SB100_EN

Senate Bill No. 100–Committee on Commerce and Labor

CHAPTER..........

AN ACT relating to property; making various changes relating to common-interest communities; creating and prescribing the powers and duties of the Commission for Common-Interest Communities; revising provisions relating to the powers and duties of the Ombudsman for Owners in Common-Interest Communities and the Real Estate Division of the Department of Business and Industry; revising provisions governing the regulation of persons who manage common-interest communities; authorizing the Commission to adjudicate certain violations relating to common-interest communities and to impose fines and take other action with regard to such violations; providing that a unit’s owner has the right to display the flag of the United States under certain circumstances; enacting and revising provisions governing the conduct and activities of unit-owners’ associations, the members of executive boards and declarants; enacting provisions relating to the transient commercial use of a unit; authorizing the use of delegates or representatives to exercise voting rights in certain common-interest communities; authorizing an association to impose construction penalties under certain circumstances and to place and foreclose a lien on a unit for failure to pay such penalties; revising provisions relating to the imposition of fines; making various changes relating to meetings, quorums, voting and the election and removal of members of the executive board; authorizing certain common-interest communities to expend money received as a credit against the residential construction tax for certain purposes; revising provisions relating to the foreclosure of certain liens; making various changes relating to the books, records, reports, studies and other papers of an association; 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 48, inclusive, of this

act.

Sec. 2. “Certificate” means a certificate for the management

of a common-interest community issued by the Division.

Sec. 3. “Commission” means the Commission for Common

-Interest Communities created by section 13 of this act.

Sec. 4. “Community manager” means a person who provides

for or otherwise engages in the management of a common-interest

community.

Sec. 5. “Complaint” means a complaint filed by the

Administrator pursuant to section 31 of this act.

Sec. 6. “Division” means the Real Estate Division of the

Department of Business and Industry.

Sec. 7. “Hearing panel” means a hearing panel appointed by

the Commission pursuant to section 19 of this act.

Sec. 8. “Management of a common-interest community”

means the physical, administrative or financial maintenance and

management of a common-interest community, or the supervision

of those activities, for a fee, commission or other valuable

consideration.

Sec. 9. “Ombudsman” means the Ombudsman for Owners in

Common-Interest Communities.

Sec. 10. “Party to the complaint” means the Division and the

respondent.

Sec. 11. “Permit” means a permit to engage in property

management issued pursuant to the provisions of chapter 645 of

NRS.

Sec. 12. “Respondent” means a person against whom:

1. An affidavit has been filed pursuant to section 30 of this

act.

2. A complaint has been filed pursuant to section 31 of this

act.

Sec. 13. 1. The Commission for Common-Interest

Communities is hereby created.

2. The Commission consists of five members appointed by the

Governor. The Governor shall appoint to the Commission:

(a) One member who is a unit’s owner residing in this state

and who has served as a member of an executive board in this

state;

(b) One member who is in the business of developing common

-interest communities in this state;

(d) One member who is a certified public accountant licensed

to practice in this state pursuant to the provisions of chapter 628

of NRS; and

(e) One member who is an attorney licensed to practice in this

state.

3. Each member of the Commission must be a resident of this

state. At least three members of the Commission must be residents

of a county whose population is 400,000 or more.

4. Each member of the Commission must have resided in a

common-interest community or have been actively engaged in a

business or profession related to common-interest communities for

not less than 3 years immediately preceding the date of his

appointment.

5. After the initial terms, each member of the Commission

serves a term of 3 years. Each member may serve not more than

two consecutive full terms. If a vacancy occurs during a

member’s term, the Governor shall appoint a person qualified

under this section to replace the member for the remainder of the

unexpired term.

6. While engaged in the business of the Commission, each

member is entitled to receive:

(a) A salary of not more than $80 per day, as established by the

Commission; and

(b) The per diem allowance and travel expenses provided for

state officers and employees generally.

Sec. 14. 1. The Division shall provide or arrange to have

provided to each member of the Commission courses of

instruction concerning rules of procedure and substantive law

appropriate for members of the Commission.

2. Each member of the Commission must attend the courses

of instruction not later than 6 months after the date that the

member is first appointed to the Commission.

Sec. 15. 1. At the first meeting of each fiscal year, the

Commission shall elect from its members a Chairman, a Vice

Chairman and a Secretary.

2. The Commission shall meet at least once each calendar

quarter and at other times on the call of the Chairman or a

majority of its members.

3. A majority of the members of the Commission constitutes a

quorum for the transaction of all business.

Sec. 16. 1. The provisions of this chapter shall be

administered by the Division, subject to the administrative

supervision of the Commission.

2. The Commission and the Division may do all things

necessary and convenient to carry out the provisions of this

chapter, including, without limitation, prescribing such forms and

adopting such procedures as are necessary to carry out the

provisions of this chapter.

3. The Commission or the Administrator, with the approval of

the Commission, may adopt such regulations as are necessary to

carry out the provisions of this chapter.

4. The Commission may by regulation delegate any authority

conferred upon it by the provisions of this chapter to the

Administrator to be exercised pursuant to the regulations adopted

by the Commission.

5. When regulations are proposed by the Administrator, in

addition to other notices required by law, the Administrator shall

provide copies of the proposed regulations to the Commission not

later than 30 days before the next meeting of the Commission.

The Commission shall approve, amend or disapprove any

proposed regulations at that meeting.

6. All regulations adopted by the Commission, or adopted by

the Administrator with the approval of the Commission, must be

published by the Division and offered for sale at a reasonable fee.

7. The Division may publish or supply a reference manual or

study guide for community managers and may offer it for sale at

a reasonable fee.

Sec. 17. Any notice or other information that is required to

be served upon the Commission pursuant to the provisions of this

chapter may be delivered to the principal office of the Division.

Sec. 18. 1. Except as otherwise provided in this section and

within the limits of legislative appropriations, the Division may

employ experts, attorneys, investigators, consultants and other

personnel as are necessary to carry out the provisions of this

chapter.

2. The Attorney General shall act as the attorney for the

Division in all actions and proceedings brought against or by the

Division pursuant to the provisions of this chapter.

3. The Attorney General shall render to the Commission and

the Division opinions upon all questions of law relating to the

construction or interpretation of this chapter, or arising in

the administration thereof, that may be submitted to him by the

Commission or the Division.

Sec. 19. 1. The Commission may appoint one or more

hearing panels. Each hearing panel must consist of one or more

independent hearing officers.

2. The Commission may by regulation delegate to one or

more hearing panels the power of the Commission to conduct

hearings and other proceedings, determine violations, impose

fines and penalties and take other disciplinary action authorized

by the provisions of this chapter.

3. While acting under the authority of the Commission, a

hearing panel and its members are entitled to all privileges and

immunities and are subject to all duties and requirements of the

Commission and its members.

4. A final order of a hearing panel:

(a) May be appealed to the Commission if, not later than 20

days after the date that the final order is issued by the hearing

panel, any party aggrieved by the final order files a written notice

of appeal with the Commission.

(b) Must be reviewed and approved by the Commission if, not

later than 40 days after the date that the final order is issued by

the hearing panel, the Division, upon the direction of the

Chairman of the Commission, provides written notice to all

parties of the intention of the Commission to review the final

order.

Sec. 20. The Commission or a hearing panel may conduct a

hearing by means of an audio or video teleconference to one or

more locations if the audio or video technology used at the

hearing provides the persons present at each location with the

ability to hear and communicate with the persons present at each

other location.

Sec. 21. The Commission and its members, each hearing

panel and its members, the Administrator, the Ombudsman, the

Division, and the experts, attorneys, investigators, consultants and

other personnel of the Commission and the Division are immune

from any civil liability for any decision or action taken in good

faith and without malicious intent in carrying out the provisions

of this chapter.

Sec. 22. 1. The Commission shall conduct such hearings

and other proceedings as are required by the provisions of this

chapter.

2. The Commission shall collect and maintain or cause to be

collected and maintained accurate information relating to:

(a) The number and kind of common-interest communities in

this state;

(b) The effect of the provisions of this chapter and any

regulations adopted pursuant thereto on the development and

construction of common-interest communities, the residential

lending market for units within common-interest communities

and the operation and management of common-interest

communities;

regulations adopted pursuant thereto;

(d) The accessibility and use of, and the costs related to, the

arbitration and mediation procedures set forth in NRS 38.300 to

38.360, inclusive, and the decisions rendered and awards made

pursuant to those arbitration and mediation procedures;

(e) The number of foreclosures which were completed on units

within common-interest communities and which were based on

liens for the failure of the unit’s owner to pay any assessments

levied against the unit or any fines imposed against the unit’s

owner;

(f) The study of the reserves required by NRS 116.31152; and

(g) Other issues that the Commission determines are of

concern to units’ owners, associations, community managers,

developers and other persons affected by common-interest

communities.

3. The Commission shall develop and promote:

(a) Educational guidelines for conducting the elections of the

members of an executive board, the meetings of an executive

board and the meetings of the units’ owners of an association;

and

(b) Educational guidelines for the enforcement of the

governing documents of an association through liens, penalties

and fines.

4. The Commission shall recommend and approve for

accreditation programs of education and research relating to

common-interest communities, including, without limitation:

(a) The management of common-interest communities;

(b) The sale and resale of units within common-interest

communities;

relating to common-interest communities; and

(d) The enforcement, including by foreclosure, of liens on

units within common-interest communities for the failure of the

unit’s owner to pay any assessments levied against the unit or any

fines imposed against the unit’s owner.

Sec. 23. The Commission may:

1. By regulation, establish standards for subsidizing

proceedings for mediation and arbitration conducted pursuant to

NRS 38.300 to 38.360, inclusive, to ensure that such proceedings

are not lengthy and are affordable and readily accessible to all

parties;

2. By regulation, establish standards for subsidizing

educational programs for the benefit of units’ owners, members

of executive boards and officers of associations;

3. Accept any gifts, grants or donations; and

4. Enter into agreements with other entities that are required

or authorized to carry out similar duties in this state or in other

jurisdictions and cooperate with such entities to develop uniform

procedures for carrying out the provisions of this chapter and for

accumulating information needed to carry out those provisions.

Sec. 24. 1. The Commission shall by regulation provide for

the issuance by the Division of certificates to community

managers. The regulations:

(a) Must establish the qualifications for the issuance of such a

certificate, including, without limitation, the education and

experience required to obtain such a certificate.

(b) May require applicants to pass an examination in order to

obtain a certificate. If the regulations require such an

examination, the Commission shall by regulation establish fees to

pay the costs of the examination, including any costs which are

necessary for the administration of the examination.

If the regulations require such an investigation, the Commission

shall by regulation establish fees to pay the costs of the

investigation.

(d) Must establish the grounds for initiating disciplinary action

against a person to whom a certificate has been issued, including,

without limitation, the grounds for placing conditions, limitations

or restrictions on a certificate and for the suspension or

revocation of a certificate.

(e) Must establish rules of practice and procedure for

conducting disciplinary hearings.

2. The Division may collect a fee for the issuance of a

certificate in an amount not to exceed the administrative costs of

issuing the certificate.

Sec. 25. 1. An applicant for a certificate shall submit to the

Division:

(a) The social security number of the applicant; and

(b) The statement prescribed by the Welfare Division of the

Department of Human Resources pursuant to NRS 425.520. The

statement must be completed and signed by the applicant.

2. The Division shall include the statement required pursuant

to subsection 1 in:

(a) The application or any other forms that must be submitted

for the issuance of the certificate; or

(b) A separate form prescribed by the Division.

3. A certificate may not be issued if the applicant:

(a) Fails to submit the statement required pursuant to

subsection 1; or

(b) Indicates on the statement submitted pursuant to

subsection 1 that he is subject to a court order for the support of a

child and is not in compliance with the order or a plan approved

by the district attorney or other public agency enforcing the order

for the repayment of the amount owed pursuant to the order.

4. If an applicant indicates on the statement submitted

pursuant to subsection 1 that he is subject to a court order for the

support of a child and is not in compliance with the order or a

plan approved by the district attorney or other public agency

enforcing the order for the repayment of the amount owed

pursuant to the order, the Division shall advise the applicant to

contact the district attorney or other public agency enforcing the

order to determine the actions that the applicant may take to

satisfy the arrearage.

Sec. 26. 1. If the Division receives a copy of a court order

issued pursuant to NRS 425.540 that provides for the suspension

of all professional, occupational and recreational licenses,

certificates and permits issued to the holder of a certificate, the

Division shall deem the certificate to be suspended at the end of

the 30th day after the date the court order was issued unless the

Division receives a letter issued to the holder of the certificate by

the district attorney or other public agency pursuant to NRS

425.550 stating that the holder of the certificate has complied with

a subpoena or warrant or has satisfied the arrearage pursuant to

NRS 425.560.

2. The Division shall reinstate a certificate that has been

suspended by a district court pursuant to NRS 425.540 if the

Division receives a letter issued by the district attorney or other

public agency pursuant to NRS 425.550 to the holder of the

certificate that he has complied with the subpoena or warrant or

has satisfied the arrearage pursuant to NRS 425.560.

Sec. 27. As used in sections 27 to 37, inclusive, of this act,

unless the context otherwise requires, “violation” means a

violation of any provision of this chapter, any regulation adopted

pursuant thereto or any order of the Commission or a hearing

panel.

Sec. 28. 1. In carrying out the provisions of sections 27 to

37, inclusive, of this act, the Division and the Ombudsman have

jurisdiction to investigate and the Commission and each hearing

panel has jurisdiction to take appropriate action against any

person who commits a violation, including, without limitation:

(a) Any association and any officer, employee or agent of an

association.

(b) Any member of an executive board.

and any other community manager.

(d) Any declarant or affiliate of a declarant.

(e) Any unit’s owner.

(f) Any tenant of a unit’s owner if the tenant has entered into

an agreement with the unit’s owner to abide by the governing

documents of the association and the provisions of this chapter

and any regulations adopted pursuant thereto.

2. The jurisdiction set forth in subsection 1 applies to any

officer, employee or agent of an association or any member of an

executive board who commits a violation and who:

(a) Currently holds his office, employment, agency or position

or who held his office, employment, agency or position at the

commencement of proceedings against him.

(b) Resigns his office, employment, agency or position:

(1) After the commencement of proceedings against him; or

(2) Within 1 year after the violation is discovered or

reasonably should have been discovered.

Sec. 29. 1. The rights, remedies and penalties provided by

sections 27 to 37, inclusive, of this act are cumulative and do not

abrogate and are in addition to any other rights, remedies and

penalties that may exist at law or in equity.

2. If the Commission, a hearing panel or another agency or

officer elects to take a particular action or pursue a particular

remedy or penalty authorized by sections 27 to 37, inclusive, of

this act or another specific statute, that election is not exclusive

and does not preclude the Commission, the hearing panel or

another agency or officer from taking any other actions or

pursuing any other remedies or penalties authorized by sections

27 to 37, inclusive, of this act or another specific statute.

3. In carrying out the provisions of sections 27 to 37,

inclusive, of this act, the Commission or a hearing panel shall not

intervene in any internal activities of an association except to the

extent necessary to prevent or remedy a violation.

Sec. 30. 1. Except as otherwise provided in this section, a

person who is aggrieved by an alleged violation may, not later

than 1 year after the person discovers or reasonably should have

discovered the alleged violation, file with the Division a written

affidavit that sets forth the facts constituting the alleged violation.

The affidavit may allege any actual damages suffered by the

aggrieved person as a result of the alleged violation.

2. An aggrieved person may not file such an affidavit unless

the aggrieved person has, on at least two separate occasions,

provided the respondent by certified mail, return receipt

requested, with written notices of the alleged violation set forth in

the affidavit. The notices must:

(a) Be mailed to the respondent’s last known address.

(b) Be mailed at least 15 days apart.

actual damages suffered by the aggrieved person as a result of the

alleged violation, and any corrective action proposed by the

aggrieved person.

3. A written affidavit filed with the Division pursuant to this

section must be:

(a) On a form prescribed by the Division.

(b) Be accompanied by evidence that:

(1) The respondent has been given a reasonable

opportunity after receiving the written notices to correct the

alleged violation; and

(2) Reasonable efforts to resolve the alleged violation have

failed.

4. The Commission or a hearing panel may impose an

administrative fine of not more than $1,000 against any person

who knowingly files a false or fraudulent affidavit with the

Division.

Sec. 31. 1. Upon receipt of an affidavit that complies with

the provisions of section 30 of this act, the Division shall refer the

affidavit to the Ombudsman.

2. The Ombudsman shall give such guidance to the parties as

the Ombudsman deems necessary to assist the parties to resolve

the alleged violation.

3. If the parties are unable to resolve the alleged violation

with the assistance of the Ombudsman, the Ombudsman shall

provide to the Division a report concerning the alleged violation

and any information collected by the Ombudsman during his

efforts to assist the parties to resolve the alleged violation.

4. Upon receipt of the report from the Ombudsman, the

Division shall conduct an investigation to determine whether

good cause exists to proceed with a hearing on the alleged

violation.

5. If, after investigating the alleged violation, the Division

determines that the allegations in the affidavit are not frivolous,

false or fraudulent and that good cause exists to proceed with a

hearing on the alleged violation, the Administrator shall file a

formal complaint with the Commission and schedule a hearing on

the complaint before the Commission or a hearing panel.

Sec. 32. 1. Except as otherwise provided in subsection 2, if

the Administrator files a formal complaint with the Commission,

the Commission or a hearing panel shall hold a hearing on the

complaint not later than 90 days after the date that the complaint

is filed.

2. The Commission or the hearing panel may continue the

hearing upon its own motion or upon the written request of a

party to the complaint, for good cause shown, including, without

limitation, the existence of proceedings for mediation or

arbitration or a civil action involving the facts that constitute the

basis of the complaint.

3. The Division shall give the respondent written notice of the

date, time and place of the hearing on the complaint at least 30

days before the date of the hearing. The notice must be:

(a) Delivered personally to the respondent or mailed to the

respondent by certified mail, return receipt requested, to his last

known address.

(b) Accompanied by:

(1) A copy of the complaint; and

(2) Copies of all communications, reports, affidavits and

depositions in the possession of the Division that are relevant to

the complaint.

4. At any hearing on the complaint, the Division may not

present evidence that was obtained after the notice was given to

the respondent pursuant to this section, unless the Division proves

to the satisfaction of the Commission or the hearing panel that:

(a) The evidence was not available, after diligent investigation

by the Division, before such notice was given to the respondent;

and

(b) The evidence was given or communicated to the respondent

immediately after it was obtained by the Division.

5. The respondent must file an answer not later than 30 days

after the date that notice of the complaint is delivered or mailed

by the Division. The answer must:

(a) Contain an admission or a denial of the allegations

contained in the complaint and any defenses upon which the

respondent will rely; and

(b) Be delivered personally to the Division or mailed to the

Division by certified mail, return receipt requested.

6. If the respondent does not file an answer within the time

required by subsection 5, the Division may, after giving the

respondent written notice of the default, request the Commission

or the hearing panel to enter a finding of default against the

respondent. The notice of the default must be delivered personally

to the respondent or mailed to the respondent by certified mail,

return receipt requested, to his last known address.

Sec. 33. Any party to the complaint may be represented by an

attorney at any hearing on the complaint.

Sec. 34. 1. After conducting its hearings on the complaint,

the Commission or the hearing panel shall render a final decision

on the merits of the complaint not later than 20 days after the date

of the final hearing.

2. The Commission or the hearing panel shall notify all

parties to the complaint of its decision in writing by certified mail,

return receipt requested, not later than 60 days after the date of

the final hearing. The written decision must include findings of

fact and conclusions of law.

Sec. 35. 1. If the Commission or the hearing panel, after

notice and hearing, finds that the respondent has committed a

violation, the Commission or the hearing panel may take any or

all of the following actions:

(a) Issue an order directing the respondent to cease and desist

from continuing to engage in the unlawful conduct that resulted

in the violation.

(b) Issue an order directing the respondent to take affirmative

action to correct any conditions resulting from the violation.

each violation.

2. If the respondent is a member of an executive board or an

officer of an association, the Commission or the hearing panel

may order the respondent removed from his office or position if

the Commission or the hearing panel, after notice and hearing,

finds that:

(a) The respondent has knowingly and willfully committed a

violation; and

(b) The removal is in the best interest of the association.

3. If the respondent violates any order issued by the

Commission or the hearing panel pursuant to this section, the

Commission or the hearing panel, after notice and hearing, may

impose an administrative fine of not more than $1,000 for each

violation.

4. If the Commission or the hearing panel takes any

disciplinary action pursuant to this section, the Commission or

the hearing panel may order the respondent to pay the costs of the

proceedings incurred by the Division, including, without

limitation, the cost of the investigation and reasonable attorney’s

fees.

5. Notwithstanding any other provision of this section, unless

the respondent has knowingly and willfully committed a violation,

if the respondent is a member of an executive board or an officer

of an association:

(a) The association is liable for all fines and costs imposed

against the respondent pursuant to this section; and

(b) The respondent may not be held personally liable for those

fines and costs.

Sec. 36. If the Commission or a hearing panel, after notice

and hearing, finds that the executive board of an association or

any person acting on behalf of the association has committed a

violation, the Commission or the hearing panel may take any or

all of the following actions:

1. Order an audit of the association.

2. Require the executive board to hire a community manager

who holds a permit or certificate.

Sec. 37. 1. If the Commission or the Division has

reasonable cause to believe, based on evidence satisfactory to it,

that any person has committed a violation or will continue to

commit violations, the Commission or the Division may bring an

action in the district court for the county in which the person

resides or, if the person does not reside in this state, in any court

of competent jurisdiction in this state, to enjoin that person from

continuing to commit the violations or from doing any act in

furtherance of the violations.

2. The action must be brought in the name of the State of

Nevada.

3. The court may issue the injunction without:

(a) Proof of actual damages sustained by any person.

(b) The filing of any bond.

Sec. 38. 1. Notwithstanding any provision of the governing

documents to the contrary, and except as otherwise provided in

this section, a unit’s owner is entitled to display the flag of the

United States, in a manner that is consistent with the Federal

Flag Code, from or on:

(a) A flagpole or staff which is located on exterior property

within the boundaries of his unit or which is attached to an

exterior limited common element that forms a part of the

boundaries of his unit.

(b) A window, ledge, sill, railing, patio, terrace or balcony of

his unit or an exterior limited common element that forms a part

of the boundaries of his unit, whether or not the flag is displayed

from a flagpole or staff.

2. An association may adopt rules that:

(a) Prohibit the display of the flag of the United States in a

manner that is inconsistent with the Federal Flag Code.

(b) Prohibit the display of the flag of the United States if the

flag exceeds 4 feet in its vertical dimension or 6 feet in its

horizontal dimension. For the purposes of this paragraph, the

horizontal dimension of the flag is the dimension that is parallel

with the horizontal stripes of the flag, regardless of the position in

which the flay is displayed.

that may be displayed from, on or around the exterior of a unit.

The maximum number may be one.

(d) Prohibit the display of the flag of the United States from a

flagpole or staff that exceeds 25 feet in height.

(e) Prohibit the display of the flag of the United States in a

manner that poses a real and substantial danger to health or

safety.

3. As used in this section:

(a) “Federal Flag Code” means the rules and customs

pertaining to the display and use of the flag of the United States

which are codified in 4 U.S.C. §§ 5 to 10, inclusive, as altered,

modified or repealed by the President of the United States

pursuant to 4 U.S.C. § 10, and any additional rules pertaining to

the display and use of the flag of the United States which are

prescribed by the President pursuant to 4 U.S.C. § 10.

(b) “Flag of the United States” does not include a depiction or

emblem of the flag of the United States that is made of balloons,

flora, lights, paint, paving materials, roofing, siding or any other

similar building, decorative or landscaping component or

material.

Sec. 39. 1. If an executive board receives a written

complaint from a unit’s owner alleging that the executive board

has violated any provision of this chapter or any provision of the

governing documents of the association, the executive board shall,

if action is required by the executive board, place the subject of the

complaint on the agenda of the next regularly scheduled meeting

of the executive board.

2. Not later than 10 business days after the date that the

association receives such a complaint, the executive board or an

authorized representative of the association shall acknowledge the

receipt of the complaint and notify the unit’s owner that, if action

is required by the executive board, the subject of the complaint

will be placed on the agenda of the next regularly scheduled

meeting of the executive board.

Sec. 40. A member of an executive board, an officer of an

association or a community manager shall not solicit or accept

any form of compensation, gratuity or other remuneration that:

1. Would improperly influence or would appear to a

reasonable person to improperly influence the decisions made by

those persons; or

2. Would result or would appear to a reasonable person to

result in a conflict of interest for those persons.

Sec. 41. An executive board, a member of an executive board

or an officer, employee or agent of an association shall not take,

or direct or encourage another person to take, any retaliatory

action against a unit’s owner because the unit’s owner has:

1. Complained in good faith about any alleged violation of

any provision of this chapter or the governing documents of the

association; or

2. Requested in good faith to review the books, records or

other papers of the association.

Sec. 42. 1. Except as otherwise provided in this section, a

member of an executive board or an officer of an association

shall not:

(a) On or after October 1, 2003, enter into a contract or renew

a contract with the association to provide goods or services to the

association; or

(b) Otherwise accept any commission, personal profit or

compensation of any kind from the association for providing

goods or services to the association.

2. The provisions of this section do not prohibit a declarant,

an affiliate of a declarant or an officer, employee or agent of a

declarant or an affiliate of a declarant from:

(a) Receiving any commission, personal profit or

compensation from the association, the declarant or an affiliate

of the declarant for any goods or services furnished to the

association;

(b) Entering into contracts with the association, the declarant

or affiliate of the declarant; or

of the association.

Sec. 43. 1. If a common-interest community is developed in

separate phases and any declarant or successor declarant is

constructing any common elements that will be added to the

association’s common elements after the date on which the units’

owners other than the declarant may elect a majority of the

members of the executive board, the declarant or successor

declarant who is constructing such additional common elements

is responsible for:

(a) Paying all expenses related to the additional common

elements which are incurred before the conveyance of the

additional common elements to the association; and

(b) Except as otherwise provided in NRS 116.31038, delivering

to the association that declarant’s share of the amount specified

in the study of the reserves completed pursuant to subsection 2.

2. Before conveying the additional common elements to the

association, the declarant or successor declarant who constructed

the additional common elements shall deliver to the association a

study of the reserves for the additional common elements which

satisfies the requirements of NRS 116.31152.

3. As used in this section, “successor declarant” includes,

without limitation, any successor declarant who does not control

the association established by the initial declarant.

Sec. 44. 1. Except as otherwise provided in subsection 2, in

a county whose population is 400,000 or more, a person who

owns, or directly or indirectly has an interest in, one or more

units within a planned community that are restricted to residential

use by the declaration, may use that unit or one of those units for

a transient commercial use only if:

(a) The governing documents of the association and any

master association do not prohibit such use;

(b) The executive board of the association and any master

association approve the transient commercial use of the unit,

except that such approval is not required if the planned

community and one or more hotels are subject to the governing

documents of a master association and those governing

documents do not prohibit such use; and

and any license required by the local government for the transient

commercial use is obtained.

2. In a county whose population is 400,000 or more, a

declarant who owns, or directly or indirectly has an interest in,

one or more units within a planned community under the

governing documents of the association that are restricted to

residential use by the declaration, may use that unit or those units

for a transient commercial use during the period that the

declarant is offering units for sale within the planned community

if such use complies with the requirements set forth in

paragraphs (a) and (c) of subsection 1.

3. The association and any master association may establish

requirements for the transient commercial use of a unit pursuant

to the provisions of this section, including, without limitation, the

payment of additional fees that are related to any increase in

services or other costs associated with the transient commercial

use of the unit.

4. As used in this section:

(a) “Remuneration” means any compensation, money, rent or

other valuable consideration given in return for the occupancy,

possession or use of a unit.

(b) “Transient commercial use” means the use of a unit, for

remuneration, as a hostel, hotel, inn, motel, resort, vacation

rental or other form of transient lodging if the term of the

occupancy, possession or use of the unit is for less than 30

consecutive calendar days.

Sec. 45. The executive board of a master association of any

common-interest community that was created before January 1,

1975, and is located in a county whose population is 400,000 or

more may record an amendment to the declaration pursuant to

which the master association reallocates the costs of

administering the common elements of the master association

among the units of the common-interest community uniformly

and based upon the actual costs associated with each unit.

Sec. 46. 1. If the declaration so provides, in a common

-interest community that consists of at least 1,000 units, the voting

rights of the units’ owners in the association for that common

-interest community may be exercised by delegates or

representatives.

2. In addition to a common-interest community identified in

subsection 1, if the declaration so provides, in a common-interest

community created before October 1, 1999, the voting rights of

the units’ owners in the association for that common-interest

community may be exercised by delegates or representatives.

3. For the purposes of subsection 1, each unit that a

declarant has reserved the right to create pursuant to NRS

116.2105 and for which developmental rights exist must be

counted in determining the number of units in a common-interest

community.

4. Notwithstanding any provision in the declaration, the

election of any delegate or representative must be conducted by

secret written ballot.

5. When an election of a delegate or representative is

conducted by secret written ballot:

(a) The secretary or other officer of the association specified in

the bylaws of the association shall cause a secret written ballot

and a return envelope to be sent, prepaid by United States mail, to

the mailing address of each unit within the common-interest

community or to any other mailing address designated in writing

by the unit’s owner.

(b) Each unit’s owner must be provided with at least 15 days

after the date the secret written ballot is mailed to the unit’s

owner to return the secret written ballot to the association.

association in the manner prescribed on the ballot may be

counted to determine the outcome of the election.

(d) The secret written ballots must be opened and counted at a

meeting called for the purpose of electing delegates or

representatives. A quorum is not required to be present when the

secret written ballots are opened and counted at the meeting.

(e) A candidate for delegate or representative may not possess,

be given access to or participate in the opening or counting of the

secret written ballots that are returned to the association in the

manner prescribed on the ballot before those secret written ballots

have been opened and counted at a meeting called for that

purpose.

Sec. 47. 1. A unit’s owner shall adhere to a schedule

required by the association for:

(a) The completion of the design of a unit or the design of an

improvement to a unit;

(b) The commencement of the construction of a unit or the

construction of an improvement to a unit;

construction of an improvement to the unit; or

(d) The issuance of a permit which is necessary for the

occupancy of a unit or for the use of an improvement to a unit.

2. The association may impose and enforce a construction

penalty against a unit’s owner who fails to adhere to a schedule

as required pursuant to subsection 1 if:

(a) The maximum amount of the construction penalty and the

schedule are set forth in:

(1) The declaration;

(2) Another document related to the common-interest

community that is recorded before the date on which the unit’s

owner acquired title to the unit; or

(3) A contract between the unit’s owner and the

association; and

(b) The unit’s owner receives notice of the alleged violation

which informs him that he has a right to a hearing on the alleged

violation.

3. For the purposes of this chapter, a construction penalty is

not a fine.

Sec. 47.5. In conducting any meetings, a rural agricultural

residential common-interest community must comply with the

provisions set forth in chapter 241 of NRS concerning open

meetings which are generally applicable to public bodies.

Sec. 48. If a matter governed by this chapter is also governed

by chapter 78 of NRS, NRS 81.010 to 81.160, inclusive, or chapter

82 of NRS and there is a conflict between the provisions of this

chapter and the provisions of chapter 78 of NRS, NRS 81.010 to

81.160, inclusive, or chapter 82 of NRS, the provisions of this

chapter prevail.

Sec. 49. NRS 116.1103 is hereby amended to read as follows:

116.1103 [In] As used in this chapter and in the declaration

and bylaws [(NRS 116.3106), unless specifically provided

otherwise or] of an association, unless the context otherwise

requires, [and in this chapter,] the words and terms defined in NRS

116.110305 to 116.110393, inclusive, and sections 2 to 12,

inclusive, of this act have the meanings ascribed to them in those

sections.

Sec. 50. NRS 116.110305 is hereby amended to read as

follows:

116.110305 “Administrator” means the Real Estate

Administrator . [of the Real Estate Division of the Department of

Business and Industry.]

Sec. 51. NRS 116.11145 is hereby amended to read as

follows:

116.11145 1. To carry out the purposes of this chapter, the

[Real Estate] Commission, or any member thereof [,] acting on

behalf of the Commission or acting on behalf of a hearing panel,

may issue subpoenas to compel the attendance of witnesses and the

production of books, records and other papers.

2. If any person fails to comply with a subpoena issued by the

Commission or any member thereof pursuant to this section within

[10] 20 days after [its issuance,] the date of service of the

subpoena, the Commission may petition the district court for an

order of the court compelling compliance with the subpoena.

3. Upon such a petition, the court shall enter an order directing

the person subpoenaed to appear before the court at a time and

place to be fixed by the court in its order, the time to be not more

than [10] 20 days after the date of service of the order, and show

cause why he has not complied with the subpoena. A certified copy

must be served upon the person subpoenaed.

4. If it appears to the court that the subpoena was regularly

issued by the Commission [,] or any member thereof pursuant to

this section, the court shall enter an order compelling compliance

with the subpoena, and upon failure to obey the order the person

shall be dealt with as for contempt of court.

Sec. 52. NRS 116.1116 is hereby amended to read as follows:

116.1116 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.]

Division.

2. The Administrator 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] In addition to any other duties set forth in this

chapter, the Ombudsman 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;

executive boards and officers of associations to carry out their

duties; [and]

(d) When appropriate, investigate disputes involving the

provisions of this chapter or the governing documents of an

association and assist in resolving such disputes; and

(e) Compile and maintain a registration of each association

organized within the State which includes, without limitation [:] ,

the following information:

(1) The name, address and telephone number of the

association;

(2) The name of [the person engaged in property

management] each community manager for the common-interest

community [or] and the name of [the] any other person who

[manages] is authorized to manage the property at the site of the

common-interest community;

(3) The names, mailing addresses and telephone numbers of

the members of the executive board of the association;

(4) The name of the declarant;

(5) The number of units in the common-interest community;

[and]

(6) The total annual assessment made by the association[.] ;

(7) The number of foreclosures which were completed on

units within the common-interest community and which were

based on liens for the failure of the unit’s owner to pay any

assessments levied against the unit or any fines imposed against

the unit’s owner; and

(8) Whether the study of the reserves of the association has

been conducted pursuant to NRS 116.31152 and, if so, the date on

which it was completed.

Sec. 53. NRS 116.1117 is hereby amended to read as follows:

116.1117 1. There is hereby created the Account for [the

Ombudsman for Owners in] Common-Interest Communities in

the State General Fund. The Account must be administered by the

Administrator.

2. [The] Except as otherwise provided in subsection 3, all

money received by the Commission, a hearing panel or the

Division pursuant to this chapter, including, without limitation,

the fees collected pursuant to NRS 116.31155 , must be [credited

to] deposited into the Account.

3. If the Commission imposes a fine or penalty, the

Commission shall deposit the money collected from the imposition

of the fine or penalty with the State Treasurer for credit to the

State General Fund. If the money is so deposited, the Commission

may present a claim to the State Board of Examiners for

recommendation to the Interim Finance Committee if money is

required to pay attorney’s fees or the costs of an investigation, or

both.

4. The interest and income earned on the money in the

Account, after deducting any applicable charges, must be credited

to the Account.

[4.] 5. The money in the Account must be used solely to defray

[the] :

(a) The costs and expenses of [administering] the Commission

and the Office of the Ombudsman [for Owners in Common

-Interest Communities and for the payment of fees for a mediator or

an arbitrator] ; and

(b) If authorized by the Commission or any regulations

adopted by the Commission, the costs and expenses of subsidizing

proceedings for mediation and arbitration conducted pursuant to

NRS [38.330.] 38.300 to 38.360, inclusive.

Sec. 54. NRS 116.1201 is hereby amended to read as follows:

116.1201 1. Except as otherwise provided in this section and

NRS 116.1203, this chapter applies to all common-interest

communities created within this state.

2. This chapter does not apply to:

(a) Associations created for the limited purpose of maintaining:

(1) The landscape of the common elements of a common

-interest community;

(2) Facilities for flood control; or

(3) [A] Except as otherwise provided in section 47.5 of this

act, a rural agricultural residential common-interest community.

(b) A planned community in which all units are restricted

exclusively to nonresidential use unless the declaration provides

that [the] this chapter does apply to that planned community. This

chapter applies to a planned community containing both units that

are restricted exclusively to nonresidential use and other units that

are not so restricted[,] only if the declaration so provides or if the

real estate comprising the units that may be used for residential

purposes would be a planned community in the absence of the units

that may not be used for residential purposes.

this state, but the provisions of NRS 116.4102 to 116.4108,

inclusive, apply to all contracts for the disposition thereof signed in

this state by any party unless exempt under subsection 2 of

NRS 116.4101.

(d) A common-interest community that was created before

January 1, 1992, is located in a county whose population is less

than 50,000, and has less than 50 percent of the units within the

community put to residential use, unless a majority of the units’

owners otherwise elect in writing.

(e) Except as otherwise provided in this chapter, time shares

governed by the provisions of chapter 119A of NRS.

3. The provisions of this chapter do not:

(a) Prohibit a common-interest community created before

January 1, 1992, from providing for separate classes of voting for

the units’ owners of the association;

(b) Require a common-interest community created before

January 1, 1992, to comply with the provisions of NRS 116.2101 to

116.2122, inclusive;

October 1, 1999, by a common-interest community created before

January 1, 1992; or

(d) Prohibit a common-interest community created before

January 1, 1992, or a common-interest community described in

section 46 of this act from providing for a representative form of

government.

4. The provisions of chapters 117 and 278A of NRS do not

apply to common-interest communities.

5. [For the purposes of this section, the Administrator] The

Commission shall establish, by regulation, the criteria for

determining whether an association [is created for the limited

purpose of maintaining the landscape of the common elements of a

common-interest community, maintaining facilities for flood

control or maintaining a rural agricultural residential] or a

common-interest community [.] satisfies the requirements for an

exemption from any provision of this chapter.

Sec. 55. NRS 116.1203 is hereby amended to read as follows:

116.1203 1. Except as otherwise provided in subsection 2, if

a planned community contains no more than 12 units and is not

subject to any developmental rights, it is subject only to NRS

116.1105, 116.1106 and 116.1107 unless the declaration provides

that this entire chapter is applicable.

2. Except for NRS 116.3104, 116.31043, 116.31046 and

116.31138, the provisions of NRS 116.3101 to 116.3119, inclusive,

and section 47 of this act and the definitions set forth in NRS

116.110305 to 116.110393, inclusive, and sections 2 to 12,

inclusive, of this act, to the extent that such definitions are

necessary in construing any of those [sections,] provisions, apply to

a residential planned community containing more than six units.

Sec. 56. NRS 116.1206 is hereby amended to read as follows:

116.1206 1. Any provision contained in a declaration, bylaw

or other governing document of a common-interest community

[created before January 1, 1992, that does not conform to] that

violates the provisions of this chapter shall be deemed to conform

with those provisions by operation of law, and any such declaration,

bylaw or other governing document is not required to be amended

to conform to those provisions.

2. In the case of amendments to the declaration, bylaws or plats

and plans of any common-interest community created before

January 1, 1992:

(a) If the result accomplished by the amendment was permitted

by law before January 1, 1992, the amendment may be made either

in accordance with that law, in which case that law applies to that

amendment, or it may be made under this chapter; and

(b) If the result accomplished by the amendment is permitted by

this chapter, and was not permitted by law before January 1, 1992,

the amendment may be made under this chapter.

3. An amendment to the declaration, bylaws or plats and plans

authorized by this section to be made under this chapter must be

adopted in conformity with the applicable provisions of chapter 117

or 278A of NRS and with the procedures and requirements

specified by those instruments. If an amendment grants to any

person any rights, powers or privileges permitted by this chapter, all

correlative obligations, liabilities and restrictions in this chapter

also apply to that person.

Sec. 57. NRS 116.2103 is hereby amended to read as follows:

116.2103 1. [All provisions of the declaration and bylaws are

severable.] The inclusion in a governing document of an

association of a provision that violates any provision of this

chapter does not render any other provisions of the governing

document invalid or otherwise unenforceable if the other

provisions can be given effect in accordance with their original

intent and the provisions of this chapter.

2. The rule against perpetuities and NRS 111.103 to 111.1039,

inclusive, do not apply to defeat any provision of the declaration,

bylaws, rules or regulations adopted pursuant to NRS 116.3102.

3. In the event of a conflict between the provisions of the

declaration and the bylaws, the declaration prevails except to the

extent the declaration is inconsistent with this chapter.

4. Title to a unit and common elements is not rendered

unmarketable or otherwise affected by reason of an insubstantial

failure of the declaration to comply with this chapter. Whether a

substantial failure impairs marketability is not affected by this

chapter.

Sec. 58. NRS 116.2111 is hereby amended to read as follows:

116.2111 [Subject]

1. Except as otherwise provided in this section and subject to

the provisions of the declaration and other provisions of law, a

unit’s owner:

[1.] (a) May make any improvements or alterations to his unit

that do not impair the structural integrity or mechanical systems or

lessen the support of any portion of the common-interest

community;

[2.] (b) May not change the appearance of the common

elements, or the exterior appearance of a unit or any other portion

of the common-interest community, without permission of the

association; and

[3.] (c) After acquiring an adjoining unit or an adjoining part of

an adjoining unit, may remove or alter any intervening partition or

create apertures therein, even if the partition in whole or in part is a

common element, if those acts do not impair the structural integrity

or mechanical systems or lessen the support of any portion of the

common-interest community. Removal of partitions or creation of

apertures under this [subsection] paragraph is not an alteration of

boundaries.

2. An association may not:

(a) Unreasonably restrict, prohibit or otherwise impede the

lawful rights of a unit’s owner to have reasonable access to his

unit.

(b) Unreasonably restrict, prohibit or withhold approval for a

unit’s owner to add to a unit:

(1) Improvements such as ramps, railings or elevators that

are necessary to improve access to the unit for any occupant of the

unit who has a disability;

(2) Additional locks to improve the security of the unit; or

(3) Shutters to improve the security of the unit or to aid in

reducing the costs of energy for the unit.

or alteration made to a unit, act in violation of any state or federal

law.

3. Any improvement or alteration made pursuant to

subsection 2 that is visible from any other portion of the common

-interest community must be installed, constructed or added in

accordance with the procedures set forth in the governing

documents of the association and must be selected or designed to

the maximum extent practicable to be compatible with the style of

the common-interest community.

Sec. 59. NRS 116.212 is hereby amended to read as follows:

116.212 1. If the declaration provides that any of the powers

described in NRS 116.3102 are to be exercised by or may be

delegated to a profit or nonprofit corporation that exercises those or

other powers on behalf of one or more common-interest

communities or for the benefit of the units’ owners of one or more

common-interest communities, or on behalf of a common-interest

community and a time-share plan created pursuant to chapter 119A

of NRS, all provisions of this chapter applicable to unit-owners’

associations apply to any such corporation, except as modified by

this section.

2. Unless it is acting in the capacity of an association described

in NRS 116.3101, a master association may exercise the powers set

forth in paragraph (b) of subsection 1 of NRS 116.3102 only to the

extent expressly permitted in:

(a) The declarations of common-interest communities which are

part of the master association or expressly described in the

delegations of power from those common-interest communities to

the master association; or

(b) The declaration of the common-interest community which is

a part of the master association and the time-share instrument

creating the time-share plan governed by the master association.

3. If the declaration of any common-interest community

provides that the executive board may delegate certain powers to a

master association, the members of the executive board have no

liability for the acts or omissions of the master association with

respect to those powers following delegation.

4. The rights and responsibilities of units’ owners with respect

to the unit-owners’ association set forth in NRS 116.3103 [to

116.31038, inclusive,] , 116.31032, 116.31034, 116.31036,

116.3108, 116.31085, 116.3109, 116.311 and 116.3112 and section

46 of this act apply in the conduct of the affairs of a master

association only to persons who elect the board of a master

association, whether or not those persons are otherwise units’

owners within the meaning of this chapter.

5. Even if a master association is also an association described

in NRS 116.3101, the certificate of incorporation or other

instrument creating the master association and the declaration of

each common-interest community, the powers of which are

assigned by the declaration or delegated to the master association,

may provide that the executive board of the master association must

be elected after the period of the declarant’s control in any of the

following ways:

(a) All units’ owners of all common-interest communities

subject to the master association may elect all members of the

master association’s executive board.

(b) All members of the executive boards of all common-interest

communities subject to the master association may elect all

members of the master association’s executive board.

subject to the master association may elect specified members of

the master association’s executive board.

(d) All members of the executive board of each common-interest

community subject to the master association may elect specified

members of the master association’s executive board.

Sec. 60. NRS 116.3102 is hereby amended to read as follows:

116.3102 1. Except as otherwise provided in subsection 2,

and subject to the provisions of the declaration, the association

may:

(a) Adopt and amend bylaws, rules and regulations;

(b) Adopt and amend budgets for revenues, expenditures and

reserves and collect assessments for common expenses from units’

owners;

agents and independent contractors;

(d) Institute, defend or intervene in litigation or administrative

proceedings in its own name on behalf of itself or two or more

units’ owners on matters affecting the common-interest community;

(e) Make contracts and incur liabilities;

(f) Regulate the use, maintenance, repair, replacement and

modification of common elements;

(g) Cause additional improvements to be made as a part of the

common elements;

(h) Acquire, hold, encumber and convey in its own name any

right, title or interest to real estate or personal property, but:

(1) Common elements in a condominium or planned

community may be conveyed or subjected to a security interest only

pursuant to NRS 116.3112; and

(2) Part of a cooperative may be conveyed, or all or part of a

cooperative may be subjected to a security interest, only pursuant to

NRS 116.3112;

(i) Grant easements, leases, licenses and concessions through or

over the common elements;

(j) Impose and receive any payments, fees or charges for the use,

rental or operation of the common elements, other than limited

common elements described in subsections 2 and 4 of NRS

116.2102, and for services provided to units’ owners;

(k) Impose charges for late payment of assessments , impose

construction penalties when authorized pursuant to section 47 of

this act and, except as otherwise provided in NRS 116.31031, after

notice and an opportunity to be heard, levy reasonable fines for

violations of the [declaration, bylaws, rules and regulations]

governing documents of the association;

(l) Impose reasonable charges for the preparation and

recordation of amendments to the declaration, the information

required by NRS 116.4109 or statements of unpaid assessments;

(m) Provide for the indemnification of its officers and executive

board and maintain directors’ and officers’ liability insurance;

(n) Assign its right to future income, including the right to

receive assessments for common expenses, but only to the extent

the declaration expressly so provides;

(o) Exercise any other powers conferred by the declaration or

bylaws;

(p) Exercise all other powers that may be exercised in this state

by legal entities of the same type as the association;

(q) Direct the removal of vehicles improperly parked on

property owned or leased by the association, pursuant to NRS

487.038; and

(r) Exercise any other powers necessary and proper for the

governance and operation of the association.

2. The declaration may not impose limitations on the power of

the association to deal with the declarant which are more restrictive

than the limitations imposed on the power of the association to deal

with other persons.

Sec. 61. NRS 116.31031 is hereby amended to read as

follows:

116.31031 1. If a unit’s owner [,] or a tenant or guest of a

unit’s owner [, does not comply with a] violates any provision of

the governing documents of an association, the executive board of

the association may, if the governing documents so provide:

(a) Prohibit, for a reasonable time, the unit’s owner [,] or the

tenant or guest of the unit’s owner [,] from:

(1) Voting on matters related to the common-interest

community.

(2) Using the common elements. The provisions of this

subparagraph 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.

(b) [Require] Impose a fine against the unit’s owner [,] or the

tenant or guest of the unit’s owner [, to pay a fine] for each [failure

to comply that does not threaten the health and welfare of the

common-interest community.] violation, except that a fine may not

be imposed for a violation that is the subject of a construction

penalty pursuant to section 47 of this act. The fine must be

commensurate with the severity of the violation, but must not

exceed $100 for each violation or a total amount of $500,

whichever is less. The limitations on the amount of the fine do not

apply to any interest, charges or costs that may be collected by the

association pursuant to this section if the fine becomes past due.

2. If a fine is imposed pursuant to subsection 1 and the

violation is not cured within 14 days , or [a] within any longer

period [as] that may be established by the executive board, the

violation shall be deemed a continuing violation. Thereafter, the

executive board may impose an additional fine for the violation for

each 7-day period or portion thereof that the violation is not cured.

Any additional fine may be imposed without notice and an

opportunity to be heard.

3. Except as otherwise provided in subsection 2, the imposition

of a fine pursuant to this section must comply with the requirements

of subsection 6 of NRS 116.31065.

4. Any past due fine:

(a) Bears interest at the rate established by the association, not

to exceed the legal rate per annum.

(b) May include any costs of collecting the past due fine at a

rate established by the association. If the past due fine is for a

violation that does not threaten the health, safety or welfare of the

residents of the common-interest community, the rate established

by the association for the costs of collecting the past due fine:

(1) May not exceed $20, if the outstanding balance is less

than $200.

(2) May not exceed $50, if the outstanding balance is $200

or more, but is less than $500.

(3) May not exceed $100, if the outstanding balance is $500

or more, but is less than $1,000.

(4) May not exceed $250, if the outstanding balance is

$1,000 or more, but is less than $5,000.

(5) May not exceed $500, if the outstanding balance is

$5,000 or more.

civil action to enforce the payment of the past due fine.

5. As used in this section:

(a) “Costs of collecting” includes, without limitation, any

collection fee, filing fee, recording fee, referral fee, fee for

postage or delivery, and any other fee or cost that an association

may reasonably charge to the unit’s owner for the collection of a

past due fine. The term does not include any costs incurred by an

association during a civil action to enforce the payment of a past

due fine.

(b) “Outstanding balance” means the amount of a past due

fine that remains unpaid before any interest, charges for late

payment or costs of collecting the past due fine are added.

Sec. 62. NRS 116.31034 is hereby amended to read as

follows:

116.31034 1. 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 [.] of the

association. The members [and officers] of the executive board and

the officers of the association shall take office upon election.

2. The term of office of a member of the executive board may

not exceed 2 years [. A] , except for members who are appointed

by the declarant. Unless the governing documents provide

otherwise, there is no limitation on the number of terms that a

person may serve as a member of the executive board . [may be

elected to succeed himself.]

3. The governing documents of the association must [set forth

the month during which elections for the members of the executive

board must be held after the termination of any period of the

declarant’s control.

3.] provide for terms of office that are staggered in such a

manner that, to the extent possible, an equal number of members

of the executive board are elected at each election. The provisions

of this subsection do not apply to:

(a) Members of the executive board who are appointed by the

declarant; and

(b) Members of the executive board who serve a term of 1 year

or less.

4. Not less than 30 days before the preparation of a ballot for

the election of members of the executive board, the secretary or

other officer specified in the bylaws of the association shall cause

notice to be given to each unit’s owner of his eligibility to serve as a

member of the executive board. Each unit’s owner who is qualified

to serve as a member of the executive board may have his name

placed on the ballot along with the names of the nominees selected

by the members of the executive board or a nominating committee

established by the association.

[4.] 5. Each person whose name is placed on the ballot as a

candidate for a member of the executive board must make a good

faith effort to disclose any financial, business, professional or

personal relationship or interest that would result or would

appear to a reasonable person to result in a potential conflict of

interest for the candidate if the candidate were to be elected to

serve as a member of the executive board. The candidate must

make the disclosure, in writing, to each member of the association

in the manner established in the bylaws of the association.

6. Unless a person is appointed by the declarant:

(a) A person may not be a member of the executive board of an

association or an officer of that association if the person, his

spouse or his parent or child, by blood, marriage or adoption,

performs the duties of a community manager for that association.

(b) A person may not be a member of the executive board of a

master association or an officer of that master association if the

person, his spouse or his parent or child, by blood, marriage or

adoption, performs the duties of a community manager for:

(1) That master association; or

(2) Any association that is subject to the governing

documents of that master association.

7. 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, a member or

manager of a limited-liability company that owns a unit, and a

fiduciary of an estate that owns a unit may be an officer of the

association or a member of the executive board. In all events where

the person serving or offering to serve as an officer of the

association or a member of the executive board is not the record

owner, he shall file proof in the records of the association that:

(a) He is associated with the corporate owner, trust, partnership ,

limited-liability company or estate as required by this subsection;

and

(b) Identifies the unit or units owned by the corporate owner,

trust, partnership , limited-liability company or estate.

[5.] 8. The election of any member of the executive board must

be conducted by secret written ballot [. The] unless the declaration

of the association provides that voting rights may be exercised by

delegates or representatives as set forth in section 46 of this act. If

the election of any member of the executive board is conducted by

secret written ballot:

(a) The secretary or other officer specified in the bylaws of the

association shall cause a secret ballot and a return envelope to be

sent , prepaid by United States mail , to the mailing address of each

unit within the common-interest community or to any other mailing

address designated in writing by the unit’s owner . [, a secret ballot

and a return envelope.

6.] (b) Each unit’s owner must be provided with at least 15

days after the date the secret written ballot is mailed to the unit’s

owner to return the secret written ballot to the association.

the executive board.

(d) Only the secret written ballots that are returned to the

association may be counted to determine the outcome of the

election.

(e) The secret written ballots must be opened and counted at a

meeting of the association. A quorum is not required to be present

when the secret written ballots are opened and counted at the

meeting.

(f) The incumbent members of the executive board and each

person whose name is placed on the ballot as a candidate for a

member of the executive board may not possess, be given access

to or participate in the opening or counting of the secret written

ballots that are returned to the association before those secret

written ballots have been opened and counted at a meeting of the

association.

10. Each member of the executive board shall, within [30] 90

days after his appointment or election, certify in writing to the

association, on a form prescribed by the Administrator, that he has

read and understands the governing documents of the association

and the provisions of this chapter to the best of his ability. The

Administrator may require the association to submit a copy of the

certification of each member of the executive board of that

association at the time the association registers with the

Ombudsman pursuant to NRS 116.31158.

Sec. 63. NRS 116.31036 is hereby amended to read as

follows:

116.31036 1. Notwithstanding any provision of the

declaration or bylaws to the contrary, the units’ owners, by a two

-thirds vote of all persons [present and] entitled to vote at any

meeting of the units’ owners at which a quorum is present, may

remove any member of the executive board with or without cause,

other than a member appointed by the declarant.

2. The removal of any member of the executive board must be

conducted by secret written ballot unless the declaration of the

association provides that voting rights may be exercised by

delegates or representatives as set forth in section 46 of this act. If

the removal of a member of the executive board is conducted by

secret written ballot:

(a) The secretary or other officer specified in the bylaws of the

association shall cause a secret ballot and a return envelope to be

sent, prepaid by United States mail, to the mailing address of each

unit within the common-interest community or to any other

mailing address designated in writing by the unit’s owner.

(b) Each unit’s owner must be provided with at least 15 days

after the date the secret written ballot is mailed to the unit’s

owner to return the secret written ballot to the association.

association may be counted to determine the outcome.

(d) The secret written ballots must be opened and counted at a

meeting of the association. A quorum is not required to be present

when the secret written ballots are opened and counted at the

meeting.

(e) The incumbent members of the executive board, including,

without limitation, the member who is subject to the removal, may

not possess, be given access to or participate in the opening or

counting of the secret written ballots that are returned to the

association before those secret written ballots have been opened

and counted at a meeting of the association.

3. If a member of an executive board is named as a respondent

or sued for liability for actions undertaken in his role as a member

of the board, the association shall indemnify him for his losses or

claims, and undertake all costs of defense, unless it is proven that

he acted with willful or wanton misfeasance or with gross

negligence. After such proof , the association is no longer liable for

the cost of defense, and may recover costs already expended from

the member of the executive board who so acted. Members of the

executive board are not personally liable to the victims of crimes

occurring on the property. Punitive damages may not be recovered

against the association, but may be recovered from persons whose

activity gave rise to the damages.

4. The provisions of this section do not prohibit the

Commission from taking any disciplinary action against a

member of an executive board pursuant to sections 27 to 37,

inclusive, of this act.

Sec. 64. NRS 116.3106 is hereby amended to read as follows:

116.3106 1. 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;

manner of electing and removing officers of the association and

members of the executive board and filling vacancies;

(d) Which [,] powers, if any, [of its powers] that the executive

board or the officers of the association may delegate to other

persons or to a [managing agent;] community manager;

(e) Which of its officers may prepare, execute, certify and

record amendments to the declaration on behalf of the association;

(f) Procedural rules for conducting meetings of the association;

[and]

(g) A method for amending the bylaws[.] ; and

(h) Procedural rules for conducting elections.

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. 65. NRS 116.3108 is hereby amended to read as follows:

116.3108 1. A meeting of the units’ owners of an association

must be held at least once each year. If the governing documents of

a common‑interest community do not designate an annual meeting

date of the units’ owners, a meeting of the units’ owners must be

held 1 year after the date of the last meeting of the units’ owners. If

the units’ owners have not held a meeting for 1 year, a meeting of

the units’ owners must be held on the following March 1. Special

meetings of the units’ owners of an association may be called by

the president, a majority of the executive board or by units’ owners

having 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 of the units’ owners of an association, the secretary or

other officer specified in the bylaws shall cause notice of the

meeting to be hand‑delivered, 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 or, if the association

offers to send notice by electronic mail, sent by electronic mail at

the request of the unit’s owner to an electronic mail address

designated in writing by the unit’s owner. The notice of the meeting

must state the time and place of the meeting and include a copy of

the agenda for the meeting. The notice must include notification of

the right of a unit’s owner to:

(a) Have a copy of the minutes or a summary of the minutes of

the meeting [distributed to him] provided to the unit’s owner upon

request and, if required by the executive board, upon payment to

the

association of the cost of [making the distribution.] providing the

copy to the unit’s owner.

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

executive board is meeting in executive session.

3. The agenda for a meeting of the units’ owners 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 of the

association 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. In an

emergency, the units’ owners may take action on an item which is

not listed on the agenda as an item on which action may be taken.

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 declaration, bylaws or other rules

established by] fines for any violations of the governing

documents of 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.

5. The secretary or other officer specified in the bylaws shall

cause minutes to be recorded or otherwise taken at each meeting

of the units’ owners. Not more than 30 days after [any meeting of

the units’ owners,] each such 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] upon request and, if required by

the executive board, upon payment to the association of the cost of

providing the copy to [him.] the unit’s owner.

6. Except as otherwise provided in subsection 7, the minutes

of each meeting of the units’ owners must include:

(a) The date, time and place of the meeting;

(b) The substance of all matters proposed, discussed or decided

at the meeting; and

meeting if he requests that the minutes reflect his remarks or, if

has prepared written remarks, a copy of his prepared remarks if he

submits a copy for inclusion.

7. The executive board may establish reasonable limitations

on materials, remarks or other information to be included in the

minutes of a meeting of the units’ owners.

8. The association shall maintain the minutes of each

meeting of the units’ owners until the common-interest

community is terminated.

9. A unit’s owner may record on audiotape or any other

means of sound reproduction a meeting of the units’ owners if the

unit’s owner, before recording the meeting, provides notice of his

intent to record the meeting to the other units’ owners who are in

attendance at the meeting.

10. As used in this section, “emergency” means any occurrence

or combination of occurrences that:

(a) Could not have been reasonably foreseen;

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

the association;

the executive board; and

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

subsection 2 or 3.

Sec. 66. NRS 116.31083 is hereby amended to read as

follows:

116.31083 1. A meeting of the executive board of an

association must be held at least once every 90 days.

2. Except in an emergency or unless the bylaws of an

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

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

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

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

must be:

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

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

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

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

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

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

circulated to each unit’s owner.

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

the bylaws of the association shall, if practicable, cause notice of

the meeting to be sent prepaid by United States mail to the mailing

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

delivery of the notice in this manner is impracticable, the notice

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

community or posted in a prominent place or places within the

common elements of the association.

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

association must state the time and place of the meeting and include

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

locations where copies of the agenda may be conveniently obtained

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

notification of the right of a unit’s owner to:

(a) Have a copy of the minutes or a summary of the minutes of

the meeting [distributed to him] provided to the unit’s owner upon

request and, if required by the executive board, upon payment to

the association of the cost of [making the distribution.] providing

the copy to the unit’s owner.

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

executive board is meeting in executive session.

5. The agenda of the meeting of the executive board of an

association must comply with the provisions of subsection 3 of

NRS 116.3108. The period required to be devoted to comments by

units’ owners and discussion of those comments must be scheduled

for the beginning of each meeting. In an emergency, the executive

board may take action on an item which is not listed on the agenda

as an item on which action may be taken.

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

of the association impose more stringent standards, the executive

board shall review at one of its meetings:

(a) A current reconciliation of the operating account of the

association;

(b) A current reconciliation of the reserve account of the

association;

compared to the budget for that account for the current year;

(d) The latest account statements prepared by the financial

institutions in which the accounts of the association are maintained;

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

quarterly basis, for the operating and reserve accounts of the

association; and

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

arbitration or mediation in which the association is a party.

7. The secretary or other officer specified in the bylaws shall

cause minutes [of a] to be recorded or otherwise taken at each

meeting of the executive board . [of an association must be] Not

more than 30 days after each such 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 . [in accordance with the provisions of subsection 5

of NRS 116.3108.] A copy of the minutes or a summary of the

minutes must be provided to any unit’s owner upon request and, if

required by the executive board, upon payment to the association

of the cost of providing the copy to the unit’s owner.

8. Except as otherwise provided in subsection 9 and NRS

116.31085, the minutes of each meeting of the executive board

must include:

(a) The date, time and place of the meeting;

(b) Those members of the executive board who were present

and those members who were absent at the meeting;

at the meeting;

(d) A record of each member’s vote on any matter decided by

vote at the meeting; and

(e) The substance of remarks made by any unit’s owner who

addresses the executive board at the meeting if he requests that

the minutes reflect his remarks or, if he has prepared written

remarks, a copy of his prepared remarks if he submits a copy for

inclusion.

9. The executive board may establish reasonable limitations

on materials, remarks or other information to be included in the

minutes of its meetings.

10. The association shall maintain the minutes of each

meeting of the executive board until the common-interest

community is terminated.

11. A unit’s owner may record on audiotape or any other

means of sound reproduction a meeting of the executive board,

unless the executive board is meeting in executive session, if the

unit’s owner, before recording the meeting, provides notice of his

intent to record the meeting to the members of the executive board

and the other units’ owners who are in attendance at the meeting.

12. As used in this section, “emergency” means any occurrence

or combination of occurrences that:

(a) Could not have been reasonably foreseen;

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

the association;

the executive board; and

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

subsection 2 or 5.

Sec. 67. NRS 116.31085 is hereby amended to read as

follows:

116.31085 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 not meet in executive session to

enter into, renew, modify, terminate or take any other action

regarding a contract, unless it is a contract between the

association and an attorney.

3. An executive board may meet in executive session only 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 [;] , or to enter into, renew,

modify, terminate or take any other action regarding a contract

between the association and the attorney.

(b) Discuss [matters relating to personnel; or

competence, or physical or mental health of a community

manager or an employee of the association.

violation of the governing documents , [alleged to have been

committed by a unit’s owner,] including, without limitation, the

failure to pay an assessment . [, except as otherwise provided in

subsection 3.

3.] (d) Discuss the alleged failure of a unit’s owner to adhere

to a schedule required pursuant to section 47 of this act if the

alleged failure may subject the unit’s owner to a construction

penalty.

4. An executive board shall meet in executive session to hold a

hearing on an alleged violation of the governing documents unless

the [unit’s owner who allegedly committed] person who may be

sanctioned for the alleged violation requests in writing that the

hearing be conducted by the executive board at an open meeting.

The [unit’s owner who is alleged to have committed] person who

may be sanctioned for the alleged violation [may] is entitled to

attend the hearing and testify concerning the alleged violation, but

the person may be excluded by the executive board from any other

portion of the hearing, including, without limitation, the

deliberations of the executive board.

[4.] 5. Except as otherwise provided in this subsection, any

matter discussed by the executive board when it meets in executive

session must be generally noted in the minutes of the meeting of the

executive board. The executive board shall maintain minutes of any

decision made pursuant to subsection [3] 4 concerning an alleged

violation and, upon request, provide a copy of the decision to the

[unit’s owner who was the subject of the hearing] person who was

subject to being sanctioned at the hearing or to his designated

representative.

[5.] 6. Except as otherwise provided in subsection [3,] 4, a

unit’s owner is not entitled to attend or speak at a meeting of the

executive board held in executive session.

Sec. 68. NRS 116.3109 is hereby amended to read as follows:

116.3109 1. Except as otherwise provided in this section and

[unless the bylaws] NRS 116.31034, and except when the

governing documents provide otherwise, a quorum is present

throughout any meeting of the association if [persons entitled to

cast 20 percent of the votes that may be cast for election of the

executive board] the number of members of the association who

are present in person or by proxy at the beginning of the meeting [.]

equals or exceeds 20 percent of the total number of voting

members of the association.

2. If the governing documents of an association contain a

quorum requirement for a meeting of the association that is

greater than the 20 percent required by subsection 1 and, after

proper notice has been given for a meeting, the members of the

association who are present in person or by proxy at the meeting

are unable to hold the meeting because a quorum is not present at

the beginning of the meeting, the members who are present in

person at the meeting may adjourn the meeting to a time that is

not less than 48 hours or more than 30 days from the date of the

meeting. At the subsequent meeting:

(a) A quorum shall be deemed to be present if the number of

members of the association who are present in person or by proxy

at the beginning of the subsequent meeting equals or exceeds 20

percent of the total number of voting members of the association;

and

(b) If such a quorum is deemed to be present but the actual

number of members who are present in person or by proxy at the

beginning of the subsequent meeting is less than the number of

members who are required for a quorum under the governing

documents, the members who are present in person or by proxy at

the subsequent meeting may take action only on those matters

that were included as items on the agenda of the original

meeting.

The provisions of this subsection do not change the actual number

of votes that are required under the governing documents for

taking action on any particular matter.

3. Unless the [bylaws] governing documents specify a larger

percentage, a quorum is deemed present throughout any meeting of

the executive board if persons entitled to cast 50 percent of the

votes on that board are present at the beginning of the meeting.

[3. For the purposes of determining whether a quorum is

present for the election of any member of the executive board, only

the secret written ballots that are returned to the association may be

counted.]

Sec. 69. NRS 116.311 is hereby amended to read as follows:

116.311 1. If only one of several owners of a unit is present

at a meeting of the association, that owner is entitled to cast all the

votes allocated to that unit. If more than one of the owners are

present, the votes allocated to that unit may be cast only in

accordance with the agreement of a majority in interest of the

owners, unless the declaration expressly provides otherwise. There

is majority agreement if any one of the owners cast the votes

allocated to that unit without protest made promptly to the person

presiding over the meeting by any of the other owners of the unit.

2. Except as otherwise provided in this section, votes allocated

to a unit may be cast pursuant to a proxy executed by a unit’s

owner. A unit’s owner may give a proxy only to a member of his

immediate family, a tenant of the unit’s owner who resides in the

common-interest community , [or] another unit’s owner who

resides in the common-interest community[.] , or to a delegate or

representative when authorized pursuant to section 46 of this act.

If a unit is owned by more than one person, each owner of the unit

may vote or register protest to the casting of votes by the other

owners of the unit through an executed proxy. A unit’s owner may

revoke a proxy given pursuant to this section only by actual notice

of revocation to the person presiding over a meeting of the

association. [A proxy is void if:

(a) It is not dated or purports]

3. Before a vote may be cast pursuant to a proxy:

(a) The proxy must be dated.

(b) The proxy must not purport to be revocable without notice .

[;

(b) It does not]

executed.

(d) The proxy must designate [the votes that must be cast on

behalf of] each specific item on the agenda of the meeting for

which the unit’s owner [who] has executed the proxy [; or

(c)] , except that the unit’s owner may execute the proxy

without designating any specific items on the agenda of the

meeting if the proxy is to be used solely for determining whether a

quorum is present for the meeting. If the proxy designates one or

more specific items on the agenda of the meeting for which the

unit’s owner has executed the proxy, the proxy must indicate, for

each specific item designated in the proxy, whether the holder of

the proxy must cast a vote in the affirmative or the negative on

behalf of the unit’s owner. If the proxy does not indicate whether

the holder of the proxy must cast a vote in the affirmative or the

negative for a particular item on the agenda of the meeting, the

proxy must be treated, with regard to that particular item, as if the

unit’s owner were present but not voting on that particular item.

(e) The holder of the proxy [does not] must disclose at the

beginning of the meeting for which the proxy is executed the

number of proxies pursuant to which [he] the holder will be casting

votes . [and the voting instructions received for each proxy.]

4. A proxy terminates immediately after the conclusion of the

meeting for which it [was] is executed.

5. A vote may not be cast pursuant to a proxy for the election

or removal of a member of the executive board of an association[.

3. Only a vote cast in person, by secret ballot or by proxy, may

be counted.

4.] unless the proxy is exercised through a delegate or

representative authorized pursuant to section 46 of this act.

6. The holder of a proxy may not cast a vote on behalf of the

unit’s owner who executed the proxy in a manner that is contrary

to the proxy.

7. A proxy is void if the proxy or the holder of the proxy

violates any provision of subsections 1 to 6, inclusive.

8. If the declaration requires that votes on specified matters

affecting the common-interest community must be cast by the

lessees of leased units rather than the units’ owners [of] who have

leased the units:

(a) The provisions of subsections 1 [and 2] to 7, inclusive, apply

to the lessees as if they were the units’ owners;

(b) [Units’] The units’ owners who have leased their units to

[other persons] the lessees may not cast votes on those specified

matters; [and]

access to records[,] and other rights respecting those matters as if

they were the units’ owners [.

Units’] ; and

(d) The units’ owners must [also] be given notice, in the manner

provided in NRS 116.3108, of all meetings at which the lessees are

entitled to vote.

[5. No]

9. If any votes are allocated to a unit that is owned by the

association , those votes may not be cast [.

6. Votes cast for the election of a member of the executive

board of an association must be counted in public.] , by proxy or

otherwise, for any purpose.

Sec. 70. NRS 116.31139 is hereby amended to read as

follows:

116.31139 1. [An association may employ a person engaged

in property management for the common-interest community.

2.] Except as otherwise provided in this section, a person

[engaged in property management for a common-interest

community must:

(a) Hold] shall not act as a community manager unless the

person holds a permit [to engage in property management that is

issued pursuant to the provisions of chapter 645 of NRS; or

(b) Hold] or a certificate . [issued by the Real Estate

Commission pursuant to subsection 3.

3. The Real Estate]

2. The Commission shall [provide] by regulation provide 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;

(b) May require applicants to pass an examination in order to

obtain a certificate;

property management for a common-interest community;

(d) Must establish the grounds for initiating disciplinary action

against a person to whom a certificate has been issued, including,

without limitation, the grounds for placing conditions, limitations

or restrictions on a certificate and for the suspension or revocation

of a certificate; and

(e) Must establish rules of practice and procedure for conducting

disciplinary hearings.

The Real Estate Division of the Department of Business and

Industry] community managers who hold permits or certificates.

3. The Division may investigate [the property managers to

whom certificates have been issued] any community manager who

holds a permit or certificate to ensure [their compliance] that the

community manager is complying with the standards of practice

adopted [pursuant to this subsection and 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.]

4. In addition to any other remedy or penalty, if the

Commission or a hearing panel, after notice and hearing, finds

that a community manager who holds a permit or certificate has

violated any provision of this chapter or any of the standards of

practice adopted by the Commission, the Commission or the

hearing panel may take appropriate disciplinary action against

the community manager.

5. The provisions of [subsection 2] this section do not apply to:

(a) [A person who is engaged in property management for a

common-interest community on October 1, 1999, and is granted an

exemption from the requirements of subsection 2 by the

Administrator upon demonstration that he is qualified and

competent to engage in property management for a common

-interest community.

(b)] A financial institution[.

(c)] that is engaging in an activity permitted by law.

(b) An attorney who is licensed to practice in this state[.

(d)] and who is acting in that capacity.

(e) An employee of a corporation who manages only] with

respect to the property of the [corporation.

(f)] trust.

(d) A declarant[.

(g)] , an affiliate of the declarant and any officers or

employees of the declarant or an affiliate of the declarant when

engaging in the management of a common-interest community

during the period in which the declarant controls that common

-interest community.

(e) A receiver[.

5. 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.] with

respect to property subject to the receivership.

(f) A member of an executive board or an officer of an

association who is acting solely within the scope of his duties as a

member of the executive board or an officer of the association.

Sec. 71. NRS 116.311391 is hereby amended to read as

follows:

116.311391 The expiration or revocation of a permit or

certificate [for the management of a common-interest community]

by operation of law or by order or decision of [the Real Estate

Commission or a] any agency or court of competent jurisdiction, or

the voluntary surrender of such a permit or certificate by the holder

of the permit or certificate does not:

1. Prohibit the [Real Estate Division of the Department of

Business and Industry or Real Estate] Commission or the Division

from initiating or continuing an investigation of, or action or

disciplinary proceeding against, the holder of the permit or

certificate as authorized pursuant to the provisions of this chapter

or the regulations adopted pursuant thereto; or

2. Prevent the imposition or collection of any fine or penalty

authorized pursuant to the provisions of this chapter or the

regulations adopted pursuant thereto against the holder of the permit

or certificate.

Sec. 72. NRS 116.31151 is hereby amended to read as

follows:

116.31151 1. Except as otherwise provided in subsection 2

and unless the declaration of a common‑interest community

imposes more stringent standards, the executive board of an

association shall, not less than 30 days or more than 60 days before

the beginning of the fiscal year of the association, prepare and

distribute to each unit’s owner a copy of:

(a) The budget for the daily operation of the association. The

budget must include, without limitation, the estimated annual

revenue and expenditures of the association and any contributions

to be made to the reserve account of the association.

(b) The budget to maintain the reserve required by paragraph (b)

of subsection 2 of NRS 116.3115. The budget must include,

without limitation:

(1) The current estimated replacement cost, estimated

remaining life and estimated useful life of each major component of

the common elements;

(2) As of the end of the fiscal year for which the budget is

prepared, the current estimate of the amount of cash reserves that

are necessary, and the current amount of accumulated cash reserves

that are set aside, to repair, replace or restore the major components

of the common elements;

(3) A statement as to whether the executive board has

determined or anticipates that the levy of one or more special

assessments will be required to repair, replace or restore any major

component of the common elements or to provide adequate

reserves for that purpose; and

(4) A general statement describing the procedures used for

the estimation and accumulation of cash reserves pursuant to

subparagraph (2), including, without limitation, the qualifications of

the person responsible for the preparation of the study of the

reserves required by NRS 116.31152.

2. In lieu of distributing copies of the budgets of the

association required by subsection 1, the executive board may

distribute to each unit’s owner a summary of those budgets,

accompanied by a written notice that [the] :

(a) The budgets are available for review at the business office of

the association or some other suitable location within the county

where the common‑interest community is situated or, if it is

situated in more than one county, within one of those counties;

and [that copies]

(b) Copies of the budgets will be provided upon request.

Sec. 73. NRS 116.31152 is hereby amended to read as

follows:

116.31152 1. The executive board of an association shall:

(a) Cause to be conducted , at least once every 5 years, a study

of the reserves required to repair, replace and restore the major

components of the common elements;

(b) Review the results of that study at least annually to

determine if those reserves are sufficient; and

required reserves.

2. The study of the reserves required by subsection 1 must be

conducted by a person who is qualified by training and experience

to conduct such a study, including , without limitation, a member

of the executive board, a unit’s owner or [the property manager of

the association] a community manager who is so qualified. The

study of the reserves must include, without limitation:

(a) A summary of an inspection of the major components of the

common elements that the association is obligated to repair, replace

or restore;

(b) An identification of the major components of the common

elements that the association is obligated to repair, replace or

restore which have a remaining useful life of less than 30 years;

component identified pursuant to paragraph (b);

(d) An estimate of the cost of repair, replacement or restoration

of each major component identified pursuant to paragraph (b)

during and at the end of its useful life; and

(e) An estimate of the total annual assessment that may be

required to cover the cost of repairing, replacement or restoration of

the major components identified pursuant to paragraph (b), after

subtracting the reserves of the association as of the date of the

study.

3. The results of the study of the reserves required by

subsection 1 must be submitted to the Commission not later than

45 days after the date that the executive board of the association

adopts the results of the study.

4. The [Administrator] Commission shall adopt by regulation

the qualifications required for conducting [a] the study of the

reserves required by subsection 1.

5. If a common-interest community was developed as part of

a planned unit development pursuant to chapter 278A of NRS

and is subject to an agreement with a city or county to receive

credit against the amount of the residential construction tax that

is imposed pursuant to NRS 278.4983 and 278.4985, the

association that is organized for the common-interest community

may use the money from that credit for the repair, replacement or

restoration of park facilities and related improvements if:

(a) The park facilities and related improvements are identified

as major components of the common elements of the association;

and

(b) The association is obligated to repair, replace or restore the

park facilities and related improvements in accordance with the

study of the reserves required by subsection 1.

Sec. 74. NRS 116.31155 is hereby amended to read as

follows:

116.31155 1. An association shall:

(a) If the association is required to pay the fee imposed by NRS

78.150 , 82.193 or [82.193,] 86.263, pay to the Administrator a fee

established by regulation of the Administrator for every unit in the

association used for residential use.

(b) If the association is organized as a trust or partnership, pay

to the Administrator a fee established by regulation of the

Administrator for each unit in the association.

2. The fees required to be paid pursuant to this section must be:

(a) Paid at such times as are established by the [Administrator.]

Division.

(b) Deposited with the State Treasurer for credit to the Account

for [the Ombudsman for Owners in] Common-Interest

Communities created [pursuant to] by NRS 116.1117.

administering the Office of the Ombudsman [for Owners in

Common-Interest Communities] and the Commission and not on a

basis which includes any subsidy [for the Office.] beyond those

actual costs. In no event may the fees required to be paid pursuant

to this section exceed $3 per unit.

3. The Administrator may by regulation establish an

administrative penalty to be imposed against an association that

violates the provisions of this section by failing to pay the fees

owed by the association within the times established by the

Division. The administrative penalty that is imposed for each

violation may not exceed 10 percent of the amount of the fees

owed by the association or $500, whichever amount is less.

4. A unit’s owner may not be required to pay any portion of the

fees or any administrative penalties required to be paid pursuant to

this section to a master association and to an association organized

pursuant to NRS 116.3101.

[4.] 5. Upon the payment of the fees and any administrative

penalties required by this section, the Administrator shall provide

to the association evidence that it paid the fees and the

administrative penalties in compliance with this section.

Sec. 75. NRS 116.31158 is hereby amended to read as

follows:

116.31158 1. Each association shall, at the time it pays the

fee required by NRS 116.31155, register with the Ombudsman [for

Owners in Common-Interest Communities] on a form prescribed by

the Ombudsman.

2. The form for registration must include, without limitation,

the information required to be maintained pursuant to paragraph

[(d)] (e) of subsection 4 of NRS 116.1116.

Sec. 76. NRS 116.3116 is hereby amended to read as follows:

116.3116 1. The association has a lien on a unit for any

construction penalty that is imposed against the unit’s owner

pursuant to section 47 of this act, any assessment levied against

that unit or any fines imposed against the unit’s owner from the

time the construction penalty, assessment or fine becomes due.

Unless the declaration otherwise provides, any penalties, fees,

charges, late charges, fines and interest charged pursuant to

paragraphs (j), (k) and (l) of subsection 1 of NRS 116.3102 are

enforceable as assessments under this section. If an assessment is

payable in installments, the full amount of the assessment is a lien

from the time the first installment thereof becomes due.

2. A lien under this section is prior to all other liens and

encumbrances on a unit except:

(a) Liens and encumbrances recorded before the recordation of

the declaration and, in a cooperative, liens and encumbrances which

the association creates, assumes or takes subject to;

(b) A first security interest on the unit recorded before the date

on which the assessment sought to be enforced became delinquent

[,] or, in a cooperative, the first security interest encumbering only

the unit’s owner’s interest and perfected before the date on which

the assessment sought to be enforced became delinquent; and

assessments or charges against the unit or cooperative.

The lien is also prior to all security interests described in paragraph

(b) to the extent of the assessments for common expenses based on

the periodic budget adopted by the association pursuant to NRS

116.3115 which would have become due in the absence of

acceleration during the 6 months immediately preceding institution

of an action to enforce the lien. This subsection does not affect the

priority of mechanics’ or materialmen’s liens, or the priority of

liens for other assessments made by the association.

3. Unless the declaration otherwise provides, if two or more

associations have liens for assessments created at any time on the

same property, those liens have equal priority.

4. Recording of the declaration constitutes record notice and

perfection of the lien. No further recordation of any claim of lien for

assessment under this section is required.

5. A lien for unpaid assessments is extinguished unless

proceedings to enforce the lien are instituted within 3 years after the

full amount of the assessments becomes due.

6. This section does not prohibit actions to recover sums for

which subsection 1 creates a lien or prohibit an association from

taking a deed in lieu of foreclosure.

7. A judgment or decree in any action brought under this

section must include costs and reasonable attorney’s fees for the

prevailing party.

8. The association , upon written request , shall furnish to a

unit’s owner a statement setting forth the amount of unpaid

assessments against the unit. If the interest of the unit’s owner is

real estate [,] or if a lien for the unpaid assessments may be

foreclosed under NRS 116.31162 to 116.31168, inclusive, the

statement must be in recordable form. The statement must be

furnished within 10 business days after receipt of the request and is

binding on the association, the executive board and every unit’s

owner.

9. In a cooperative, upon nonpayment of an assessment on a

unit, the unit’s owner may be evicted in the same manner as

provided by law in the case of an unlawful holdover by a

commercial tenant, and :

(a) In a cooperative where the owner’s interest in a unit is real

estate under NRS 116.1105, the association’s lien may be

foreclosed [as provided by this section or by] under NRS

116.31162 to 116.31168, inclusive.

[10.] (b) In a cooperative where the owner’s interest in a unit is

personal property [(] under NRS 116.1105 , [),] the association’s

lien [may] :

(1) May be foreclosed [in like manner] as a security interest

under NRS 104.9101 to 104.9709, inclusive [.] ; or

(2) If the declaration so provides, may be foreclosed under

NRS 116.31162 to 116.31168, inclusive.

Sec. 77. NRS 116.31162 is hereby amended to read as

follows:

116.31162 1. Except as otherwise provided in subsection 4,

in a condominium, in a planned community, in a cooperative

where the owner’s interest in a unit is real estate [as determined

pursuant to] under NRS 116.1105, or [a planned community,] in a

cooperative where the owner’s interest in a unit is personal

property under NRS 116.1105 and the declaration provides that a

lien may be foreclosed under NRS 116.31162 to 116.31168,

inclusive, 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] Not less than 30 days after mailing the notice of

delinquent assessment pursuant to paragraph (a), 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

the amount of the lien, including costs, fees and expenses incident

to its enforcement, for [60] 90 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] 90 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, and at

the address of the unit.

4. The association may not foreclose a lien by sale [for the

assessment of] based on a fine or penalty for a violation of the

[declaration, bylaws, rules or regulations] governing documents of

the association [, unless the violation is of a type that threatens]

unless:

(a) The violation threatens the health, safety or welfare of the

residents of the common-interest community [.] ; or

(b) The penalty is imposed for failure to adhere to a schedule

required pursuant to section 47 of this act.

Sec. 78. NRS 116.311635 is hereby amended to read as

follows:

116.311635 The association or other person conducting the

sale shall also, after the expiration of the [60] 90 days and before

selling the unit:

1. Give notice of the time and place of the sale in the manner

and for a time not less than that required by law for the sale of real

property upon execution, except that a copy of the notice of sale

must be mailed, on or before the date of first publication or posting,

by certified or registered mail, return receipt requested, to the unit’s

owner or his successor in interest at his address , if known, and to

the address of the unit.

2. Mail, on or before the date of first publication or posting, a

copy of the notice by first-class mail to:

(a) Each person entitled to receive a copy of the notice of default

and election to sell notice under NRS 116.31163; [and]

(b) The holder of a recorded security interest or the purchaser of

the unit, if either of them has notified the association, before the

mailing of the notice of sale, of the existence of the security

interest, lease or contract of sale, as applicable [.] ; and

Sec. 79. NRS 116.31175 is hereby amended to read as

follows:

116.31175 1. Except as otherwise provided in this

subsection, the executive board of an association shall, upon the

written request of a unit’s owner, make available the books, records

and other papers of the association for review during the regular

working hours of the association[.] , including, without limitation,

all contracts to which the association is a party and all records

filed with a court relating to a civil or criminal action to which the

association is a party. The provisions of this subsection do not

apply to:

(a) The personnel records of the employees of the association [;

and] , except for those records relating to the number of hours

worked and the salaries and benefits of those employees;

(b) The records of the association relating to another unit’s

owner [.] , except for those records described in subsection 2; and

2. The executive board of an association shall maintain a

general record concerning each violation of the governing

documents, other than a violation involving a failure to pay an

assessment, for which the executive board has imposed a fine, a

construction penalty or any other sanction. The general record:

(a) Must contain a general description of the nature of the

violation and the type of the sanction imposed. If the sanction

imposed was a fine or construction penalty, the general record

must specify the amount of the fine or construction penalty.

(b) Must not contain the name or address of the person against

whom the sanction was imposed or any other personal

information which may be used to identify the person or the

location of the unit, if any, that is associated with the violation.

system or data system that allows a unit’s owner to search and

review the general records concerning violations of the governing

documents.

3. If the executive board refuses to allow a unit’s owner to

review the books, records or other papers of the association, the

Ombudsman [for Owners in Common-Interest Communities] may:

(a) On behalf of the unit’s owner and upon written request,

review the books, records or other papers of the association during

the regular working hours of the association; and

(b) If he is denied access to the books, records or other papers,

request the Commission , or any member thereof acting on behalf

of the Commission, to issue a subpoena for their production.

4. The books, records and other papers of an association

must be maintained for at least 10 years. The provisions of this

subsection do not apply to:

(a) The minutes of a meeting of the units’ owners which must

be maintained in accordance with NRS 116.3108; or

(b) The minutes of a meeting of the executive board which

must be maintained in accordance with NRS 116.31083.

5. The executive board shall not require a unit’s owner to pay

an amount in excess of $10 per hour to review any books, records,

contracts or other papers of the association pursuant to the

provisions of this section.

Sec. 80. NRS 116.31177 is hereby amended to read as

follows:

116.31177 1. The executive board of an association shall

maintain and make available for review at the business office of the

association or some other suitable location [:] within the county

where the common‑interest community is situated or, if it is

situated in more than one county, within one of those counties:

(a) The financial statement of the association;

(b) The budgets of the association required to be prepared

pursuant to NRS 116.31151; and

conducted pursuant to NRS 116.31152.

2. The executive board shall provide a copy of any of the

records required to be maintained pursuant to subsection 1 to a

unit’s owner or the Ombudsman [for Owners in Common-Interest

Communities] within 14 days after receiving a written request

therefor. The executive board may charge a fee to cover the actual

costs of preparing a copy, but not to exceed 25 cents per page.

Sec. 81. NRS 116.3118 is hereby amended to read as follows:

116.3118 1. The association shall keep financial records

sufficiently detailed to enable the association to comply with NRS

116.4109.

2. All financial and other records of the association must be :

(a) Maintained and made available for review at the business

office of the association or some other suitable location within the

county where the common‑interest community is situated or, if it

is situated in more than one county, within one of those counties;

and

(b) Made reasonably available for any unit’s owner and his

authorized agents to inspect, examine, photocopy and audit.

Sec. 82. NRS 116.4108 is hereby amended to read as follows:

116.4108 1. A person required to deliver a public offering

statement pursuant to subsection 3 of NRS 116.4102 shall provide a

purchaser with a copy of the current public offering statement not

later than the date [of any contract of sale.] on which an offer to

purchase becomes binding on the purchaser. Unless the purchaser

has personally inspected the unit, the purchaser may cancel, by

written notice, the contract of purchase until midnight of the fifth

calendar day following the date of execution of the contract, and the

contract for purchase must contain a provision to that effect.

2. If a purchaser elects to cancel a contract pursuant to

subsection 1, he may do so by hand delivering notice thereof to the

offeror or by mailing notice thereof by prepaid United States mail

to the offeror or to his agent for service of process. Cancellation is

without penalty, and all payments made by the purchaser before

cancellation must be refunded promptly.

3. If a person required to deliver a public offering statement

pursuant to subsection 3 of NRS 116.4102 fails to provide a

purchaser to whom a unit is conveyed with a current public offering

statement, the purchaser is entitled to actual damages, rescission or

other relief, but if the purchaser has accepted a conveyance of the

unit, he is not entitled to rescission.

Sec. 83. NRS 116.4109 is hereby amended to read as follows:

116.4109 1. 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:] an offer to purchase a unit

becomes binding on the purchaser:

(a) A copy of the declaration, other than any plats and plans, the

bylaws, the rules or regulations of the association and the

information statement required by NRS 116.41095;

(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;

financial statement for the association [;] , which must include a

summary of the financial components of the study of the reserves

of the association required by NRS 116.31152; 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.]

subsection 1. 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.

4. Upon the request of a unit’s owner, a purchaser to whom

the unit’s owner has provided a certificate pursuant to subsection

1 or an authorized agent of the unit’s owner or the purchaser, the

association shall make the entire study of the reserves of the

association which is required by NRS 116.31152 reasonably

available for the unit’s owner, purchaser or authorized agent to

inspect, examine, photocopy and audit. The study must be made

available at the business office of the association or some other

suitable location within the county where the common‑interest

community is situated or, if it is situated in more than one county,

within one of those counties.

Sec. 84. NRS 116.41095 is hereby amended to read as

follows:

116.41095 The information statement required by NRS

116.4103 and 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, replace and restore

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

the repair, replacement and restoration 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[.] and

116.4109.

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.

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. 85. NRS 38.300 is hereby amended to read as follows:

38.300 As used in NRS 38.300 to 38.360, inclusive, unless the

context otherwise requires:

1. “Assessments” means:

(a) Any charge which an association may impose against an

owner of residential property pursuant to a declaration of

covenants, conditions and restrictions, including any late charges,

interest and costs of collecting the charges; and

(b) Any penalties, fines, fees and other charges which may be

imposed by an association pursuant to paragraphs (j), (k) and (l) of

subsection 1 of NRS 116.3102.

2. “Association” has the meaning ascribed to it in

NRS 116.110315.

3. “Civil action” includes an action for money damages or

equitable relief. The term does not include an action in equity for

injunctive relief in which there is an immediate threat of irreparable

harm, or an action relating to the title to residential property.

4. “Division” means the Real Estate Division of the

Department of Business and Industry.

5. “Residential property” includes, but is not limited to, real

estate within a planned community subject to the provisions of

chapter 116 of NRS. The term does not include commercial

property if no portion thereof contains property which is used for

residential purposes.

Sec. 86. NRS 38.330 is hereby amended to read as follows:

38.330 1. If all parties named in a written claim filed

pursuant to NRS 38.320 agree to have the claim submitted for

mediation, the parties shall reduce the agreement to writing and

shall select a mediator from the list of mediators maintained by the

Division pursuant to NRS 38.340. Any mediator selected must be

available within the geographic area. If the parties fail to agree

upon a mediator, the Division shall appoint a mediator from the list

of mediators maintained by the Division. Any mediator appointed

must be available within the geographic area. Unless otherwise

provided by an agreement of the parties, mediation must be

completed within 60 days after the parties agree to mediation. Any

agreement obtained through mediation conducted pursuant to this

section must, within 20 days after the conclusion of mediation, be

reduced to writing by the mediator and a copy thereof provided to

each party. The agreement may be enforced as any other written

agreement. Except as otherwise provided in this section, the parties

are responsible for all costs of mediation conducted pursuant to this

section.

2. If all the parties named in the claim do not agree to

mediation, the parties shall select an arbitrator from the list of

arbitrators maintained by the Division pursuant to NRS 38.340.

Any arbitrator selected must be available within the geographic

area. If the parties fail to agree upon an arbitrator, the Division shall

appoint an arbitrator from the list maintained by the Division. Any

arbitrator appointed must be available within the geographic area.

Upon appointing an arbitrator, the Division shall provide the name

of the arbitrator to each party.

3. The Division may provide for the payment of the fees for a

mediator or an arbitrator selected or appointed pursuant to this

section from the Account for [the Ombudsman for Owners in]

Common-Interest Communities created [pursuant to] by NRS

116.1117, to the extent that :

(a) The Commission for Common-Interest Communities

approves the payment; and

(b) There is money [is] available in the account for this purpose.

4. Except as otherwise provided in this section and except

where inconsistent with the provisions of NRS 38.300 to 38.360,

inclusive, the arbitration of a claim pursuant to this section must be

conducted in accordance with the provisions of NRS 38.231,

38.232, 38.233, 38.236 to 38.239, inclusive, 38.242 and 38.243. At

any time during the arbitration of a claim relating to the

interpretation, application or enforcement of any covenants,

conditions or restrictions applicable to residential property or any

bylaws, rules or regulations adopted by an association, the

arbitrator may issue an order prohibiting the action upon which the

claim is based. An award must be made within 30 days after the

conclusion of arbitration, unless a shorter period is agreed upon by

the parties to the arbitration.

5. If all the parties have agreed to nonbinding arbitration, any

party to the arbitration may, within 30 days after a decision and

award have been served upon the parties, commence a civil action

in the proper court concerning the claim which was submitted for

arbitration. Any complaint filed in such an action must contain a

sworn statement indicating that the issues addressed in the

complaint have been arbitrated pursuant to the provisions of NRS

38.300 to 38.360, inclusive. If such an action is not commenced

within that period, any party to the arbitration may, within 1 year

after the service of the award, apply to the proper court for a

confirmation of the award pursuant to NRS 38.239.

6. If all the parties agree in writing to binding arbitration, the

arbitration must be conducted in accordance with the provisions of

this chapter . [38 of NRS.] An award procured pursuant to such

arbitration may be vacated and a rehearing granted upon application

of a party pursuant to the provisions of NRS 38.241.

7. If, after the conclusion of arbitration, a party:

(a) Applies to have an award vacated and a rehearing granted

pursuant to NRS 38.241; or

(b) Commences a civil action based upon any claim which was

the subject of arbitration,

the party shall, if he fails to obtain a more favorable award or

judgment than that which was obtained in the initial arbitration, pay

all costs and reasonable attorney’s fees incurred by the opposing

party after the application for a rehearing was made or after the

complaint in the civil action was filed.

8. Upon request by a party, the Division shall provide a

statement to the party indicating the amount of the fees for a

mediator or an arbitrator selected or appointed pursuant to this

section.

9. As used in this section, “geographic area” means an area

within 150 miles from any residential property or association which

is the subject of a written claim submitted pursuant to NRS 38.320.

Sec. 87. NRS 78.150 is hereby amended to read as follows:

78.150 1. A corporation organized pursuant to the laws of

this state shall, on or before the first day of the second month after

the filing of its articles of incorporation with the Secretary of State,

file with the Secretary of State a list, on a form furnished by him,

containing:

(a) The name of the corporation;

(b) The file number of the corporation, if known;

of all the directors of the corporation;

(d) The mailing or street address, either residence or business, of

each officer and director listed, following the name of the officer or

director;

(e) The name and street address of the resident agent of the

corporation; and

(f) The signature of an officer of the corporation certifying that

the list is true, complete and accurate.

2. The corporation shall annually thereafter, on or before the

last day of the month in which the anniversary date of incorporation

occurs in each year, file with the Secretary of State, on a form

furnished by him, an annual list containing all of the information

required in subsection 1.

3. Each list required by subsection 1 or 2 must be accompanied

by a declaration under penalty of perjury that the corporation has

complied with the provisions of chapter 364A of NRS.

4. Upon filing the list required by:

(a) Subsection 1, the corporation shall pay to the Secretary of

State a fee of $165.

(b) Subsection 2, the corporation shall pay to the Secretary of

State a fee of $85.

5. The Secretary of State shall, 60 days before the last day for

filing each annual list required by subsection 2, 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, a notice of the fee due pursuant to subsection 4 and a

reminder to file the annual list required by subsection 2. Failure of

any corporation to receive a notice or form does not excuse it from

the penalty imposed by law.

6. If the list to be filed pursuant to the provisions of subsection

1 or 2 is defective in any respect or the fee required by subsection 4

or 8 is not paid, the Secretary of State may return the list for

correction or payment.

7. 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 and

must be accompanied by a fee of $85 for filing. A payment

submitted pursuant to this subsection does not satisfy the

requirements of subsection 2 for the year to which the due date is

applicable.

8. 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 evidence of the

payment of the fee required to be paid pursuant to NRS 116.31155

that is provided to the association pursuant to [subsection 4 of] that

section.

Sec. 88. As soon as practicable after July 1, 2003, the

Governor shall appoint to the Commission for Common-Interest

Communities:

1. One member whose term begins on October 1, 2003, and

expires on October 1, 2004.

2. Two members whose terms begin on October 1, 2003, and

expire on October 1, 2005.

3. Two members whose terms begin on October 1, 2003, and

expire on October 1, 2006.

Sec. 89. 1. Notwithstanding the provisions of this act and

except as otherwise provided in subsection 2, during the period

from October 1, 2003, until January 1, 2004, the Real Estate

Commission, the Real Estate Administrator, the Ombudsman for

Owners in Common-Interest Communities and the Real Estate

Division of the Department of Business and Industry shall continue

to exercise all the powers and perform all the duties that, before

October 1, 2003, were assigned to them pursuant to the provisions

of chapter 116 of NRS.

2. During the period described in subsection 1, the

Commission for Common-Interest Communities, the Real Estate

Administrator, the Ombudsman for Owners in Common-Interest

Communities and the Real Estate Division of the Department of

Business and Industry may exercise any power and perform any

duty assigned to them pursuant to the provisions of chapter 116 of

NRS, as amended by this act, if the exercise of the power or the

performance of the duty is necessary as an organizational,

preparatory or preliminary measure to prepare them to carry out

those provisions.

Sec. 90. 1. The State Treasurer shall transfer any balance

remaining unexpended on October 1, 2003, in the Account for the

Ombudsman for Owners in Common-Interest Communities in the

State General Fund to the Account for Common-Interest

Communities which is created by NRS 116.1117, as amended by

this act.

2. On and after October 1, 2003, the State Treasurer shall treat

any outstanding claims against the Account for the Ombudsman for

Owners in Common-Interest Communities as claims against the

Account for Common-Interest Communities.

Sec. 91. 1. Any administrative regulations adopted by an

officer or an agency whose name has been changed or whose

responsibilities have been transferred pursuant to the provisions of

this act to another officer or agency remain in force until amended

by the officer or agency to which the responsibility for the adoption

of the regulations has been transferred.

2. Any contracts or other agreements entered into by an officer

or agency whose name has been changed or whose responsibilities

have been transferred pursuant to the provisions of this act to

another officer or agency are binding upon the officer or agency to

which the responsibility for the administration of the provisions of

the contract or other agreement has been transferred. Such contracts

and other agreements may be enforced by the officer or agency to

which the responsibility for the enforcement of the provisions of the

contract or other agreement has been transferred.

3. Any action taken by an officer or agency whose name has

been changed or whose responsibilities have been transferred

pursuant to the provisions of this act to another officer or agency

remains in effect as if taken by the officer or agency to which the

responsibility for the enforcement of such actions has been

transferred.

Sec. 92. 1. Not later than July 1, 2005, an association or

master association of a common-interest community shall have

conducted elections of members of the executive board so that the

terms of the members of the executive board are staggered as

required by the provisions of NRS 116.31034, as amended by

section 62 of this act.

2. As used in this section:

(a) “Association” has the meaning ascribed to it in

NRS 116.110315.

(b) “Common-interest community” has the meaning ascribed to

it in NRS 116.110323.

NRS 116.110345.

(d) “Master association” has the meaning ascribed to it in

NRS 116.110358.

Sec. 93. 1. This section and section 88 of this act become

effective on July 1, 2003.

2. Sections 1 to 23, inclusive, 38 to 69, inclusive, 72 to 87,

inclusive, and 89 to 92, inclusive, of this act become effective on

October 1, 2003.

3. Sections 24 to 37, inclusive, 70 and 71 of this act become

effective on October 1, 2003, for the purpose of adopting

regulations and on January 1, 2004, for all other purposes.

4. Sections 25 and 26 of this act expire by limitation on the

date on which the provisions of 42 U.S.C. § 666 requiring each

state to establish procedures under which the state has authority to

withhold or suspend, or to restrict the use of professional,

occupational and recreational licenses of persons who:

(a) Have failed to comply with a subpoena or warrant relating to

a proceeding to determine the paternity of a child or to establish or

enforce an obligation for the support of a child; or

(b) Are in arrears in the payment for the support of one or more

children,

are repealed by the Congress of the United States, whichever is

earlier.

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