requires two-thirds majority vote (§§ 16, 17, 22, 28, 38, 53)                                                                                      

                                                                                                  

 

Senate Bill No. 325–Senator O’Connell

 

March 17, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes to provisions governing common-interest communities. (BDR 10‑176)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: Yes.

 

~

 

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

 

AN ACT relating to common-interest communities; establishing the Commission for Common-Interest Communities; requiring the Commission to take certain actions related to such communities; requiring the Administrator of the Real Estate Division of the Department of Business and Industry to provide certain training to the members of the Commission; requiring the Attorney General to render opinions in certain circumstances; requiring a community manager to be certified by the Commission or be issued a permit by the Real Estate Division; providing for a complaint procedure if a person has been injured by certain violations; permitting the Commission to issue subpoenas in certain circumstances; providing for the immunity of the Commission and its members for certain actions; revising the provisions regarding the assessment and collection of certain fees by an association of a common-interest community; revising the provisions creating a certain account in the State General Fund; providing for the administration of a certain account in the State General Fund; making various other changes related to common-interest communities; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

2-1  Section 1. Chapter 116 of NRS is hereby amended by adding

2-2  thereto the provisions set forth as sections 2 to 43, inclusive, of this

2-3  act.

2-4  Sec. 2.  “Certificate” means a certificate for the management

2-5  of a common-interest community issued by the Commission.

2-6  Sec. 3.  “Commission” means the Commission for Common-

2-7  Interest Communities.

2-8  Sec. 4.  “Community manager” means a person who holds a

2-9  certificate or permit and provides for the management of a

2-10  common-interest community.

2-11      Sec. 5.  “Complaint” means a complaint of a violation of a

2-12  provision of this chapter filed pursuant to section 28 of this act.

2-13      Sec. 6.  “Division” means the Real Estate Division of the

2-14  Department of Business and Industry.

2-15      Sec. 7.  “Hearing panel” means the hearing panel designated

2-16  by the Commission to conduct a hearing on a complaint pursuant

2-17  to the provisions of section 15 of this act.

2-18      Sec. 8.  “Management of a common-interest community”

2-19  means the physical, administrative or financial maintenance and

2-20  management of a common-interest community, or the supervision

2-21  of those activities for a fee, commission or other valuable

2-22  consideration.

2-23      Sec. 9.  “Ombudsman” means the Ombudsman for Owners in

2-24  Common-Interest Communities.

2-25      Sec. 10.  “Party to the complaint” means:

2-26      1.  The person filing the complaint.

2-27      2.  The person against whom the complaint is filed.

2-28      3.  The Division.

2-29      Sec. 11.  “Permit” means a permit to engage in property

2-30  management issued pursuant to the provisions of chapter 645 of

2-31  NRS.

2-32      Sec. 12.  1.  The Commission for Common-Interest

2-33  Communities, consisting of five members appointed by the

2-34  Governor, is hereby created.

2-35      2.  The Governor shall appoint to the Commission:

2-36      (a) One member who is a unit’s owner residing in this state

2-37  and who has served as a member of the executive board of an

2-38  association;

2-39      (b) One member who is in the business of developing common-

2-40  interest communities in this state;

2-41      (c) One member who holds a permit or certificate;

2-42      (d) One member who is licensed as a certified public account

2-43  pursuant to chapter 628; and

2-44      (e) One member who is licensed as an attorney in this state.

3-1  3.  At least three members of the Commission must be

3-2  residents of a county whose population is 400,000 or more.

3-3  4.  Each member of the Commission shall have resided in a

3-4  common-interest community or have been actively engaged in a

3-5  business related to common-interest communities for not less than

3-6  3 years immediately preceding the date of his appointment.

3-7  5.  After the initial terms, each member of the Commission

3-8  shall serve a term of 3 years. Each member may serve no more

3-9  than two consecutive full terms. If a vacancy occurs during a

3-10  member’s term, the Governor shall appoint a person qualified

3-11  under this section to replace the member for the remainder of the

3-12  unexpired term.

3-13      6.  While engaged in the business of the Commission, each

3-14  member is entitled to receive:

3-15      (a) A salary of not more than $80 per day, as established by the

3-16  Commission; and

3-17      (b) The per diem allowance and travel expenses provided for

3-18  state officers and employees generally.

3-19      Sec. 13.  1.  The Commission shall, at the first meeting of

3-20  each fiscal year, elect from its members a Chairman, a Vice

3-21  Chairman and a Secretary.

3-22      2.  The Commission shall meet at least once each calendar

3-23  quarter and at other times on the call of the Chairman or a

3-24  majority of its members.

3-25      3.  A majority of the members of the Commission constitutes a

3-26  quorum for the transaction of all business.

3-27      Sec. 14.  The Commission may employ experts, attorneys,

3-28  investigators, consultants and other personnel necessary to the

3-29  discharge of its duties.  

3-30      Sec. 15.  1.  All money received by the Commission must be

3-31  deposited into the Account for Common-Interest Communities in

3-32  the State General Fund and paid out on the order of the

3-33  Commission for the purposes set forth in NRS 116.1117.

3-34      2.  The Commission may delegate to a hearing panel the

3-35  authority of the Commission to take any disciplinary action

3-36  pursuant to sections 28 to 37, inclusive, of this act, including the

3-37  authority to impose and collect fines and penalties. Fines and

3-38  penalties imposed by a hearing panel must be deposited into the

3-39  Account for Common-Interest Communities in the State General

3-40  Fund and paid out on the order of the Commission for the

3-41  purposes set forth in NRS 116.1117.

3-42      Sec. 16.  1.  The Commission, or the Administrator with the

3-43  approval of the Commission, may from time to time adopt

3-44  reasonable regulations for the administration of this chapter.

3-45  When regulations are proposed by the Administrator, in addition

4-1  to other notices required by law, he shall provide copies of the

4-2  proposed regulations to the Commission not later than 30 days

4-3  before the next Commission meeting. The Commission shall

4-4  approve, amend or disapprove any proposed regulations at that

4-5  meeting.

4-6  2.  All regulations adopted by the Commission, or adopted by

4-7  the Administrator with the approval of the Commission, must be

4-8  published by the Division and offered for sale at a reasonable fee.

4-9  Sec. 17.  The Commission shall:

4-10      1.  Collect and maintain data on:

4-11      (a) The number and kind of common-interest communities in

4-12  this state;

4-13      (b) The effectiveness of the provisions of this chapter;

4-14      (c) Reported violations of the provisions of this chapter;

4-15      (d) The use of the arbitration and mediation procedures set

4-16  forth in NRS 38.300 to 38.360, inclusive, including, but not limited

4-17  to:

4-18          (1) The costs related to the arbitration and mediation

4-19  procedures;

4-20          (2) The ease of use of the arbitration and mediation

4-21  procedures; and

4-22          (3) The decisions made under the arbitration and mediation

4-23  procedures;

4-24      (e) The number of completed foreclosures or trustee’s sales

4-25  conducted for the failure to pay assessments or fines levied against

4-26  a unit’s owner;

4-27      (f) The studies of the reserves of a common-interest

4-28  community conducted pursuant to the provisions of NRS

4-29  116.31152; and

4-30      (g) Any other issue that the Commission determines to be

4-31  relevant to common-interest communities.

4-32      2.  Develop and promote guidelines detailing the:

4-33      (a) Procedures for conducting:

4-34          (1) A meeting of an executive board of a common-interest

4-35  community;

4-36          (2) A general meeting of the members of a common-interest

4-37  community; and

4-38          (3) An election of officers to the executive board of a

4-39  common-interest community; and

4-40      (b) Procedures to enforce the governing documents of a

4-41  common-interest community.

4-42      3.  Provide for sale to the public any guidelines developed by

4-43  the Commission.

4-44      Sec. 18.  The Commission may:

5-1  1.  Delegate to the Division any of the authority granted to the

5-2  Commission pursuant to the provisions of sections 2 to 43,

5-3  inclusive, of this act;

5-4  2.  Subsidize the costs of proceedings conducted pursuant to

5-5  NRS 38.300 to 38.360, inclusive;

5-6  3.  Subsidize educational programs designed for unit’s

5-7  owners, members of executive boards of common-interest

5-8  communities or officers of common-interest communities;

5-9  4.  Accept donations or the contribution of services for the

5-10  work of the Commission from any source; and

5-11      5.  Enter into agreements for cooperation with other entities

5-12  as needed to carry out the duties of the Commission.

5-13      Sec. 19.  1.  The Administrator shall provide for instruction

5-14  in the rules of procedure and substantive law to a member of the

5-15  Commission within 6 months after the appointment of that

5-16  member to the Commission.

5-17      2.  A member of the Commission shall attend the instruction

5-18  provided by the Administrator.

5-19      Sec. 20.  The Attorney General shall render to the Division

5-20  an opinion upon all questions of law relating to the construction

5-21  or interpretation of this chapter, or arising in the administration

5-22  thereof, submitted to him by the Division, the Real Estate

5-23  Commission or the Commission.

5-24      Sec. 21.  The Commission shall adopt regulations relating to

5-25  the issuance of a certificate, including, but not limited to,

5-26  establishing:

5-27      1.  The requirements for the issuance or renewal of a

5-28  certificate;

5-29      2.  An examination for issuance or renewal of a certificate;

5-30      3.  A code regulating the professional conduct of a community

5-31  manager; and

5-32      4.  A schedule of fees for any services provided by the

5-33  Commission related to the issuance or renewal of a certificate.

5-34      Sec. 22.  The Commission may:

5-35      1.  Hold hearings and conduct investigations concerning any

5-36  matter related to an application for a certificate. In the hearings

5-37  and investigations, the Commission may require the presentation

5-38  of evidence.

5-39      2.  Refuse to issue a certificate to an applicant if the

5-40  Commission determines that the applicant:

5-41      (a) Is not of good moral character as it relates to the

5-42  management of a common-interest community;

5-43      (b) Has submitted a false credential to the Commission;

5-44      (c) Has been disciplined in another state, a possession or

5-45  territory of the United States or the District of Columbia in

6-1  connection with the practice of management of a common-interest

6-2  community;

6-3  (d) Has committed an act in another state, a possession or

6-4  territory of the United States or the District of Columbia in

6-5  connection with the practice of management of a common-interest

6-6  community that would be a violation of a provision of this chapter

6-7  if the act were committed in this state; or

6-8  (e) Has failed to comply with any of the requirements for a

6-9  certificate.

6-10      3.  Collect any fee established for the issuance or renewal of a

6-11  certificate.

6-12      4.  Publish or supply a reference manual or study guide for

6-13  licensees or applicants for licenses, and may offer it for sale at a

6-14  reasonable fee.

6-15      Sec. 23.  A certificate issued pursuant to the provisions of this

6-16  chapter is a privilege that may be revoked in accordance with the

6-17  disciplinary procedures set forth in this chapter and in regulations

6-18  adopted by the Commission pursuant thereto, and no holder of

6-19  such a certificate acquires thereby any vested right.

6-20      Sec. 24.  An application for a certificate must:

6-21      1.  Include the social security number of the applicant; and

6-22      2.  Be accompanied by the statement required pursuant to

6-23  section 25 of this act.

6-24      Sec. 25.  1.  An applicant for a certificate shall submit to the

6-25  Commission the statement prescribed by the Welfare Division of

6-26  the Department of Human Resources pursuant to NRS 425.520.

6-27  The statement must be completed and signed by the applicant.

6-28      2.  The Commission shall include the statement required

6-29  pursuant to subsection 1 in:

6-30      (a) The application or any other forms that must be submitted

6-31  for the issuance of the certificate; or

6-32      (b) A separate form prescribed by the Commission.

6-33      3.  A certificate may not be issued if the applicant:

6-34      (a) Fails to submit the statement required pursuant to

6-35  subsection 1; or

6-36      (b) Indicates on the statement submitted pursuant to

6-37  subsection 1 that he is subject to a court order for the support of a

6-38  child and is not in compliance with the order or a plan approved

6-39  by the district attorney or other public agency enforcing the order

6-40  for the repayment of the amount owed pursuant to the order.

6-41      4.  If an applicant indicates on the statement submitted

6-42  pursuant to subsection 1 that he is subject to a court order for the

6-43  support of a child and is not in compliance with the order or a

6-44  plan approved by the district attorney or other public agency

6-45  enforcing the order for the repayment of the amount owed

7-1  pursuant to the order, the Commission shall advise the applicant

7-2  to contact the district attorney or other public agency enforcing

7-3  the order to determine the actions that the applicant may take to

7-4  satisfy the arrearage.

7-5  Sec. 26.  1.  If the Commission receives a copy of a court

7-6  order issued pursuant to NRS 425.540 that provides for the

7-7  suspension of all professional, occupational and recreational

7-8  licenses, certificates and permits issued to the holder of a

7-9  certificate, the Commission shall deem the certificate to be

7-10  suspended at the end of the 30th day after the date the court order

7-11  was issued unless the Commission receives a letter issued to the

7-12  holder of the certificate by the district attorney or other public

7-13  agency pursuant to NRS 425.550 stating that the holder of the

7-14  certificate has complied with a subpoena or warrant or has

7-15  satisfied the arrearage pursuant to NRS 425.560.

7-16      2.  The Commission shall reinstate a certificate that has been

7-17  suspended by a district court pursuant to NRS 425.540 if the

7-18  Commission receives a letter issued by the district attorney or

7-19  other public agency pursuant to NRS 425.550 to the holder of the

7-20  certificate that he has complied with the subpoena or warrant or

7-21  has satisfied the arrearage pursuant to NRS 425.560.

7-22      Sec. 27.  1.  The Commission shall adopt regulations

7-23  establishing:

7-24      (a) The grounds for taking disciplinary action against a person

7-25  who has been issued a certificate; and

7-26      (b) The procedures that must be followed for conducting

7-27  disciplinary action.

7-28      2.  Disciplinary action against a person who has been issued a

7-29  certificate may include:

7-30      (a) Placing restrictions or limitations on a certificate;

7-31      (b) Suspending a certificate;

7-32      (c) Revoking a certificate;

7-33      (d) Any other penalty permitted under the law; and

7-34      (e) Any combination of paragraphs (a), (b), (c) and (d).

7-35      Sec. 28.  1.  A person who is aggrieved by any act committed

7-36  in violation of a provision of this chapter may, within 1 year after

7-37  the alleged violation, file a written complaint with the Division

7-38  specifying the relevant facts. The Commission may prescribe

7-39  forms and adopt procedures for the filing of such a complaint.

7-40      2.  A person shall not file a complaint with the Division until

7-41  the person has provided written notice, delivered by certified mail,

7-42  return receipt requested, a minimum of two times over a period of

7-43  15 days, to the last known address of the person committing the

7-44  alleged violation, of:

7-45      (a) The alleged violation;

8-1  (b) Any damages suffered as a result of the violation; and

8-2  (c) Any corrective action proposed to remedy the violation.

8-3  3.  A complaint filed with the Division must specify:

8-4  (a) The alleged violation;

8-5  (b) That the provisions of subsection 2 were complied with

8-6  before filing the complaint;

8-7  (c) Any damages resulting from the violation;

8-8  (d) Any actions taken to resolve the complaint before the filing

8-9  of the complaint with the Division; and

8-10      (e) Whether or not the complaint has been submitted to

8-11  mediation or arbitration pursuant to the provisions of NRS 38.300

8-12  to 38.360, inclusive.

8-13      4.  Except as otherwise provided in subsection 5, the Division

8-14  shall, upon the receipt of such a complaint:

8-15      (a) Provide a copy of the complaint to the Ombudsman; and

8-16      (b) Conduct a preliminary investigation to determine whether

8-17  further action is warranted.

8-18      5.  The Division shall not investigate or take any action on a

8-19  complaint that has been submitted to mediation or arbitration

8-20  pursuant to the provisions of NRS 38.300 to 38.360, inclusive.

8-21      6.  The Commission may require any person who knowingly

8-22  files a false or fraudulent complaint to pay a fine of not more than

8-23  $1,000.

8-24      Sec. 29.  1.  If the Division determines that further action on

8-25  a complaint is warranted after conducting a preliminary

8-26  investigation pursuant to the provisions of section 28 of this act,

8-27  the Division shall forward the complaint to the Commission.

8-28      2.  The Division shall forward all communications, reports,

8-29  depositions and affidavits related to the complaint to the

8-30  Commission at the same time that the complaint is forwarded to

8-31  the Commission.

8-32      Sec. 30.  1.  Upon receipt of a complaint from the Division

8-33  pursuant to the provisions of section 29 of this act, the

8-34  Commission or the hearing panel shall fix a time and place for a

8-35  hearing on the complaint.

8-36      2.  Except as otherwise provided by this section, the

8-37  Commission or the hearing panel shall hold a hearing within 90

8-38  days after the complaint is filed with the Division.

8-39      3.  The Commission or the hearing panel may continue the

8-40  hearing upon its own motion or upon written request of any party

8-41  to the complaint, for good cause shown.

8-42      4.  The Commission or the hearing panel shall provide notice

8-43  of the time, date and place of the hearing to:

8-44      (a) The person filing the complaint; and

8-45      (b) The Division.

9-1  Sec. 31.  Any party to a complaint may be represented by an

9-2  attorney at any proceeding or hearing on the complaint.

9-3  Sec. 32.  The Commission or the hearing panel may conduct

9-4  a hearing telephonically if:

9-5  1.  All parties to the complaint are able to hear and participate

9-6  in all the proceedings of the hearing; and

9-7  2.  Members of the public have an opportunity to listen in on

9-8  all discussions and to hear the votes of the members of the

9-9  Commission or the hearing panel.

9-10      Sec. 33.  1.  The Division shall serve written notice at least

9-11  60 days before the date fixed for the hearing to the person alleged

9-12  to have committed the violation by personal delivery or by mailing

9-13  it by registered or certified mail to his last known address. The

9-14  written notice must include:

9-15      (a) A copy of the complaint filed with the Division;

9-16      (b) A copy of any communications, reports, depositions and

9-17  affidavits in the possession of the Division relating to the

9-18  complaint; and

9-19      (c) Notice of the time, place and date of the hearing.

9-20      2.  The Division shall have a continuing duty to provide the

9-21  person alleged to have committed the violation a copy of any

9-22  communications, reports, depositions or affidavits produced after

9-23  the filing of written notice pursuant to subsection 1.

9-24      Sec. 34.  1.  If the person alleged to have committed the

9-25  violation is a community manager, the Commission or the hearing

9-26  panel shall provide written notice by certified mail to the last

9-27  known address of the employer or supervisor of the community

9-28  manager.

9-29      2.  The written notice must include:

9-30      (a) A copy of the complaint filed with the Division; and

9-31      (b) Notice of the time, place and date of the hearing.

9-32      Sec. 35.  1.  The person alleged to have committed the

9-33  violation shall file a response to the complaint within 45 days after

9-34  the date the notice was provided pursuant to the provisions of

9-35  section 33 of this act.

9-36      2.  The response must:

9-37      (a) Contain:

9-38          (1) An admission or denial of each allegation contained in

9-39  the complaint; and

9-40          (2) Any affirmative defenses that the person will assert; and

9-41      (b) Be filed with the Division by personal delivery or by

9-42  mailing it by registered or certified mail.

9-43      3.  The Division shall forward any response filed with the

9-44  Division to the Commission or the hearing panel.

10-1      Sec. 36.  1.  The Commission or the hearing panel shall

10-2  render a decision on a complaint within 20 days after the hearing

10-3  thereon.

10-4      2.  The Commission or the hearing panel shall notify all

10-5  parties to the complaint of its decision in writing, by certified mail,

10-6  return receipt requested.

10-7      3.  The decision must include the findings of fact and the

10-8  conclusions of law of the Commission or the hearing panel.

10-9      Sec. 37.  If a decision on a complaint is made by a hearing

10-10  panel, the effect of the decision shall be stayed until reviewed and

10-11  approved by the Commission if:

10-12     1.  Any party affected by the decision files for an appeal of the

10-13  decision with the Commission within 20 days after notice of the

10-14  decision was mailed pursuant to section 36 of this act; or

10-15     2.  The Commission provides written notice to all parties of

10-16  the complaint of its intention to review the decision of a hearing

10-17  panel within 20 days after notice of the decision was mailed

10-18  pursuant to section 36 of this act.

10-19     Sec. 38.  1.  If the Commission or the hearing panel

10-20  determines, after notice and hearing, that any person has violated

10-21  a provision of this chapter, the Commission may:

10-22     (a) Issue an order to cease and desist from engaging in such

10-23  conduct;

10-24     (b) Issue an order to take affirmative action to correct

10-25  conditions resulting from the unlawful conduct; or

10-26     (c) Take any combination of the actions authorized by

10-27  paragraphs (a) and (b).

10-28     2.  If a person fails to comply with the order issued pursuant

10-29  to subsection 1, the Commission, upon notice and following a

10-30  hearing, may impose a fine upon that person of not more than

10-31  $1,000 for each instance of noncompliance.

10-32     Sec. 39.  1.  If the Commission determines that any person

10-33  has violated or will violate a provision of this chapter, the

10-34  Commission may bring an action in the district court for the

10-35  county in which the person resides, or if the person does not reside

10-36  in this state, in any court of competent jurisdiction in this state, to

10-37  enjoin him from engaging in the violation or from doing any act

10-38  in furtherance of the violation.

10-39     2.  The action must be brought in the name of the State of

10-40  Nevada.

10-41     3.  An injunction:

10-42     (a) May be issued without proof of actual damage sustained by

10-43  any person.

10-44     (b) Does not prevent the criminal prosecution and punishment

10-45  of a person who violates a provision of this chapter.

11-1      Sec. 40.  1.  To carry out its duties, the Commission, or any

11-2  member thereof, may issue subpoenas to compel the attendance of

11-3  witnesses and the production of books, records and other papers.

11-4      2.  If any person fails to comply with a subpoena issued by the

11-5  Commission pursuant to this section within 10 days after its

11-6  issuance, the Commission may petition the district court for an

11-7  order of the court compelling compliance with the subpoena.

11-8      3.  Upon such a petition, the court shall enter an order

11-9  directing the person subpoenaed to appear before the court at a

11-10  time and place to be fixed by the court in its order, the time to be

11-11  not more than 10 days after the date of the order, and to show

11-12  cause why he has not complied with the subpoena. A certified copy

11-13  must be served upon the person subpoenaed.

11-14     4.  If it appears to the court that the subpoena was regularly

11-15  issued by the Commission, the court shall enter an order

11-16  compelling compliance with the subpoena, and upon failure to

11-17  obey the order, the person must be dealt with as for contempt of

11-18  court.

11-19     Sec. 41.  The rights and remedies set forth in sections 28 to

11-20  40, inclusive, of this act are in addition to any other rights or

11-21  remedies provided by law.

11-22     Sec. 42.  The Commission and any of its members and its

11-23  staff, counsel, investigators, experts, committees, hearing panels,

11-24  hearing officers and consultants are immune from any civil

11-25  liability for any decision or action taken in good faith and without

11-26  malicious intent in response to a complaint filed with the Division.

11-27     Sec. 43.  If a matter governed by this chapter is also governed

11-28  by chapter 82 of NRS and there is a conflict between the

11-29  provisions of this chapter and the provisions of chapter 82 of NRS,

11-30  the provisions of this chapter prevail.

11-31     Sec. 44.  NRS 116.1103 is hereby amended to read as follows:

11-32     116.1103  In the declaration and bylaws (NRS 116.3106),

11-33  unless specifically provided otherwise or the context otherwise

11-34  requires, and in this chapter, the words and terms defined in NRS

11-35  116.110305 to 116.110393, inclusive, and sections 2 to 11,

11-36  inclusive, of this act have the meanings ascribed to them in those

11-37  sections.

11-38     Sec. 45.  NRS 116.11145 is hereby amended to read as

11-39  follows:

11-40     116.11145  1.  To carry out the purposes of this chapter, the

11-41  Real Estate Commission, or any member thereof, may issue

11-42  subpoenas to compel the attendance of witnesses and the production

11-43  of books, records and other papers.

11-44     2.  If any person fails to comply with a subpoena issued by the

11-45  Real Estate Commission pursuant to this section within 10 days

12-1  after its issuance, the Real Estate Commission may petition the

12-2  district court for an order of the court compelling compliance with

12-3  the subpoena.

12-4      3.  Upon such a petition, the court shall enter an order directing

12-5  the person subpoenaed to appear before the court at a time and place

12-6  to be fixed by the court in its order, the time to be not more than 10

12-7  days after the date of the order, and to show cause why he has not

12-8  complied with the subpoena. A certified copy must be served upon

12-9  the person subpoenaed.

12-10     4.  If it appears to the court that the subpoena was regularly

12-11  issued by the Real Estate Commission, the court shall enter an order

12-12  compelling compliance with the subpoena, and upon failure to obey

12-13  the order , the person shall be dealt with as for contempt of court.

12-14     Sec. 46.  NRS 116.1116 is hereby amended to read as follows:

12-15     116.1116  1.  The Office of the Ombudsman for Owners in

12-16  Common-Interest Communities is hereby created within the [Real

12-17  Estate Division of the Department of Business and Industry.]

12-18  Division.

12-19     2.  The Administrator shall appoint the Ombudsman . [for

12-20  Owners in Common-Interest Communities.] The Ombudsman [for

12-21  Owners in Common-Interest Communities] is in the unclassified

12-22  service of the State.

12-23     3.  The Ombudsman [for Owners in Common-Interest

12-24  Communities] must be qualified by training and experience to

12-25  perform the duties and functions of his office.

12-26     4.  The Ombudsman [for Owners in Common-Interest

12-27  Communities] shall:

12-28     (a) Assist in processing claims submitted to mediation or

12-29  arbitration pursuant to NRS 38.300 to 38.360, inclusive;

12-30     (b) Assist owners in common-interest communities to

12-31  understand their rights and responsibilities as set forth in this

12-32  chapter and the governing documents of their associations,

12-33  including, without limitation, publishing materials related to those

12-34  rights and responsibilities;

12-35     (c) Assist persons appointed or elected to serve on executive

12-36  boards of associations to carry out their duties; and

12-37     (d) Compile and maintain a registration of each association

12-38  organized within the state which includes, without limitation:

12-39         (1) The name, address and telephone number of the

12-40  association;

12-41         (2) The name of the [person engaged in property

12-42  management] community manager for the common-interest

12-43  community or the name of the person who manages the property at

12-44  the site of the common-interest community;

13-1          (3) The names, mailing addresses and telephone numbers of

13-2  the members of the executive board of the association;

13-3          (4) The name of the declarant;

13-4          (5) The number of units in the common-interest community;

13-5  and

13-6          (6) The total annual assessment made by the association.

13-7      Sec. 47.  NRS 116.1117 is hereby amended to read as follows:

13-8      116.1117  1.  There is hereby created the Account for [the

13-9  Ombudsman for Owners in] Common-Interest Communities in

13-10  the State General Fund. The Account must be administered by the

13-11  Administrator.

13-12     2.  The fees collected pursuant to NRS 116.31155 must be

13-13  credited to the Account.

13-14     3.  The interest and income earned on the money in the

13-15  Account, after deducting any applicable charges, must be credited to

13-16  the Account.

13-17     4.  The money in the Account must be used solely to defray

13-18  [the] :

13-19     (a) The costs and expenses of administering the Office of the

13-20  Ombudsman [for Owners in Common -Interest Communities and

13-21  for the] ;

13-22     (b) The costs and expenses of the Commission; and

13-23     (c) If authorized by the Commission, the payment of fees for a

13-24  mediator or an arbitrator pursuant to NRS 38.330.

13-25     Sec. 48.  NRS 116.1201 is hereby amended to read as follows:

13-26     116.1201  1.  Except as otherwise provided in this section and

13-27  NRS 116.1203, this chapter applies to all common-interest

13-28  communities created within this state.

13-29     2.  This chapter does not apply to:

13-30     (a) Associations created for the limited purpose of maintaining:

13-31         (1) The landscape of the common elements of a common-

13-32  interest community;

13-33         (2) Facilities for flood control; or

13-34         (3) A rural agricultural residential common-interest

13-35  community.

13-36     (b) A planned community in which all units are restricted

13-37  exclusively to nonresidential use unless the declaration provides that

13-38  [the] this chapter does apply to that planned community. This

13-39  chapter applies to a planned community containing both units that

13-40  are restricted exclusively to nonresidential use and other units that

13-41  are not so restricted[,] only if the declaration so provides or if the

13-42  real estate comprising the units that may be used for residential

13-43  purposes would be a planned community in the absence of the units

13-44  that may not be used for residential purposes.

14-1      (c) Common-interest communities or units located outside of

14-2  this state, but the provisions of NRS 116.4102 to 116.4108,

14-3  inclusive, apply to all contracts for the disposition thereof signed in

14-4  this state by any party unless exempt under subsection 2 of

14-5  NRS 116.4101.

14-6      (d) Except as otherwise provided in this chapter, time shares

14-7  governed by the provisions of chapter 119A of NRS.

14-8      3.  The provisions of this chapter do not:

14-9      (a) Prohibit a common-interest community created before

14-10  January 1, 1992, from providing for separate classes of voting for

14-11  the units’ owners of the association;

14-12     (b) Require a common-interest community created before

14-13  January 1, 1992, to comply with the provisions of NRS 116.2101 to

14-14  116.2122, inclusive;

14-15     (c) Invalidate any assessments that were imposed on or before

14-16  October 1, 1999, by a common-interest community created before

14-17  January 1, 1992; or

14-18     (d) Prohibit a common-interest community created before

14-19  January 1, 1992, from providing for a representative form of

14-20  government.

14-21     4.  The provisions of chapters 117 and 278A of NRS do not

14-22  apply to common-interest communities.

14-23     5.  For the purposes of this section, the [Administrator]

14-24  Commission shall establish, by regulation, the criteria for

14-25  determining whether an association [is created for the limited

14-26  purpose of maintaining the landscape of the common elements of a

14-27  common-interest community, maintaining facilities for flood control

14-28  or maintaining a rural agricultural residential] or a common-interest

14-29  community[.] is exempted from the applicability of this chapter.

14-30     Sec. 49.  NRS 116.31139 is hereby amended to read as

14-31  follows:

14-32     116.31139  1.  An association may employ a [person engaged

14-33  in property management for the common-interest community .]

14-34  community manager.

14-35     2.  Except as otherwise provided in this section, a [person

14-36  engaged in property management for a common-interest]

14-37  community manager must:

14-38     (a) Hold a permit ; [to engage in property management that is

14-39  issued pursuant to the provisions of chapter 645 of NRS;] or

14-40     (b) Hold a certificate issued by the [Real Estate Commission

14-41  pursuant to subsection 3.]

14-42     [3.  The Real Estate Commission shall provide by regulation for

14-43  the issuance of certificates for the management of common-interest

14-44  communities to persons who are not otherwise authorized to engage

15-1  in property management pursuant to the provisions of chapter 645 of

15-2  NRS. The regulations:

15-3      (a) Must establish the qualifications for the issuance of such a

15-4  certificate, including the education and experience required to obtain

15-5  such a certificate;

15-6      (b) May require applicants to pass an examination in order to

15-7  obtain a certificate;

15-8      (c) Must establish standards of practice for persons engaged in

15-9  property management for a common-interest community;

15-10     (d) Must establish the grounds for initiating disciplinary action

15-11  against a person to whom a certificate has been issued, including,

15-12  without limitation, the grounds for placing conditions, limitations or

15-13  restrictions on a certificate and for the suspension or revocation of a

15-14  certificate; and

15-15     (e) Must establish rules of practice and procedure for conducting

15-16  disciplinary hearings.

15-17  The Real Estate Division of the Department of Business and

15-18  Industry may investigate the property managers to whom certificates

15-19  have been issued to ensure their compliance with the standards of

15-20  practice adopted pursuant to this subsection and collect a fee for the

15-21  issuance of a certificate by the Commission in an amount not to

15-22  exceed the administrative costs of issuing the certificate.

15-23     4.] Commission.

15-24     3.  The provisions of subsection 2 do not apply to:

15-25     (a) [A person who is engaged in property management for a

15-26  common-interest community on October 1, 1999, and is granted an

15-27  exemption from the requirements of subsection 2 by the

15-28  Administrator upon demonstration that he is qualified and

15-29  competent to engage in property management for a common-interest

15-30  community.

15-31     (b)] A financial institution[.

15-32     (c)] engaging in an activity permitted by law.

15-33     (b) An attorney licensed to practice in this state[.

15-34     (d)] acting in that capacity.

15-35     (c) A trustee[.

15-36     (e) An employee of a corporation who manages only the

15-37  property of the corporation.

15-38     (f)] with respect to the property of the trust.

15-39     (d) A declarant[.

15-40     (g)] or an affiliate of a declarant, and employees thereof,

15-41  engaged in the management of a common-interest community

15-42  during the period of the control of the declarant of that common-

15-43  interest community.

15-44     (e) A receiver[.

16-1      5.  As used in this section, “property management” means the

16-2  physical, administrative or financial maintenance and management

16-3  of real property, or the supervision of those activities for a fee,

16-4  commission or other compensation or valuable consideration.] with

16-5  respect to property subject to the receivership.

16-6      (f) An officer or a member of the executive board of a

16-7  common-interest community acting within the scope of the duties

16-8  thereof.

16-9      Sec. 50.  NRS 116.311391 is hereby amended to read as

16-10  follows:

16-11     116.311391  The expiration or revocation of a certificate [for

16-12  the management of a common-interest community] by operation of

16-13  law or by order or decision of the Real Estate Commission , the

16-14  Commission for Common-Interest Communities or a court of

16-15  competent jurisdiction, or the voluntary surrender of such a

16-16  certificate by the holder of the certificate , does not:

16-17     1.  Prohibit the [Real Estate Division of the Department of

16-18  Business and Industry or] Division, the Real Estate Commission or

16-19  the Commission for Common-Interest Communities from initiating

16-20  or continuing an investigation of, or action or disciplinary

16-21  proceeding against, the holder of the certificate as authorized

16-22  pursuant to the provisions of this chapter or the regulations adopted

16-23  pursuant thereto; or

16-24     2.  Prevent the imposition or collection of any fine or penalty

16-25  authorized pursuant to the provisions of this chapter or the

16-26  regulations adopted pursuant thereto against the holder of the

16-27  certificate.

16-28     Sec. 51.  NRS 116.3115 is hereby amended to read as follows:

16-29     116.3115  1.  Until the association makes an assessment for

16-30  common expenses, the declarant shall pay all common expenses.

16-31  After an assessment has been made by the association, assessments

16-32  must be made at least annually, based on a budget adopted at least

16-33  annually by the association in accordance with the requirements set

16-34  forth in NRS 116.31151. Unless the declaration imposes more

16-35  stringent standards, the budget must include a budget for the daily

16-36  operation of the association and the money for the reserve required

16-37  by paragraph (b) of subsection 2.

16-38     2.  Except for assessments under subsections 4 to 7, inclusive:

16-39     (a) All common expenses, including a reserve, must be assessed

16-40  against all the units in accordance with the allocations set forth in

16-41  the declaration pursuant to subsections 1 and 2 of NRS 116.2107.

16-42     (b) The association shall establish an adequate reserve, funded

16-43  on a reasonable basis, for the repair, replacement and restoration of

16-44  the major components of the common elements. The reserve may be

16-45  used only for those purposes, including, without limitation,

17-1  repairing, replacing and restoring roofs, roads and sidewalks, and

17-2  must not be used for daily maintenance.

17-3      3.  Any past due assessment for common expenses or

17-4  installment thereof [bears] :

17-5      (a) Bears interest at the rate established by the association not

17-6  exceeding 18 percent per year.

17-7      (b) May include any charge for late payment of an assessment

17-8  at a rate established by the association, not to exceed 5 percent of

17-9  the total outstanding balance.

17-10     (c) May include any cost of collecting the past due assessment

17-11  at a rate established by the association:

17-12         (1) Not to exceed $20, if the amount of the outstanding

17-13  balance is less than $200.

17-14         (2) Not to exceed $50, if the amount of the outstanding

17-15  balance is $200 or greater, but is less than $500.

17-16         (3) Not to exceed $100, if the amount of the outstanding

17-17  balance is $500 or greater, but is less than $1,000.

17-18         (4) Not to exceed $250, if the outstanding balance is $1,000

17-19  or greater, but is less than $5,000.

17-20         (5) Not to exceed $500, if the outstanding balance is $5,000

17-21  or greater.

17-22     4.  To the extent required by the declaration:

17-23     (a) Any common expense associated with the maintenance,

17-24  repair, restoration or replacement of a limited common element

17-25  must be assessed against the units to which that limited common

17-26  element is assigned, equally[,] or in any other proportion the

17-27  declaration provides;

17-28     (b) Any common expense or portion thereof benefiting fewer

17-29  than all of the units must be assessed exclusively against the units

17-30  benefited; and

17-31     (c) The costs of insurance must be assessed in proportion to risk

17-32  and the costs of utilities must be assessed in proportion to usage.

17-33     5.  Assessments to pay a judgment against the association may

17-34  be made only against the units in the common‑interest community at

17-35  the time the judgment was entered, in proportion to their liabilities

17-36  for common expenses.

17-37     6.  If any common expense is caused by the misconduct of any

17-38  unit’s owner, the association may assess that expense exclusively

17-39  against his unit.

17-40     7.  The association of a common‑interest community created

17-41  before January 1, 1992, is not required to make an assessment

17-42  against a vacant lot located within the community that is owned by

17-43  the declarant.

17-44     8.  If liabilities for common expenses are reallocated,

17-45  assessments for common expenses and any installment thereof not

18-1  yet due must be recalculated in accordance with the reallocated

18-2  liabilities.

18-3      9.  The association shall provide written notice to the owner of

18-4  each unit of a meeting at which an assessment for a capital

18-5  improvement or the commencement of a civil action is to be

18-6  considered or action is to be taken on such an assessment at least 21

18-7  calendar days before the meeting. Except as otherwise provided in

18-8  this subsection, the association may commence a civil action only

18-9  upon a vote or written agreement of the owners of units to which at

18-10  least a majority of the votes of the members of the association are

18-11  allocated. The provisions of this subsection do not apply to a civil

18-12  action that is commenced:

18-13     (a) To enforce the payment of an assessment;

18-14     (b) To enforce the declaration, bylaws or rules of the

18-15  association;

18-16     (c) To proceed with a counterclaim; or

18-17     (d) To protect the health, safety and welfare of the members of

18-18  the association. If a civil action is commenced pursuant to this

18-19  paragraph without the required vote or agreement, the action must

18-20  be ratified within 90 days after the commencement of the action by

18-21  a vote or written agreement of the owners of the units to which at

18-22  least a majority of votes of the members of the association are

18-23  allocated. If the association, after making a good faith effort, cannot

18-24  obtain the required vote or agreement to commence or ratify such a

18-25  civil action, the association may thereafter seek to dismiss the action

18-26  without prejudice for that reason only if a vote or written agreement

18-27  of the owners of the units to which at least a majority of votes of the

18-28  members of the association are allocated was obtained at the time

18-29  the approval to commence or ratify the action was sought.

18-30     10.  At least 10 days before an association commences or seeks

18-31  to ratify the commencement of a civil action, the association shall

18-32  provide a written statement to all units’ owners that includes:

18-33     (a) A reasonable estimate of the costs of the civil action,

18-34  including reasonable attorney’s fees;

18-35     (b) An explanation of the potential benefits of the civil action

18-36  and the potential adverse consequences if the association does not

18-37  commence the action or if the outcome of the action is not favorable

18-38  to the association; and

18-39     (c) All disclosures that are required to be made upon the sale of

18-40  the property.

18-41     11.  No person other than a unit’s owner may request the

18-42  dismissal of a civil action commenced by the association on the

18-43  ground that the association failed to comply with any provision of

18-44  this section.

18-45     12.  As used in this section:

19-1      (a) “Costs of collecting” includes, but is not limited to, any

19-2  collection fee, filing fee, recording fee, referral fee, fee for postage

19-3  or delivery, and any other fee that an association, a collection

19-4  agency, a community manager and any other person or entity

19-5  engaged to collect a past due assessment may charge for the

19-6  collection of a past due assessment. The term does not include any

19-7  cost incurred by an association during a civil action to enforce the

19-8  payment of a past due assessment.

19-9      (b) “Outstanding balance” means the amount due to the

19-10  association before any interest, late charges or costs of collecting

19-11  the past due assessment are added.

19-12     Sec. 52.  NRS 116.31152 is hereby amended to read as

19-13  follows:

19-14     116.31152  1.  The executive board of an association shall:

19-15     (a) Cause to be conducted , at least once every 5 years, a study

19-16  of the reserves required to repair, replace and restore the major

19-17  components of the common elements;

19-18     (b) Review the results of that study at least annually to

19-19  determine if those reserves are sufficient; and

19-20     (c) Make any adjustments it deems necessary to maintain the

19-21  required reserves.

19-22     2.  The study required by subsection 1 must be conducted by a

19-23  person qualified by training and experience to conduct such a study,

19-24  including a member of the executive board, a unit’s owner or the

19-25  [property] community manager of the association who is so

19-26  qualified. The study must include, without limitation:

19-27     (a) A summary of an inspection of the major components of the

19-28  common elements the association is obligated to repair, replace or

19-29  restore;

19-30     (b) An identification of the major components of the common

19-31  elements that the association is obligated to repair, replace or restore

19-32  which have a remaining useful life of less than 30 years;

19-33     (c) An estimate of the remaining useful life of each major

19-34  component identified pursuant to paragraph (b);

19-35     (d) An estimate of the cost of repair, replacement or restoration

19-36  of each major component identified pursuant to paragraph (b) during

19-37  and at the end of its useful life; and

19-38     (e) An estimate of the total annual assessment that may be

19-39  required to cover the cost of repairing, replacement or restoration of

19-40  the major components identified pursuant to paragraph (b), after

19-41  subtracting the reserves of the association as of the date of the study.

19-42     3.  The results of the study must be submitted to the

19-43  Commission within 45 days after the adoption of those results by

19-44  the executive board of the association.

20-1      4.  The [Administrator] Commission shall adopt by regulation

20-2  the qualifications required for conducting a study required by

20-3  subsection 1.

20-4      Sec. 53.  NRS 116.31155 is hereby amended to read as

20-5  follows:

20-6      116.31155  1.  An association shall:

20-7      (a) If the association is required to pay the fee imposed by NRS

20-8  78.150 or 82.193, pay to the Administrator a fee established by

20-9  regulation of the Administrator for every unit in the association used

20-10  for residential use.

20-11     (b) If the association is organized as a trust or partnership, pay

20-12  to the Administrator a fee established by regulation of the

20-13  Administrator for each unit in the association.

20-14     2.  The fees required to be paid pursuant to this section must be:

20-15     (a) Paid at such times as are established by the Administrator.

20-16     (b) Deposited with the State Treasurer for credit to the Account

20-17  for [the Ombudsman for Owners in] Common-Interest Communities

20-18  created [pursuant to] by NRS 116.1117.

20-19     (c) Established on the basis of the actual cost of administering

20-20  the Office of the Ombudsman [for Owners in Common-Interest

20-21  Communities] and the Commission and not on a basis which

20-22  includes any subsidy for the office. In no event may the fees

20-23  required to be paid pursuant to this section exceed $3 per unit.

20-24     3.  A unit’s owner may not be required to pay any portion of the

20-25  fees required to be paid pursuant to this section to a master

20-26  association and to an association organized pursuant to NRS

20-27  116.3101.

20-28     4.  Upon the payment of the fees required by this section, the

20-29  Administrator shall provide to the association evidence that it paid

20-30  the fees in compliance with this section.

20-31     Sec. 54.  NRS 116.31158 is hereby amended to read as

20-32  follows:

20-33     116.31158  1.  Each association shall, at the time it pays the

20-34  fee required by NRS 116.31155, register with the Ombudsman [for

20-35  Owners in Common-Interest Communities] on a form prescribed by

20-36  the Ombudsman.

20-37     2.  The form for registration must include, without limitation,

20-38  the information required to be maintained pursuant to paragraph (d)

20-39  of subsection 4 of NRS 116.1116.

20-40     Sec. 55.  NRS 116.31175 is hereby amended to read as

20-41  follows:

20-42     116.31175  1.  Except as otherwise provided in this

20-43  subsection, the executive board of an association shall, upon the

20-44  written request of a unit’s owner, make available the books, records

20-45  and other papers of the association for review during the regular

21-1  working hours of the association. The provisions of this subsection

21-2  do not apply to:

21-3      (a) The personnel records of the employees of the association;

21-4  and

21-5      (b) The records of the association relating to another unit’s

21-6  owner.

21-7      2.  If the executive board refuses to allow a unit’s owner to

21-8  review the books, records or other papers of the association, the

21-9  Ombudsman [for Owners in Common-Interest Communities] may:

21-10     (a) On behalf of the unit’s owner and upon written request,

21-11  review the books, records or other papers of the association during

21-12  the regular working hours of the association; and

21-13     (b) If he is denied access to the books, records or other papers,

21-14  request the Real Estate Commission to issue a subpoena for their

21-15  production.

21-16     Sec. 56.  NRS 116.31177 is hereby amended to read as

21-17  follows:

21-18     116.31177  1.  The executive board of an association shall

21-19  maintain and make available for review at the business office of the

21-20  association or other suitable location:

21-21     (a) The financial statement of the association;

21-22     (b) The budgets of the association required to be prepared

21-23  pursuant to NRS 116.31151; and

21-24     (c) The study of the reserves of the association required to be

21-25  conducted pursuant to NRS 116.31152.

21-26     2.  The executive board shall provide a copy of any of the

21-27  records required to be maintained pursuant to subsection 1 to a

21-28  unit’s owner or the Ombudsman [for Owners in Common‑Interest

21-29  Communities] within 14 days after receiving a written request

21-30  therefor. The executive board may charge a fee to cover the actual

21-31  costs of preparing a copy, but not to exceed 25 cents per page.

21-32     Sec. 57.  NRS 116.41095 is hereby amended to read as

21-33  follows:

21-34     116.41095  The information statement required by NRS

21-35  116.4103 and 116.4109 must be in substantially the following form:

 

21-36  BEFORE YOU PURCHASE PROPERTY IN A

21-37  COMMON-INTEREST COMMUNITY

21-38  DID YOU KNOW . . .

21-39     1.  YOU ARE AGREEING TO RESTRICTIONS ON HOW

21-40  YOU CAN USE YOUR PROPERTY?

21-41  These restrictions are contained in a document known as the

21-42  Declaration of Covenants, Conditions and Restrictions (C, C & R’s)

21-43  that should be provided for your review before making your

21-44  purchase. The C, C & R’s become a part of the title to your

22-1  property. They bind you and every future owner of the property

22-2  whether or not you have read them or had them explained to you.

22-3  The C, C & R’s, together with other “governing documents” (such

22-4  as association bylaws and rules and regulations), are intended to

22-5  preserve the character and value of properties in the community, but

22-6  may also restrict what you can do to improve or change your

22-7  property and limit how you use and enjoy your property. By

22-8  purchasing a property encumbered by C, C & R’s, you are agreeing

22-9  to limitations that could affect your lifestyle and freedom of choice.

22-10  You should review the C, C & R’s and other governing documents

22-11  before purchasing to make sure that these limitations and controls

22-12  are acceptable to you.

22-13     2.  YOU WILL HAVE TO PAY OWNERS’ ASSESSMENTS

22-14  FOR AS LONG AS YOU OWN YOUR PROPERTY?

22-15  As an owner in a common-interest community, you are responsible

22-16  for paying your share of expenses relating to the common elements,

22-17  such as landscaping, shared amenities and the operation of any

22-18  homeowner’s association. The obligation to pay these assessments

22-19  binds you and every future owner of the property. Owners’ fees are

22-20  usually assessed by the homeowner’s association and due monthly.

22-21  You have to pay dues whether or not you agree with the way the

22-22  association is managing the property or spending the assessments.

22-23  The executive board of the association may have the power to

22-24  change and increase the amount of the assessment and to levy

22-25  special assessments against your property to meet extraordinary

22-26  expenses. In some communities, major components of the

22-27  community such as roofs and private roads must be maintained and

22-28  replaced by the association. If the association is not well managed or

22-29  fails to maintain adequate reserves to repair, replace and restore

22-30  common elements, you may be required to pay large, special

22-31  assessments to accomplish these tasks.

22-32     3.  IF YOU FAIL TO PAY OWNERS’ ASSESSMENTS, YOU

22-33  COULD LOSE YOUR HOME?

22-34  If you do not pay these assessments when due, the association

22-35  usually has the power to collect them by selling your property in a

22-36  nonjudicial foreclosure sale. If fees become delinquent, you may

22-37  also be required to pay penalties and the association’s costs and

22-38  attorney’s fees to become current. If you dispute the obligation or its

22-39  amount, your only remedy to avoid the loss of your home may be to

22-40  file a lawsuit and ask a court to intervene in the dispute.

22-41     4.  YOU MAY BECOME A MEMBER OF A

22-42  HOMEOWNER’S ASSOCIATION THAT HAS THE POWER TO

22-43  AFFECT HOW YOU USE AND ENJOY YOUR PROPERTY?

22-44  Many common-interest communities have a homeowner’s

22-45  association. In a new development, the association will usually be

23-1  controlled by the developer until a certain number of units have

23-2  been sold. After the period of developer control, the association may

23-3  be controlled by property owners like yourself who are elected by

23-4  homeowners to sit on an executive board and other boards and

23-5  committees formed by the association. The association, and its

23-6  executive board, are responsible for assessing homeowners for the

23-7  cost of operating the association and the common or shared

23-8  elements of the community and for the day to day operation and

23-9  management of the community. Because homeowners sitting on the

23-10  executive board and other boards and committees of the association

23-11  may not have the experience or professional background required to

23-12  understand and carry out the responsibilities of the association

23-13  properly, the association may hire professional managers to carry

23-14  out these responsibilities.

23-15  Homeowner’s associations operate on democratic principles. Some

23-16  decisions require all homeowners to vote, some decisions are made

23-17  by the executive board or other boards or committees established by

23-18  the association or governing documents. Although the actions of the

23-19  association and its executive board are governed by state laws, the

23-20  C, C & R’s and other documents that govern the common-interest

23-21  community, decisions made by these persons will affect your use

23-22  and enjoyment of your property, your lifestyle and freedom of

23-23  choice, and your cost of living in the community. You may not

23-24  agree with decisions made by the association or its governing bodies

23-25  even though the decisions are ones which the association is

23-26  authorized to make. Decisions may be made by a few persons on the

23-27  executive board or governing bodies that do not necessarily reflect

23-28  the view of the majority of homeowners in the community. If you do

23-29  not agree with decisions made by the association, its executive

23-30  board or other governing bodies, your remedy is typically to attempt

23-31  to use the democratic processes of the association to seek the

23-32  election of members of the executive board or other governing

23-33  bodies that are more responsive to your needs. If persons controlling

23-34  the association or its management are not complying with state laws

23-35  or the governing documents, your remedy is typically to seek to

23-36  mediate or arbitrate the dispute and, if mediation or arbitration is

23-37  unsuccessful, file a lawsuit and ask a court to resolve the dispute. In

23-38  addition to your personal cost in mediation or arbitration, or to

23-39  prosecute a lawsuit, you may be responsible for paying your share

23-40  of the association’s cost in defending against your claim. There is no

23-41  government agency in this state that investigates or intervenes to

23-42  resolve disputes in homeowner’s associations.

23-43     5.  YOU ARE REQUIRED TO PROVIDE PROSPECTIVE

23-44  BUYERS OF YOUR PROPERTY WITH INFORMATION

24-1  ABOUT LIVING IN YOUR COMMON-INTEREST

24-2  COMMUNITY?

24-3  The law requires you to provide to a prospective purchaser of your

24-4  property, before you enter into a purchase agreement, a copy of the

24-5  community’s governing documents, including the C, C & R’s,

24-6  association bylaws, and rules and regulations, as well as a copy of

24-7  this document. You are also required to provide a copy of the

24-8  association’s current financial statement, operating budget and

24-9  information regarding the amount of the monthly assessment for

24-10  common expenses, including the amount set aside as reserves for the

24-11  repair, replacement and restoration of common elements. You are

24-12  also required to inform prospective purchasers of any outstanding

24-13  judgments or lawsuits pending against the association of which you

24-14  are aware. You are also required to provide a copy of the minutes

24-15  from the most recent meeting of the homeowner’s association or its

24-16  executive board. For more information regarding these

24-17  requirements, see Nevada Revised Statutes 116.4103[.] and

24-18  116.4109.

24-19     6.  YOU HAVE CERTAIN RIGHTS REGARDING

24-20  OWNERSHIP IN A COMMON-INTEREST COMMUNITY THAT

24-21  ARE GUARANTEED YOU BY THE STATE?

24-22  Pursuant to provisions of chapter 116 of Nevada Revised Statutes,

24-23  you have the right:

24-24     (a) To be notified of all meetings of the association and its

24-25  executive board, except in cases of emergency.

24-26     (b) To attend and speak at all meetings of the association and its

24-27  executive board, except in some cases where the executive board is

24-28  authorized to meet in closed, executive session.

24-29     (c) To request a special meeting of the association upon petition

24-30  of at least 10 percent of the homeowners.

24-31     (d) To inspect, examine, photocopy and audit financial and other

24-32  records of the association.

24-33     (e) To be notified of all changes in the community’s rules and

24-34  regulations and other actions by the association or board that affect

24-35  you.

24-36     7.  QUESTIONS?

24-37  Although they may be voluminous, you should take the time to read

24-38  and understand the documents that will control your ownership of a

24-39  property in a common-interest community. You may wish to ask

24-40  your real estate professional, lawyer or other person with experience

24-41  to explain anything you do not understand. You may also request

24-42  assistance from the Ombudsman for Owners in Common-Interest

24-43  Communities, Nevada Real Estate Division, at (telephone number)

24-44  [.] , or the Commission for Common-Interest Communities, at

24-45  (telephone number).

25-1  Buyer or prospective buyer’s initials:_____

25-2  Date:_____

25-3      Sec. 58.  NRS 38.330 is hereby amended to read as follows:

25-4      38.330  1.  If all parties named in a written claim filed

25-5  pursuant to NRS 38.320 agree to have the claim submitted for

25-6  mediation, the parties shall reduce the agreement to writing and

25-7  shall select a mediator from the list of mediators maintained by the

25-8  Division pursuant to NRS 38.340. Any mediator selected must be

25-9  available within the geographic area. If the parties fail to agree upon

25-10  a mediator, the Division shall appoint a mediator from the list of

25-11  mediators maintained by the Division. Any mediator appointed must

25-12  be available within the geographic area. Unless otherwise provided

25-13  by an agreement of the parties, mediation must be completed within

25-14  60 days after the parties agree to mediation. Any agreement

25-15  obtained through mediation conducted pursuant to this section must,

25-16  within 20 days after the conclusion of mediation, be reduced to

25-17  writing by the mediator and a copy thereof provided to each party.

25-18  The agreement may be enforced as any other written agreement.

25-19  Except as otherwise provided in this section, the parties are

25-20  responsible for all costs of mediation conducted pursuant to this

25-21  section.

25-22     2.  If all the parties named in the claim do not agree to

25-23  mediation, the parties shall select an arbitrator from the list of

25-24  arbitrators maintained by the Division pursuant to NRS 38.340. Any

25-25  arbitrator selected must be available within the geographic area. If

25-26  the parties fail to agree upon an arbitrator, the Division shall appoint

25-27  an arbitrator from the list maintained by the Division. Any arbitrator

25-28  appointed must be available within the geographic area. Upon

25-29  appointing an arbitrator, the Division shall provide the name of the

25-30  arbitrator to each party.

25-31     3.  The Division may provide for the payment of the fees for a

25-32  mediator or an arbitrator selected or appointed pursuant to this

25-33  section from the Account for [the Ombudsman for Owners in]

25-34  Common-Interest Communities created [pursuant to] by NRS

25-35  116.1117, to the extent that:

25-36     (a) The Commission for Common-Interest Communities

25-37  approves the payment; and

25-38     (b) There is money [is] available in the account for this purpose.

25-39     4.  Except as otherwise provided in this section and except

25-40  where inconsistent with the provisions of NRS 38.300 to 38.360,

25-41  inclusive, the arbitration of a claim pursuant to this section must be

25-42  conducted in accordance with the provisions of NRS 38.231,

25-43  38.232, 38.233, 38.236 to 38.239, inclusive, 38.242 and 38.243. At

25-44  any time during the arbitration of a claim relating to the

25-45  interpretation, application or enforcement of any covenants,

26-1  conditions or restrictions applicable to residential property or any

26-2  bylaws, rules or regulations adopted by an association, the arbitrator

26-3  may issue an order prohibiting the action upon which the claim is

26-4  based. An award must be made within 30 days after the conclusion

26-5  of arbitration, unless a shorter period is agreed upon by the parties to

26-6  the arbitration.

26-7      5.  If all the parties have agreed to nonbinding arbitration, any

26-8  party to the arbitration may, within 30 days after a decision and

26-9  award have been served upon the parties, commence a civil action in

26-10  the proper court concerning the claim which was submitted for

26-11  arbitration. Any complaint filed in such an action must contain a

26-12  sworn statement indicating that the issues addressed in the

26-13  complaint have been arbitrated pursuant to the provisions of NRS

26-14  38.300 to 38.360, inclusive. If such an action is not commenced

26-15  within that period, any party to the arbitration may, within 1 year

26-16  after the service of the award, apply to the proper court for a

26-17  confirmation of the award pursuant to NRS 38.239.

26-18     6.  If all the parties agree in writing to binding arbitration, the

26-19  arbitration must be conducted in accordance with the provisions of

26-20  this chapter . [38 of NRS.] An award procured pursuant to such

26-21  arbitration may be vacated and a rehearing granted upon application

26-22  of a party pursuant to the provisions of NRS 38.241.

26-23     7.  If, after the conclusion of arbitration, a party:

26-24     (a) Applies to have an award vacated and a rehearing granted

26-25  pursuant to NRS 38.241; or

26-26     (b) Commences a civil action based upon any claim which was

26-27  the subject of arbitration,

26-28  the party shall, if he fails to obtain a more favorable award or

26-29  judgment than that which was obtained in the initial arbitration, pay

26-30  all costs and reasonable attorney’s fees incurred by the opposing

26-31  party after the application for a rehearing was made or after the

26-32  complaint in the civil action was filed.

26-33     8.  Upon request by a party, the Division shall provide a

26-34  statement to the party indicating the amount of the fees for a

26-35  mediator or an arbitrator selected or appointed pursuant to this

26-36  section.

26-37     9.  As used in this section, “geographic area” means an area

26-38  within 150 miles from any residential property or association which

26-39  is the subject of a written claim submitted pursuant to NRS 38.320.

26-40     Sec. 59.  As soon as practicable after October 1, 2003, the

26-41  Governor shall appoint to the Commission for Common-Interest

26-42  Communities:

26-43     1.  One member whose term expires on October 1, 2004.

26-44     2.  Two members whose terms expire on October 1, 2005.

26-45     3.  Two members whose terms expire on October 1, 2006.

27-1      Sec. 60.  1.  Any administrative regulations adopted by an

27-2  officer or an agency whose name has been changed or whose

27-3  responsibilities have been transferred pursuant to the provisions of

27-4  this act to another officer or agency remain in force until amended

27-5  by the officer or agency to which the responsibility for the adoption

27-6  of the regulations has been transferred.

27-7      2.  Any contracts or other agreements entered into by an officer

27-8  or agency whose name has been changed or whose responsibilities

27-9  have been transferred pursuant to the provisions of this act to

27-10  another officer or agency are binding upon the officer or agency to

27-11  which the responsibility for the administration of the provisions of

27-12  the contract or other agreement has been transferred. Such contracts

27-13  and other agreements may be enforced by the officer or agency to

27-14  which the responsibility for the enforcement of the provisions of the

27-15  contract or other agreement has been transferred.

27-16     3.  Any action taken by an officer or agency whose name has

27-17  been changed or whose responsibilities have been transferred

27-18  pursuant to the provisions of this act to another officer or agency

27-19  remains in effect as if taken by the officer or agency to which the

27-20  responsibility for the enforcement of such actions has been

27-21  transferred.

27-22     Sec. 61.  After October 1, 2003, the State Treasurer shall treat

27-23  any outstanding claims against the Account for the Ombudsman for

27-24  Owners in Common-Interest Communities as claims against the

27-25  Account for Common-Interest Communities.

27-26     Sec. 62.  Notwithstanding the provisions of section 49 of this

27-27  act, a person issued a certificate for the management of common-

27-28  interest communities by the Real Estate Commission pursuant to the

27-29  provisions of NRS 116.31139 as they existed before October 1,

27-30  2003, is not required to be certified pursuant to the provisions of this

27-31  act to be a community manager before the certificate would have

27-32  expired under the provisions of NRS 116.31139 as they existed

27-33  before October 1, 2003.

27-34     Sec. 63.  1.  The amendatory provisions of section 51 of this

27-35  act apply to any contract executed before, on or after October 1,

27-36  2003.

27-37     2.  Any provision contained in a contract in effect on October 1,

27-38  2003, that does not conform to the amendatory provisions of section

27-39  51 of this act shall be deemed void as against public policy.

27-40     Sec. 64.  On or before November 1, 2006, the Commission for

27-41  Common-Interest Communities shall submit to the Director of the

27-42  Legislative Counsel Bureau for transmittal to the 74th Session of the

27-43  Nevada Legislature a report containing:

28-1      1.  The information that the Commission for Common-Interest

28-2  Communities is required to gather pursuant to section 17 of this act;

28-3  and

28-4      2.  Any recommendations for legislation adopted by the

28-5  Commission for Common-Interest Communities.

28-6      Sec. 65.  1.  Except as otherwise provided in subsection 2, this

28-7  act becomes effective on October 1, 2003, and expires by limitation

28-8  on July 1, 2007.

28-9      2.  Sections 24, 25 and 26 of this act expire by limitation on

28-10  July 1, 2007, or on the date on which the provisions of 42 U.S.C. §

28-11  666 requiring each state to establish procedures under which the

28-12  state has authority to withhold or suspend, or to restrict the use of

28-13  professional, occupational and recreational licenses of persons who:

28-14     (a) Have failed to comply with a subpoena or warrant relating to

28-15  a proceeding to determine the paternity of a child or to establish or

28-16  enforce an obligation for the support of a child; or

28-17     (b) Are in arrears in the payment for the support of one or more

28-18  children,

28-19  are repealed by the Congress of the United States, whichever is

28-20  earlier.

 

28-21  H