dropping policies or charging crazy prices. You'll want to consult a lawyer and pay to rewrite the HOA CC&R rules and an insurance agent to make sure you are covered. Depending on the size of your complex you'll likely need the HOA board approval to do this.


 Yep.. we are looking into all of these areas. I wanted to see if there are any examples where condo HOAs have gone down this path successfully.