Several new laws affect local HOA boards

Editor’s Note: This is the first in a three-part series that covers new laws affecting Southern Nevada homeowners associations.

It’s that time of year again to review the new Nevada Revised Statutes 116 laws that impact our associations. There will be a series of articles over the coming weeks. Many of these new laws will require associations to modify their rules and regulations.

Towing: Effective July

Senate Bill 320 pertains to the subject of the towing of unregistered vehicles. This law pertains to condominiums and townhouses that have a common parking area, regardless of whether there is assigned parking. The association may not tow a vehicle if the vehicle is owned or operated by a resident and where the registration has not expired passed 60 days or more. Please note, that the association may tow the unregistered vehicle if the vehicle is owned or operated by a non-resident upon verification of the non- resident status. For these associations, you may want to initiate a decal system to identify residents’ vehicles.

Stickers that are being applied to vehicles have a 48-hour window before being towed and the stickers must include the date and time after which the vehicle will be towed.

SB320 does not apply to single-family homes or condominiums and townhouses that have garage parking only.

Remember, you can still immediately tow vehicles for such violations as blocking fire hydrants, fire lanes, handicapped parking (the health, safety and welfare violations per NRS 116.3102(s)(1)-(2).

Vehicle owners have the right to sue for any unlawful tows.

Enforcing the parking restrictions on public streets: Effective Oct. 1

This law was way overdue! The new law amends NRS 116.350 (1) to explicitly state that the association has the right to impose fines on homeowners for parking or storing recreational vehicles, watercraft, trailers or commercial vehicles on the public streets within the association.

Vacant board positions and election by acclamation: Effective Oct. 1

NRS 116.3103 saw some changes in the language, but basically, the revised version will apply to all associations. It now states that “notwithstanding any provisions of the governing documents to the contrary” vacancies may be filled by the board until the term expires or until the next election, whichever occurs first. (SB 195).

Finally! SB 195 made a significant change in the process which will save associations money as there will be fewer notices asking for candidate nominations. Here is one of the key points in the law that associations must follow. Prior to the mailing out of the candidate application forms, the board must pass a motion that states that the association will implement the process per NRS 116.31034 (5). This decision must be disclosed in the request for nominations (candidate applications) that is being mailed to all of the homeowners.

The prior law stated that after the first 30-day notice, if the association received candidate applications that were either less than or equal to the number of vacant seats, the association was required to send another 30-day notice before the process could be implemented. Now, associations will only have to send one 30-day notice for candidate applications.

Annual meetings and elections: Effective Oct. 1

NRS 116.3108 was amended to read that ballots for the election of directors are to be opened and counted at the annual meeting. This provision consolidates the membership actions/meetings, which will limit the number of notices, mailings and meetings.

One major change was the notice to homeowners of the board’s executive sessions. The amended law, NRS 116.31083, requires the association to only notice those homeowners who are subject to a scheduled hearing at the executive session. Notices of executive sessions no longer must be mailed to all homeowners. This change allows for flexibility as the board can call for executive sessions when necessary rather than only in conjunction with regularly scheduled board meetings. What is required is that at the next scheduled board meeting, the board shall inform the homeowners that an executive session was held and that this acknowledgment is to be included in the board meeting minutes.

Please note, that the new law does not change which topics can and cannot be discussed at the executive sessions.

Pre-hearing violation notices: Effective Oct. 1

SB 258 amended the violation process and becomes effective as of Oct. 1. If an association sends a pre-hearing violation notice, the notice must include a photograph of the alleged violation to be specified in detail along with citing the provision of the governing documents and including the proposed cure and reasonable time to cure the violation. (Please note, this is the same requirement for sending hearing notices). This does not mandate photographs for courtesy notices or first violation notices, although, this is a good idea and probably will be required in some future legislation.

Directors and officers insurance: Effective Oct. 1

SB 195 amended NRS 116.3113 to require that all associations have directors and officers insurance of a minimum of $1 million, naming the association as the owner and named insured to the extent that the coverage is reasonably available and subject to reasonable deductibles. I would hope that all associations already have this coverage as it protects the individual board of directors who could be sued as a result of decisions made or not made by them as directors of the association board. In addition, the coverage should be extended to the community managers who are acting within the scope of the board’s activities.

As a result of all the continued and outstanding lawsuits by investors and by the banks pertaining to foreclosures, many associations did see some increases in their premiums and did see significant increases in the deductibles from $25,000 per incident to $ 35,000 or even more as they pertain to any foreclosure-type lawsuits. Other than the foreclosure deductibles, most policies included the “normal” deductible for claims from $2,500 to $ 5,000 per incident.

Assessing homeowners for taxes and utilities paid by the association on their behalf: Effective July 1

SB 281 amended NRS 116.3115 (4) (b). This law had always given the association the authority to assess common expenses that benefited fewer than all of the homeowners. For example, if there was a limited RV-designated parking space. Now, this law includes, without limitations, common expenses consisting of the payment of delinquent property taxes or utility charges owed by the homeowner. The association may now exclusively assess those homeowners who were benefited by the payments made by the association.

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