Effect on the State or on Industrial Insurance: No.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to common-interest ownership; establishing various requirements for meetings of units' owners associations; establishing the office of the ombudsman for owners in common-interest communities; requiring certain associations to pay an annual fee for the operation of the office; establishing requirements for an information statement that must be given, under certain circumstances, to a purchaser of a unit within a common-interest community; prohibiting an association from foreclosing a lien by sale under certain circumstances; prohibiting an association from exercising the power of eminent domain; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1 Chapter 116 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 11, inclusive, of this act.
Sec. 2 "Financial statement" means a balance sheet showing profit and loss of an association and the funds held in reserve by the association.
Sec. 3 "Governing documents" means the declaration, articles of incorporation, articles of association, bylaws, and rules of an association and any other documents that govern the operation of a common-interest community or association.
Sec. 4 1. Except as otherwise provided in this section, a unit's owner may attend any meeting of the units' owners of the association or of the executive board and speak at any such meeting. The executive board may establish reasonable limitations on the time a unit's owner may speak at such a meeting.
2. An executive board may meet in executive session to:
(a) Consult with the attorney for the association on matters relating to proposed or pending litigation if the contents of the discussion would otherwise be governed by the privilege set forth in NRS 49.035 to 49.115, inclusive;
(b) Discuss matters relating to personnel; or
(c) Discuss a violation of the governing documents of the association alleged to have been committed by a unit's owner.
3. Except as otherwise provided in this subsection, any matter discussed in executive session must be generally noted in the minutes of the meeting of the executive board. The executive board shall maintain detailed minutes of any matter discussed pursuant to paragraph (c) of subsection 2 and, upon request, provide a copy of those minutes to the unit's owner who was the subject of the discussion or to his designated representative.
4. A unit's owner is not entitled to attend or speak at a meeting of the executive board held in executive session.
Sec. 5 The rules adopted by an association:
1. Must be reasonably related to the purpose for which they are adopted.
2. Must be sufficiently explicit in their prohibition, direction or limitation to inform a unit's owner, or a tenant or guest of a unit's owner, of any action or omission required for compliance.
3. Must not be adopted to evade any obligation of the association.
4. Must be consistent with the governing documents of the association and must not arbitrarily restrict conduct or require the construction of any capital improvement by a unit's owner that is not required by the governing documents of the association.
5. Must be uniformly enforced under the same or similar circumstances against all units' owners. Any rule that is not so uniformly enforced may not be enforced against any unit's owner.
6. May be enforced by the assessment of a fine only if:
(a) The person alleged to have violated the rule has received notice of the alleged violation and has been given the opportunity to request a hearing on the alleged violation.
(b) At least 30 days before the alleged violation, the person alleged to have violated the rule was given written notice of the rule or any amendment to the rule.
Sec. 5.5. An association may not apply any assessment, fee or other charge that is paid by a unit's owner toward a fine imposed by the association against the unit's owner.
Sec. 6 If a unit's owner, or a tenant or guest of a unit's owner, does not comply with a provision of the governing documents of an association, the executive board of the association may, if the governing documents so provide:
1. Prohibit, for a reasonable time, the unit's owner, or the tenant or guest of the unit's owner, from:
(a) Voting on matters related to the common-interest community.
(b) Using the common elements. The provisions of this paragraph do not prohibit the unit's owner, or the tenant or guest of the unit's owner, from using any vehicular or pedestrian ingress or egress to go to or from the unit, including any area used for parking.
2. Require the unit's owner, or the tenant or guest of the unit's owner, to pay a fine not to exceed $50 for each failure to comply, unless the violation is of a type that threatens the health and welfare of the common-interest community. The imposition of such a fine must comply with the requirements of subsection 6 of section 5 of this act.
Sec. 7 1. An association that is not a master association and levies an annual assessment against each unit in the common-interest community of $500 or more shall:
(a) If the association is required to pay the fee imposed by NRS 78.150 or 82.146, pay to the secretary of state at the time it is required to pay the fee imposed by those sections a fee established by regulation of the administrator of the real estate division of the department of business and industry for every unit in the association.
(b) If the association is organized as a trust or partnership, pay to the administrator of the real estate division of the department of business and industry a fee established by regulation of the administrator for each unit in the association. The fee must be paid on or before January 1 of each year.
2. The fees required to be paid pursuant to this section must be:
(a) Deposited with the state treasurer for credit to the fund for the ombudsman for owners in common-interest communities created pursuant to section 9 of this act.
(b) Established on the basis of the actual cost of administering the office of the ombudsman for owners in common-interest communities and not on a basis which includes any subsidy for the office.
Sec. 8 1. The office of the ombudsman for owners in common-interest communities is hereby created within the real estate division of the department of business and industry.
2. The administrator of the real estate division shall appoint the ombudsman for owners in common-interest communities. The ombudsman for owners in common-interest communities is in the unclassified service of the state.
3. The ombudsman for owners in common-interest communities must be qualified by training and experience to perform the duties and functions of his office.
4. The ombudsman for owners in common-interest communities shall:
(a) Assist in processing claims submitted to mediation or arbitration pursuant to NRS 38.300 to 38.360, inclusive;
(b) Assist owners in common-interest communities to understand their rights and responsibilities as set forth in this chapter and the governing documents of their associations, including, without limitation, publishing materials related to those rights and responsibilities; and
(c) Assist persons appointed or elected to serve on executive boards of associations to carry out their duties.
Sec. 9 1. There is hereby created the fund for the ombudsman for owners in common-interest communities in the state treasury. The fund must be administered by the administrator of the real estate division of the department of business and industry.
2. The fees collected pursuant to section 7 of this act must be credited to the fund.
3. The interest and income earned on the money in the fund, after deducting any applicable charges, must be credited to the fund.
4. The money in the fund must be used solely to defray the costs and expenses of administering the office of the ombudsman for owners in common-interest communities.
Sec. 10 1. Except as otherwise provided in this section, a person engaged in property management for a common-interest community must:
(a) Hold a permit to engage in property management that is issued pursuant to the provisions of chapter 645 of NRS; or
(b) Hold a certificate issued by the real estate commission pursuant to subsection 2.
2. The real estate commission shall provide by regulation for the issuance of certificates for the management of common-interest communities to persons who are not otherwise authorized to engage in property management pursuant to the provisions of chapter 645 of NRS. The regulations:
(a) Must establish the qualifications for the issuance of such a certificate, including the education and experience required to obtain such a certificate; and
(b) May require applicants to pass an examination in order to obtain a certificate.
The real estate division of the department of business and industry may collect a fee for the issuance of a certificate by the commission in an amount not to exceed the administrative costs of issuing the certificate.
3. The provisions of subsection 1 do not apply to:
(a) A full-time employee of an association who manages only one association.
(b) A financial institution.
(c) An attorney licensed to practice in this state.
(d) A trustee.
(e) An employee of a corporation who manages only the property of the corporation.
(f) A declarant.
(g) A receiver.
4. As used in this section, "property management" means the physical, administrative or financial maintenance and management of real property, or the supervision of those activities for a fee, commission or other compensation or valuable consideration.
Sec. 11 The information statement required by NRS 116.4109 must be in substantially the following form:
BEFORE YOU PURCHASE PROPERTY IN A
COMMON-INTEREST COMMUNITY
DID YOU KNOW . . .
1. YOU ARE AGREEING TO RESTRICTIONS ON HOW YOU CAN USE YOUR PROPERTY?
These restrictions are contained in a document known as the Declaration of Covenants, Conditions and Restrictions (C, C & R's) that should be provided for your review before making your purchase. The C, C & R's become a part of the title to your property. They bind you and every future owner of the property whether or not you have read them or had them explained to you. The C, C & R's, together with other "governing documents" (such as association bylaws and rules and regulations), are intended to preserve the character and value of properties in the community, but may also restrict what you can do to improve or change your property and limit how you use and enjoy your property. By purchasing a property encumbered by C, C & R's, you are agreeing to limitations that could affect your lifestyle and freedom of choice. You should review the C, C & R's and other governing documents before purchasing to make sure that these limitations and controls are acceptable to you.
2. YOU WILL HAVE TO PAY OWNERS' ASSESSMENTS FOR AS LONG AS YOU OWN YOUR PROPERTY?
As an owner in a common-interest community, you are responsible for paying your share of expenses relating to the common elements, such as landscaping, shared amenities and the operation of any homeowner's association. The obligation to pay these assessments binds you and every future owner of the property. Owners' fees are usually assessed by the homeowner's association and due monthly. You have to pay dues whether or not you agree with the way the association is managing the property or spending the assessments. The executive board of the association may have the power to change and increase the amount of the assessment and to levy special assessments against your property to meet extraordinary expenses. In some communities, major components of the community such as roofs and private roads must be maintained and replaced by the association. If the association is not well managed or fails to maintain adequate reserves to repair and replace common elements, you may be required to pay large, special assessments to accomplish these tasks.
3. IF YOU FAIL TO PAY OWNERS' ASSESSMENTS, YOU COULD LOSE YOUR HOME?
If you do not pay these assessments when due, the association usually has the power to collect them by selling your property in a nonjudicial foreclosure sale. If fees become delinquent, you may also be required to pay penalties and the association's costs and attorney's fees to become current. If you dispute the obligation or its amount, your only remedy to avoid the loss of your home may be to file a lawsuit and ask a court to intervene in the dispute.
4. YOU MAY BECOME A MEMBER OF A HOMEOWNER'S ASSOCIATION THAT HAS THE POWER TO AFFECT HOW YOU USE AND ENJOY YOUR PROPERTY?
Many common-interest communities have a homeowner's association. In a new development, the association will usually be controlled by the developer until a certain number of units have been sold. After the period of developer control, the association may be controlled by property owners like yourself who are elected by homeowners to sit on an executive board and other boards and committees formed by the association. The association, and its executive board, are responsible for assessing homeowners for the cost of operating the association and the common or shared elements of the community and for the day to day operation and management of the community. Because homeowners sitting on the executive board and other boards and committees of the association may not have the experience or professional background required to understand and carry out the responsibilities of the association properly, the association may hire professional managers to carry out these responsibilities.
Homeowner's associations operate on democratic principles. Some decisions require all homeowners to vote, some decisions are made by the executive board or other boards or committees established by the association or governing documents. Although the actions of the association and its executive board are governed by state laws, the C, C & R's and other documents that govern the common-interest community, decisions made by these persons will affect your use and enjoyment of your property, your lifestyle and freedom of choice, and your cost of living in the community. You may not agree with decisions made by the association or its governing bodies even though the decisions are ones which the association is authorized to make. Decisions may be made by a few persons on the executive board or governing bodies that do not necessarily reflect the view of the majority of homeowners in the community. If you do not agree with decisions made by the association, its executive board or other governing bodies, your remedy is typically to attempt to use the democratic processes of the association to seek the election of members of the executive board or other governing bodies that are more responsive to your needs. If persons controlling the association or its management are not complying with state laws or the governing documents, your remedy is typically to seek to mediate or arbitrate the dispute and, if mediation or arbitration is unsuccessful, file a lawsuit and ask a court to resolve the dispute. In addition to your personal cost in mediation or arbitration, or to prosecute a lawsuit, you may be responsible for paying your share of the association's cost in defending against your claim. There is no government agency in this state that investigates or intervenes to resolve disputes in homeowner's associations.
5. YOU ARE REQUIRED TO PROVIDE PROSPECTIVE BUYERS OF YOUR PROPERTY WITH INFORMATION ABOUT LIVING IN YOUR COMMON-INTEREST COMMUNITY?
The law requires you to provide to a prospective purchaser of your property, before you enter into a purchase agreement, a copy of the community's governing documents, including the C, C & R's, association bylaws, and rules and regulations, as well as a copy of this document. You are also required to provide a copy of the association's current financial statement, operating budget and information regarding the amount of the monthly assessment for common expenses, including the amount set aside as reserves for repair and replacement of common elements. You are also required to inform prospective purchasers of any outstanding judgments or lawsuits pending against the association of which you are aware. You are also required to provide a copy of the minutes from the most recent meeting of the homeowner's association or its executive board. For more information regarding these requirements, see Nevada Revised Statutes 116.4103.
6. YOU HAVE CERTAIN RIGHTS REGARDING OWNERSHIP IN A COMMON-INTEREST COMMUNITY THAT ARE GUARANTEED YOU BY THE STATE?
Pursuant to provisions of chapter 116 of Nevada Revised Statutes, you have the right:
(a) To be notified of all meetings of the association and its executive board, except in cases of emergency.
(b) To attend and speak at all meetings of the association and its executive board, except in some cases where the executive board is authorized to meet in closed, executive session.
(c) To request a special meeting of the association upon petition of at least 10 percent of the homeowners.
(d) To inspect, examine, photocopy and audit financial and other records of the association.
(e) To be notified of all changes in the community's rules and regulations and other actions by the association or board that affect you.
7. QUESTIONS?
Although they may be voluminous, you should take the time to read and understand the documents that will control your ownership of a property in a common-interest community. You may wish to ask your real estate professional, lawyer or other person with experience to explain anything you do not understand. You may also request assistance from the ombudsman for owners in common-interest communities, Nevada Real Estate Division, at (telephone number).
Buyer or prospective buyer's initials:_____
Date:_____
Sec. 12 NRS 116.1204 is hereby amended to read as follows:
116.1204Except as otherwise provided in NRS 116.1205, the provisions of NRS 116.1105, 116.1106, 116.1107, 116.2103, 116.2104 and 116.2121, paragraphs (a) to (f), inclusive, and (k) to (r), inclusive, of subsection 1 of NRS 116.3102, NRS 116.3103, 116.31036, 116.3106, 116.3108 to 116.3111, [116.3116] inclusive, 116.3115 to 116.31168, inclusive, 116.3118, 116.4109 and 116.4117, and NRS 116.11031 to 116.110393, inclusive, to the extent necessary in construing any of those sections, apply to [all common-interest communities] a common-interest community created in this state before January 1, 1992 [;] , if the common-interest community levies an annual assessment against each unit in the common-interest community of $500 or more on or after July 1, 1998, but those sections apply only with respect to events and circumstances occurring on or after [January 1, 1992, and do not invalidate existing provisions of the declaration, bylaws, or plats or plans of those common-interest communities.] July 1, 1998.
Sec. 13 NRS 116.31034 is hereby amended to read as follows:
116.310341. Except as otherwise provided in subsection 5 of NRS 116.212, not later than the termination of any period of declarant's control, the units' owners shall elect an executive board of at least three members, at least a majority of whom must be units' owners. The executive board shall elect the officers. The members and officers of the executive board shall take office upon election.
2. An officer, employee, agent or director of a corporate owner of a unit, a trustee or designated beneficiary of a trust that owns a unit, a partner of a partnership that owns a unit, and a fiduciary of an estate that owns a unit may be an officer or member of the executive board. In all events where the person serving or offering to serve as an officer or member of the executive board is not the record owner, he shall file proof of authority in the records of the association.
3. Each member of the executive board shall, at the time of his appointment or election, certify in writing that he has read and understands the governing documents of the association and the provisions of this chapter.
Sec. 14 NRS 116.3106 is hereby amended to read as follows:
116.31061. The bylaws of the association must provide:
(a) The number of members of the executive board and the titles of the officers of the association;
(b) For election by the executive board of a president, treasurer, secretary and any other officers of the association the bylaws specify;
(c) The qualifications, powers and duties, terms of office and manner of electing and removing officers of the association and members of the executive board and filling vacancies;
(d) Which, if any, of its powers the executive board or officers may delegate to other persons or to a managing agent;
(e) Which of its officers may prepare, execute, certify and record amendments to the declaration on behalf of the association; [and]
(f) Procedural rules for conducting meetings of the association; and
(g) A method for amending the bylaws.
2. Except as otherwise provided in the declaration, the bylaws may provide for any other matters the association deems necessary and appropriate.
3. The bylaws must be written in plain English.
Sec. 15 NRS 116.3108 is hereby amended to read as follows:
116.31081. A meeting of the units' owners of an association must be held at least [twice] once each year. A meeting of the executive board must be held at least once every 90 days. Special meetings of the association may be called by the president, a majority of the executive board or by units' owners having [20] 10 percent, or any lower percentage specified in the bylaws, of the votes in the association.
2. Not less than 10 nor more than 60 days in advance of any meeting, the secretary or other officer specified in the bylaws shall cause notice to be hand-delivered or sent prepaid by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit's owner. The notice of any meeting must state the time and place of the meeting and [the items on the agenda, including, but not limited to, the general nature of any proposed amendment to the declaration or bylaws, any fees or assessments to be imposed or increased by the association, any budgetary changes and any proposal to remove an officer or member of the executive board.] include a copy of the agenda for the meeting. The notice must include notification of the right of a unit's owner to [have] :
(a) Have a copy of the minutes or a summary of the minutes of the meeting distributed to him upon request if he pays the association the cost of making the distribution.
(b) Speak to the association or executive board, unless the executive board is meeting in executive session.
3. The agenda for the meeting must consist of:
(a) A clear and complete statement of the topics scheduled to be considered during the meeting, including, without limitation, any proposed amendment to the declaration or bylaws, any fees or assessments to be imposed or increased by the association, any budgetary changes and any proposal to remove an officer or member of the executive board.
(b) A list describing the items on which action may be taken and clearly denoting that action may be taken on those items.
(c) A period devoted to comments by units' owners and discussion of those comments. Except in emergencies, no action may be taken upon a matter raised under this item of the agenda until the matter itself has been specifically included on an agenda as an item upon which action may be taken pursuant to paragraph (b).
4. If the association adopts a policy imposing a fine on a unit's owner for the violation of the bylaws or other rules established by the association, the secretary or other officer specified in the bylaws shall prepare and cause to be hand-delivered or sent prepaid by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit's owner, a schedule of the fines that may be imposed for those violations.
[4.] 5. Not more than 30 days after any meeting, the secretary or other officer specified in the bylaws shall cause the minutes or a summary of the minutes of the meeting to be made available to the units' owners. A copy of the minutes or a summary of the minutes must be provided to any unit's owner who pays the association the cost of providing the copy to him.
Sec. 15.5. NRS 116.3115 is hereby amended to read as follows:
116.31151. Until the association makes an assessment for common expenses, the declarant shall pay all common expenses. After an assessment has been made by the association, assessments must be made at least annually, based on a budget adopted at least annually by the association.
2. Except for assessments under subsections 3, 4 and 5, all common expenses, including a reserve, must be assessed against all the units in accordance with the allocations set forth in the declaration pursuant to subsections 1 and 2 of NRS 116.2107. Any past due assessment for common expenses or installment thereof bears interest at the rate established by the association not exceeding 18 percent per year.
3. To the extent required by the declaration:
(a) Any common expense associated with the maintenance, repair or replacement of a limited common element must be assessed against the units to which that limited common element is assigned, equally, or in any other proportion the declaration provides;
(b) Any common expense or portion thereof benefiting fewer than all of the units must be assessed exclusively against the units benefited; and
(c) The costs of insurance must be assessed in proportion to risk and the costs of utilities must be assessed in proportion to usage.
4. Assessments to pay a judgment against the association may be made only against the units in the common-interest community at the time the judgment was entered, in proportion to their liabilities for common expenses.
5. If any common expense is caused by the misconduct of any unit's owner, the association may assess that expense exclusively against his unit.
6. If liabilities for common expenses are reallocated, assessments for common expenses and any installment thereof not yet due must be recalculated in accordance with the reallocated liabilities.
7. The association shall provide written notice to the owner of each unit of a meeting at which an assessment for a capital improvement or the commencement of a civil action is to be considered or action is to be taken on such an assessment at least 21 calendar days before the meeting. Except as otherwise provided in this subsection, the association may commence a civil action only upon a vote or agreement of the owners of units to which at least a majority of the votes of the members of the association are allocated. The provisions of this subsection do not apply to a civil action that is commenced:
(a) By an association for a time-share project governed by the provisions of chapter 119A of NRS;
(b) To enforce the payment of an assessment;
(c) To enforce the declaration, bylaws or rules of the association;
(d) To proceed with a counterclaim; or
(e) To protect the health, safety and welfare of the members of the association.
Sec. 16 NRS 116.3115 is hereby amended to read as follows:
116.31151. Until the association makes an assessment for common expenses, the declarant shall pay all common expenses. After an assessment has been made by the association, assessments must be made at least annually, based on a budget adopted at least annually by the association. Except for an association for a time-share project governed by the provisions of chapter 119A of NRS, and unless the declaration imposes more stringent standards, the budget must include a budget for the daily operation of the association and the money for the reserve required by paragraph (b) of subsection 2.
2. Except for assessments under subsections [3, 4 and 5, all] 4, 5 and 6:
(a) All common expenses, including a reserve, must be assessed against all the units in accordance with the allocations set forth in the declaration pursuant to subsections 1 and 2 of NRS 116.2107.
(b) The association shall establish a reserve for the repair and replacement of the major components of the common elements. The reserve may be used only for common expenses that involve major repairs or replacement, including, without limitation, repairing and replacing roofs, roads and sidewalks, and must not be used for daily maintenance.
3. Any past due assessment for common expenses or installment thereof bears interest at the rate established by the association not exceeding 18 percent per year.
[3.] 4. To the extent required by the declaration:
(a) Any common expense associated with the maintenance, repair or replacement of a limited common element must be assessed against the units to which that limited common element is assigned, equally, or in any other proportion the declaration provides;
(b) Any common expense or portion thereof benefiting fewer than all of the units must be assessed exclusively against the units benefited; and
(c) The costs of insurance must be assessed in proportion to risk and the costs of utilities must be assessed in proportion to usage.
[4.] 5. Assessments to pay a judgment against the association may be made only against the units in the common-interest community at the time the judgment was entered, in proportion to their liabilities for common expenses.
[5.] 6. If any common expense is caused by the misconduct of any unit's owner, the association may assess that expense exclusively against his unit.
[6.] 7. If liabilities for common expenses are reallocated, assessments for common expenses and any installment thereof not yet due must be recalculated in accordance with the reallocated liabilities.
[7.] 8. The association shall provide written notice to the owner of each unit of a meeting at which an assessment for a capital improvement or the commencement of a civil action is to be considered or action is to be taken on such an assessment at least 21 calendar days before the meeting. Except as otherwise provided in this subsection, the association may commence a civil action only upon a vote or agreement of the owners of units to which at least a majority of the votes of the members of the association are allocated. The provisions of this subsection do not apply to a civil action that is commenced:
(a) By an association for a time-share project governed by the provisions of chapter 119A of NRS;
(b) To enforce the payment of an assessment;
(c) To enforce the declaration, bylaws or rules of the association;
(d) To proceed with a counterclaim; or
(e) To protect the health, safety and welfare of the members of the association.
Sec. 17 NRS 116.31162 is hereby amended to read as follows:
116.311621. [In] Except as otherwise provided in subsection 4, in a condominium, a cooperative where the owner's interest in a unit is real estate [(NRS 116.1105),] as determined pursuant to NRS 116.1105, or a planned community, the association may foreclose its lien by sale after:
(a) The association has mailed by certified or registered mail, return receipt requested, to the unit's owner or his successor in interest, at his address if known, and at the address of the unit, a notice of delinquent assessment which states the amount of the assessments and other sums which are due in accordance with subsection 1 of NRS 116.3116, a description of the unit against which the lien is imposed, and the name of the record owner of the unit;
(b) The association or other person conducting the sale has executed and caused to be recorded, with the county recorder of the county in which the common-interest community or any part of it is situated, a notice of default and election to sell the unit to satisfy the lien, which contains the same information as the notice of delinquent assessment, but must also describe the deficiency in payment and the name and address of the person authorized by the association to enforce the lien by sale; and
(c) The unit's owner or his successor in interest has failed to pay the amount of the lien, including costs, fees and expenses incident to its enforcement, for 60 days following the recording of the notice of default and election to sell.
2. The notice of default and election to sell must be signed by the person designated in the declaration or by the association for that purpose, or if no one is designated, by the president of the association.
3. The period of 60 days begins on the first day following the later of:
(a) The day on which the notice of default is recorded; or
(b) The day on which a copy of the notice of default is mailed by certified or registered mail, return receipt requested, to the unit's owner or his successor in interest at his address if known, otherwise to the address of the unit.
4. The association may not foreclose a lien by sale for the assessment of a fine for a violation of the declaration, bylaws, rules or regulations of the association, unless the violation is of a type that threatens the health and welfare of the residents of the common-interest community.
Sec. 18 NRS 116.4101 is hereby amended to read as follows:
116.41011. NRS 116.4101 to 116.412, inclusive, apply to all units subject to this chapter, except as otherwise provided in [subsection 2] this section or as modified or waived by agreement of purchasers of units in a common-interest community in which all units are restricted to nonresidential use.
2. Neither a public offering statement nor a certificate of resale need be prepared or delivered in the case of a:
(a) Gratuitous disposition of a unit;
(b) Disposition pursuant to court order;
(c) Disposition by a government or governmental agency;
(d) Disposition by foreclosure or deed in lieu of foreclosure;
(e) Disposition to a dealer;
(f) Disposition that may be canceled at any time and for any reason by the purchaser without penalty; or
(g) Disposition of a unit in a planned community in which the declaration limits the average annual assessment of any unit to not more than $500 [and] , exclusive of optional users' fees and any insurance premiums paid by the association, or which contains no more than [35] 12 units if:
(1) The declarant reasonably believes in good faith that the maximum stated assessment will be sufficient to pay the expenses of the planned community; and
(2) The declaration cannot be amended to increase the assessment during the period of declarant's control without the consent of all units' owners.
3. Except as otherwise provided in subsection 2, the provisions of NRS 116.4101 to 116.412, inclusive, do not apply to a planned community described in NRS 116.1203.
Sec. 19 NRS 116.4103 is hereby amended to read as follows:
116.41031. Except as otherwise provided in NRS 116.41035, a public offering statement must [contain] set forth or fully and accurately disclose each of the following:
(a) The name and principal address of the declarant and of the common-interest community, and a statement that the common-interest community is either a condominium, cooperative or planned community.
(b) A general description of the common-interest community, including to the extent possible, the types, number and declarant's schedule of commencement and completion of construction of buildings, and amenities that the declarant anticipates including in the common-interest community.
(c) The estimated number of units in the common-interest community.
(d) Copies of the declaration, bylaws, and any rules or regulations of the association, but a plat or plan is not required.
(e) [Any current balance sheet and a] A current financial statement and projected budget for the association, either within or as an exhibit to the public offering statement, for 1 year after the date of the first conveyance to a purchaser, and thereafter the current budget of the association. The budget must include, without limitation:
(1) A statement of the amount [, or a statement that there is no amount,] included in the budget as a reserve for repairs and replacement; and
(2) The projected monthly assessment for common expenses for each type of unit [.] , including the amount established as a reserve pursuant to NRS 116.3115.
(f) A description of any services or subsidies being provided by the declarant or an affiliate of the declarant, not reflected in the budget.
(g) Any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee.
(h) The terms and significant limitations of any warranties provided by the declarant, including statutory warranties and limitations on the enforcement thereof or on damages.
(i) A statement that unless the purchaser or his agent has personally inspected the unit, the purchaser may cancel, by written notice, his contract for purchase until midnight of the fifth calendar day following the date of execution of the contract, and the contract must contain a provision to that effect.
(j) A statement of any unsatisfied judgments or pending suits against the association, and the status of any pending suits material to the common-interest community of which a declarant has actual knowledge.
(k) Any current or expected fees or charges to be paid by units' owners for the use of the common elements and other facilities related to the common-interest community.
2. A declarant is not required to revise a public offering statement more than once each calendar quarter, if the following warning is given prominence in the statement: "THIS PUBLIC OFFERING STATEMENT IS CURRENT AS OF (insert a specified date). RECENT DEVELOPMENTS REGARDING (here refer to particular provisions of NRS 116.4103 and 116.4105) MAY NOT BE REFLECTED IN THIS STATEMENT."
Sec. 20 NRS 116.4109 is hereby amended to read as follows:
116.41091. Except in the case of a sale in which delivery of a public offering statement is required, or unless exempt under subsection 2 of NRS 116.4101, a unit's owner shall furnish to a purchaser before execution of any contract for sale of a unit, or otherwise before conveyance:
(a) A copy of the declaration , [(] other than any plats and [plans),] plans, the bylaws, and the rules or regulations of the association;
(b) A statement setting forth the amount of the monthly assessment for common expenses and any unpaid assessment of any kind currently due from the selling unit's owner; [and]
(c) The current operating budget of the association [.] and a financial statement for the association; and
(d) A statement of any unsatisfied judgments or pending legal actions against the association and the status of any pending legal actions relating to the common-interest community of which the unit's owner has actual knowledge.
2. The association, within 10 days after a request by a unit's owner, shall furnish a certificate containing the information necessary to enable the unit's owner to comply with this section. A unit's owner providing a certificate pursuant to subsection 1 is not liable to the purchaser for any erroneous information provided by the association and included in the certificate.
3. Neither a purchaser nor the purchaser's interest in a unit is liable for any unpaid assessment or fee greater than the amount set forth in the certificate prepared by the association. If the association fails to furnish the certificate within the 10 days allowed by subsection 2, the seller is not liable for the delinquent assessment.
Sec. 20.5. NRS 116.4109 is hereby amended to read as follows:
116.41091. Except in the case of a sale in which delivery of a public offering statement is required, or unless exempt under subsection 2 of NRS 116.4101, a unit's owner shall furnish to a purchaser before execution of any contract for sale of a unit, or otherwise before conveyance:
(a) A copy of the declaration, other than any plats and plans, the bylaws, [and] the rules or regulations of the association [;] and, except for a time share governed by the provisions of chapter 119A of NRS, the information statement required by section 11 of this act;
(b) A statement setting forth the amount of the monthly assessment for common expenses and any unpaid assessment of any kind currently due from the selling unit's owner;
(c) The current operating budget of the association and a financial statement for the association; and
(d) A statement of any unsatisfied judgments or pending legal actions against the association and the status of any pending legal actions relating to the common-interest community of which the unit's owner has actual knowledge.
2. The association, within 10 days after a request by a unit's owner, shall furnish a certificate containing the information necessary to enable the unit's owner to comply with this section. A unit's owner providing a certificate pursuant to subsection 1 is not liable to the purchaser for any erroneous information provided by the association and included in the certificate.
3. Neither a purchaser nor the purchaser's interest in a unit is liable for any unpaid assessment or fee greater than the amount set forth in the certificate prepared by the association. If the association fails to furnish the certificate within the 10 days allowed by subsection 2, the seller is not liable for the delinquent assessment.
Sec. 21 NRS 116.4117 is hereby amended to read as follows:
116.41171. If a declarant or any other person subject to this chapter fails to comply with any of its provisions or any provision of the declaration or bylaws, any person or class of persons suffering actual damages from the failure to comply has a claim for appropriate relief.
2. Subject to the requirements set forth in NRS 38.310 and except as otherwise provided in NRS 116.3111, a civil action for damages caused by a failure or refusal to comply with any provision of this chapter or the governing documents of an association may be brought:
(a) By the association against:
(1) A declarant; or
(2) A unit's owner.
(b) By a unit's owner against:
(1) The association;
(2) A declarant; or
(3) Another unit's owner of the association.
3. Punitive damages may be awarded for a willful and material failure to comply with this chapter if the failure is established by clear and convincing evidence.
4. The court may award reasonable attorney's fees to the prevailing party.
5. The civil remedy provided by this section is in addition to, and not exclusive of, any other available remedy or penalty.
Sec. 22 NRS 119A.165 is hereby amended to read as follows:
119A.1651. If a matter governed by this chapter is also governed by chapter 116 of NRS, compliance with the provisions of chapter 116 of NRS governing the matter which are in addition to or different from the provisions in this chapter governing the same matter is not required. In the event of a conflict between provisions of this chapter and chapter 116 of NRS, the provisions of this chapter prevail.
2. Without limiting the generality of subsection 1, the provisions of NRS 116.3103, 116.31034, 116.3106, 116.3108 to 116.311, inclusive, 116.3115, 116.31162, 116.4117 and sections 4 to 7, inclusive, and 10 and 11 of this act do not apply to a time share or a time-share project.
Sec. 23 Chapter 37 of NRS is hereby amended by adding thereto a new section to read as follows:
1. A unit-owners' association may not exercise the power of eminent domain pursuant to the provisions of this chapter.
2. As used in this section, "unit-owners' association" has the meaning ascribed to it in NRS 116.110315.
Sec. 24 NRS 78.150 is hereby amended to read as follows:
78.1501. Each corporation organized under the laws of this state shall, within 60 days after the filing of its articles of incorporation with the secretary of state, and annually thereafter on or before the last day of the month in which the anniversary date of its incorporation occurs in each year, file with the secretary of state a list of its president, secretary and treasurer and all of its directors and a designation of its resident agent in this state, signed by an officer of the corporation.
2. Upon filing the list of officers and directors and designation of resident agent, the corporation shall pay to the secretary of state a fee of $85.
3. The secretary of state shall, 60 days before the last day for filing the annual list required by subsection 1, cause to be mailed to each corporation which is required to comply with the provisions of NRS 78.150 to 78.185, inclusive, and which has not become delinquent, the blank forms to be completed and filed with him. Failure of any corporation to receive the forms does not excuse it from the penalty imposed by law.
4. An annual list for a corporation not in default which is received by the secretary of state more than 60 days before its due date shall be deemed an amended list for the previous year.
5. If the corporation is an association as defined in NRS 116.110315, the secretary of state shall not accept the filing required by this section unless it is accompanied by the fee required to be paid pursuant to section 7 of this act.
Sec. 25 NRS 82.146 is hereby amended to read as follows:
82.1461. Each corporation shall, within 60 days after the filing of its articles of incorporation with the secretary of state, and annually thereafter on or before the last day of the month in which the anniversary date of its incorporation occurs in each year, file with the secretary of state a list of its president, secretary and treasurer and all of its directors and a designation of its resident agent in this state, signed by an officer of the corporation.
2. Upon filing the list of officers and directors and designation of resident agent, the corporation shall pay to the secretary of state a fee of $15.
3. If the corporation is an association as defined in NRS 116.110315, the secretary of state shall not accept the filing required by this section unless it is accompanied by the fee required to be paid pursuant to section 7 of this act.
Sec. 26 Notwithstanding the provisions of section 7 of this act, the total amount of the fees established by the administrator of the real estate division of the department of business and industry pursuant to that section must not be more than:
1. One hundred fifty thousand dollars for the calendar year 1998.
2. Two hundred thousand dollars for the calendar year 1999.
Sec. 27 1. This section and sections 1 to 5, inclusive, 6, 13, 14, 15.5, 17, 18 and 20 of this act become effective upon passage and approval.
2. Section 23 of this act becomes effective on October 1, 1997.
3. Sections 7, 9, 24, 25 and 26 of this act become effective on January 1, 1998, for the purpose of adopting regulations to establish and collect fees for the office of the ombudsman for owners in common-interest communities, and on July 1, 1998, for all other purposes.
4. Sections 5.5, 8, 11, 12, 15, 16, 19, 20.5, 21 and 22 of this act become effective on July 1, 1998.
5. Section 10 of this act becomes effective on July 1, 1998, only if Senate Bill No. 248 of this session becomes effective on or before that date.