Assembly Bill No. 376–Assemblymen Beers and Mabey

 

March 17, 2003

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Joint Sponsors: Senators Nolan and Rawson

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Referred to Committee on Judiciary

 

SUMMARY—Makes various changes to provisions governing common-interest communities. (BDR 10‑10)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to common-interest communities; revising the requirements to amend the declaration of a common-interest community; revising the requirements for rejection of the budget of an association; revising the requirements for the posting of a notice of a meeting of the executive board of a common-interest community association; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. NRS 116.2117 is hereby amended to read as

1-2  follows:

1-3  116.2117  1.  Except in cases of amendments that may be

1-4  executed by a declarant under subsection 6 of NRS 116.2109 or

1-5  NRS 116.211, or by the association under NRS 116.1107,

1-6  subsection 4 of NRS 116.2106, subsection 3 of NRS 116.2108,

1-7  subsection 1 of NRS 116.2112 or NRS 116.2113, or by certain

1-8  units’ owners under subsection 2 of NRS 116.2108, subsection 1 of

1-9  NRS 116.2112, subsection 2 of NRS 116.2113 or subsection 2 of

1-10  NRS 116.2118, and except as limited by subsection 4, the

2-1  declaration, including any plats and plans, may be amended only

2-2  by :

2-3  (a) In an association that consists of less than 7,000 units or in

2-4  an association that the declarant retains developmental rights in

2-5  the common-interest community, vote or agreement of units’

2-6  owners of units to which at least a majority of the votes in the

2-7  association are allocated, or any larger majority the declaration

2-8  specifies. The declaration may specify a smaller number only if all

2-9  of the units are restricted exclusively to nonresidential use.

2-10      (b) In an association that consists of 7,000 or more units and

2-11  the declarant does not possess any developmental rights in the

2-12  common-interest community, vote or agreement of a majority of

2-13  units’ owners of units to which at least 20 percent of the votes in

2-14  the association are allocated, or any larger majority the

2-15  declaration specifies. The declaration may specify a smaller

2-16  number only if all the units are restricted exclusively to

2-17  nonresidential use.

2-18      2.  No action to challenge the validity of an amendment adopted

2-19  by the association pursuant to this section may be brought more than

2-20  [one] 1 year after the amendment is recorded.

2-21      3.  Every amendment to the declaration must be recorded in

2-22  every county in which any portion of the common-interest

2-23  community is located and is effective only upon recordation. An

2-24  amendment, except an amendment pursuant to NRS 116.2112, must

2-25  be indexed in the grantee’s index in the name of the

2-26  common‑interest community and the association and in the grantor’s

2-27  index in the name of the parties executing the amendment.

2-28      4.  Except to the extent expressly permitted or required by other

2-29  provisions of this chapter, no amendment may change the

2-30  boundaries of any unit, the allocated interests of a unit or the uses to

2-31  which any unit is restricted, in the absence of unanimous consent of

2-32  the units’ owners affected and the consent of a majority of the

2-33  owners of the remaining units.

2-34      5.  Amendments to the declaration required by this chapter to

2-35  be recorded by the association must be prepared, executed, recorded

2-36  and certified on behalf of the association by any officer of the

2-37  association designated for that purpose or, in the absence of

2-38  designation, by the president of the association.

2-39      Sec. 2.  NRS 116.3103 is hereby amended to read as follows:

2-40      116.3103  1.  Except as otherwise provided in the declaration,

2-41  the bylaws, this section or other provisions of this chapter, the

2-42  executive board may act in all instances on behalf of the association.

2-43  In the performance of their duties, the officers and members of the

2-44  executive board are fiduciaries. The members of the executive board

3-1  are required to exercise the ordinary and reasonable care of directors

3-2  of a corporation, subject to the business‑judgment rule.

3-3  2.  The executive board may not act on behalf of the association

3-4  to amend the declaration, to terminate the common‑interest

3-5  community, or to elect members of the executive board or determine

3-6  their qualifications, powers and duties or terms of office, but the

3-7  executive board may fill vacancies in its membership for the

3-8  unexpired portion of any term.

3-9  3.  Within 30 days after adoption of any proposed budget for

3-10  the common-interest community, the executive board shall provide a

3-11  summary of the budget to all the units’ owners, and shall set a date

3-12  for a meeting of the units’ owners to consider ratification of the

3-13  budget not less than 14 nor more than 30 days after mailing of the

3-14  summary. [Unless]

3-15      4.  In an association that consists of less than 7,000 units or in

3-16  an association that the declarant retains developmental rights in

3-17  the common-interest community, unless at that meeting a majority

3-18  of all units’ owners or any larger vote specified in the declaration

3-19  reject the budget, the budget is ratified, whether or not a quorum is

3-20  present.

3-21      5.  In an association that consists of 7,000 or more units and

3-22  the declarant does not possess any developmental rights in the

3-23  common-interest community, unless at that meeting 60 percent of

3-24  the units’ owners in the association are present and a majority of

3-25  the units’ owners present at that meeting, or any larger vote

3-26  specified in the declaration, reject the budget, the budget is

3-27  ratified, whether or not a quorum is present.

3-28      6.  If the proposed budget is rejected[,] pursuant to subsection

3-29  4 or 5, the periodic budget last ratified by the units’ owners must be

3-30  continued until such time as the units’ owners ratify a subsequent

3-31  budget proposed by the executive board.

3-32      Sec. 3.  NRS 116.31083 is hereby amended to read as follows:

3-33      116.31083  1.  A meeting of the executive board of an

3-34  association must be held at least once every 90 days.

3-35      2.  Except in an emergency or unless the bylaws of an

3-36  association require a longer period of notice, the secretary or other

3-37  officer specified in the bylaws of the association shall, not less than

3-38  10 days before the date of a meeting of the executive board, cause

3-39  notice of the meeting to be given to the units’ owners. Such notice

3-40  must be:

3-41      (a) Sent prepaid by United States mail to the mailing address of

3-42  each unit within the common-interest community or to any other

3-43  mailing address designated in writing by the unit’s owner;

4-1  (b) If the association offers to send notice by electronic mail,

4-2  sent by electronic mail at the request of the unit’s owner to an

4-3  electronic mail address designated in writing by the unit’s owner; or

4-4  (c) Published in a newsletter or other similar publication that is

4-5  circulated to each unit’s owner[.] and posted on the bulletin boards

4-6  of the association.

4-7  3.  In an emergency, the secretary or other officer specified in

4-8  the bylaws of the association shall, if practicable, cause notice of the

4-9  meeting to be [sent prepaid by United States mail to the mailing

4-10  address of each unit within the common-interest community. If

4-11  delivery of the notice in this manner is impracticable, the notice

4-12  must be hand-delivered to each unit within the common-interest

4-13  community or] posted in a prominent place or places within the

4-14  common elements of the association[.] , including, without

4-15  limitation, the bulletin boards of the association.

4-16      4.  The notice of a meeting of the executive board of an

4-17  association must state the time and place of the meeting and include

4-18  a copy of the agenda for the meeting or the date on which and the

4-19  locations where copies of the agenda may be conveniently obtained

4-20  by the units’ owners of the association. The notice must include

4-21  notification of the right of a unit’s owner to:

4-22      (a) Have a copy of the minutes or a summary of the minutes of

4-23  the meeting distributed to him upon request and, if required by the

4-24  executive board, upon payment to the association of the cost of

4-25  making the distribution.

4-26      (b) Speak to the association or executive board, unless the

4-27  executive board is meeting in executive session.

4-28      5.  The agenda of the meeting of the executive board of an

4-29  association must comply with the provisions of subsection 3 of NRS

4-30  116.3108. The period required to be devoted to comments by units’

4-31  owners and discussion of those comments must be scheduled for the

4-32  beginning of each meeting. In an emergency, the executive board

4-33  may take action on an item which is not listed on the agenda as an

4-34  item on which action may be taken.

4-35      6.  At least once every 90 days, unless the declaration or bylaws

4-36  of the association impose more stringent standards, the executive

4-37  board shall review at one of its meetings:

4-38      (a) A current reconciliation of the operating account of the

4-39  association;

4-40      (b) A current reconciliation of the reserve account of the

4-41  association;

4-42      (c) The actual revenues and expenses for the reserve account,

4-43  compared to the budget for that account for the current year;

4-44      (d) The latest account statements prepared by the financial

4-45  institutions in which the accounts of the association are maintained;

5-1  (e) An income and expense statement, prepared on at least a

5-2  quarterly basis, for the operating and reserve accounts of the

5-3  association; and

5-4  (f) The current status of any civil action or claim submitted to

5-5  arbitration or mediation in which the association is a party.

5-6  7.  The minutes of a meeting of the executive board of an

5-7  association must be made available to the units’ owners in

5-8  accordance with the provisions of subsection 5 of NRS 116.3108.

5-9  8.  As used in this section, “emergency” means any occurrence

5-10  or combination of occurrences that:

5-11      (a) Could not have been reasonably foreseen;

5-12      (b) Affects the health, welfare and safety of the units’ owners of

5-13  the association;

5-14      (c) Requires the immediate attention of, and possible action by,

5-15  the executive board; and

5-16      (d) Makes it impracticable to comply with the provisions of

5-17  subsection 2 or 5.

5-18      Sec. 4.  This act becomes effective on July 1, 2003.

 

5-19  H