Assembly Bill 324

Offered by Assembymember Orentlicher (D – Clark), seeks to affect the insurance some associations are required to carry.

Under existing law, to the extent reasonably available, associations that share vertical or horizontal boundaries are required to obtain insurance covering both the common area and the Units. AB 324 seeks to slightly change this requirement.

If passed, AB 324 would not require associations that share vertical walls only (i.e., townhomes), to insure the units. Associations whose units share horizontal boundaries (i.e., condominiums), would still be required to cover the units.

While this legislation may be well intended on minimizing the insurance expense communities are required to incur, it presumes water and fire will not travel between walls, but only floors and ceilings. The legislation further does not address situations such as where a townhome owner fails to obtain insurance, yet suffers a catastrophic loss. In such instances, it can leave a blight on the community for years.

Senate Bill 338

Senate Bill 338, introduced by Senator Buck (R – Clark), proposes several significant changes to HOA governance, including new financial audit requirements, background checks for board candidates, mandatory board training, and more frequent reserve studies.

Under existing law, associations are required to have an annual review or audit of its financial statements. If passed, SB 338 would allow the Real Estate Division to investigate and audit all financial accounts related to an association if the Division has reasonable cause to believe the association’s accounts or records have not been maintained and that an investigation and audit is reasonably necessary to administer Nevada law.

SB 338 further seeks to impose a requirement that candidates for an association’s executive board undergo background investigations conducted by the Division. A candidate would be required to submit a copy of the background investigation to the association for distribution to the unit owners during the election process. Though perhaps well intended, these requirements seem likely to prevent many who might be willing to serve their community, to rethink that desire as it may be viewed as an invasion of their privacy.

And, though equally well intentioned, this legislation further seeks to require that executive board members undertake training within six months of being elected or appointed. Once again, imposing further burdens on volunteer board members is likely to have a chilling effect on the desire of individuals to serve.

Turning towards an association’s reserve funding, current law requires that an association establish adequate reserves and requires that an updated reserve study be performed every five years. If passed, SB339 would require an updated reserve study to be performed every year. This is likely to create an added financial burden on associations, leading to increases in assessments.

Currently before any claim can be brought against an association, it must be submitted to mediation or arbitration in accordance with NRS 38.310. SB 339 however seeks to alter that requirement. If passed, it would exempt actions brought seeking damages for an alleged failure to comply with any provisions of the community’s governing documents. However, such claims must be brought in justice court.

AB396

Proposed by Assemblymember Backus (D – Clark), seeks several changes that would require counties with populations over 100,000 to adopt regulations allowing for the construction of accessory buildings.

As it pertains to community associations, the legislation seeks to clarify that if the boundaries of any unit are to be altered, in addition to unanimous consent of the affected unit’s owners, consent from a majority of units owned by individuals other than the declarant must be obtained.

The legislation would further allow an association to amend its CC&Rs to adopt restrictions on leasing so long as the restrictions are designed to meet the underwriting requirements of institutional lenders or insurance companies. Furthermore, if an association’s Declaration prohibits or restricts leasing, the association may adopt rules and regulations to prohibit or restrict leasing to the extent they are reasonably related to meet the underwriting requirements of institutional lenders or insurance companies. Otherwise, AB396 seeks to eliminate other prohibitions on an association’s ability to restrict leasing within a common-interest community.

AB396 further seeks to clarify the requirements for terminating a common-interest community to provide that a vote from at least 80 percent of the units not owned by the declarant would be required. A greater requirement may be imposed by an association’s Declaration.

Isaacson Law has long recommended that copies of an association’s insurance policies be included with a community’s resale package. If adopted, AB 396 would codify this requirement.

Lastly, should the Commission for Common-Interest Communities find violations of the statutes or duties imposed upon Board members or Managers, the amounts of the fines that may be levied would be increased from $1,000 per violation to $5,000.

SB222

Introduced by Senator Buck (R – Clark), seeks to allow video recording of Board members by any Unit Owner. Current law only allows for audio recording. Given many meetings are conducted via online platforms that record video, this revision seems logical.

SB221

Has been proposed by Senators Buck (R – Clark) and Stone (R – Clark). Under existing law, complaints filed with the Real Estate Division are maintained as confidential. If passed, such complaints and any documents pertaining thereto would be deemed public records.

Assembly Bill 129

Changes to HOA Project Bidding Requirements
Addressed in our last update, AB 129 remains pending. Proposed by Assemblymember Jill Dickman (R – Washoe), AB 129 aims to revise NRS 116.31086 by mandating that associations solicit three bids for projects meeting specific budget thresholds. Currently, HOAs must obtain three bids “whenever reasonably possible.” If passed, the bill would require:
• Mandatory three-bid process, unless delay poses property damage or injury risks.
• Contracts awarded to the lowest responsive bidder, potentially overriding considerations of quality or long-term cost efficiency.

While this bill aims to create transparency, it raises concerns that the lowest bid may not always be the most reliable option. Some contractors submit artificially low bids to secure contracts, leading to cost overruns via change orders, potentially costing HOAs more in the long run.

Senate Bill 121

Multiple Revisions to NRS Chapter 116
Also addressed in our last update, SB121 remains pending. Introduced by Senator Dina Neal (D – Clark), SB 121 proposes several changes to HOA laws, including:
1. Landscaping Deadlines for New Homeowners
• Requires HOA governing documents to allow homeowners 36 months to install backyard landscaping after initial home purchase.
• Permits HOAs to mandate a thin layer of rock in backyards after 18 months of ownership.
This change would impact newly constructed communities and developers enforcing strict landscaping policies. Homeowners should prepare for updated landscaping deadlines if the bill passes.
2. Late Fee and Credit Reporting Restrictions
• Revises NRS 116.310313 to prohibit imposing late fees on past-due obligations until 30 days after the due date.
• Prevents HOAs from reporting past-due obligations to credit agencies within this timeframe.
These changes could offer relief to homeowners struggling with payments but may also affect HOA cash flow. Boards should assess financial reserves to accommodate delayed fee collection.
3. Oil Stain Liability Limitations
• Amends NRS 116.3115 to ensure homeowners are not fined or held responsible for oil stains not located on their driveways.
HOAs will need to adjust enforcement policies, as responsibility for oil stains in common areas will shift away from individual homeowners.
4. Commercial Vehicle Parking Rights
• Updates NRS 116.350 to prevent HOAs from prohibiting commercial vehicles under 10,000 pounds from parking in designated visitor or common-area parking spaces.
• HOAs cannot require owners to cover commercial advertisements unless they contain:
o Sexual imagery
o Content related to controlled substances
• Allows HOAs to mandate the use of magnets to obscure inappropriate advertisements.
This provision seeks to balance commercial vehicle rights with community aesthetics, limiting excessive HOA restrictions.
5. HOA Management Company Termination Notices
• Amends NRS 116A.620 to require HOAs in communities with 100 or more units to:
o Post notices of pending management company termination at least 45 days in advance in a prominent location.
o Send electronic notices to homeowners who have provided an email address.
o Repeat these notices once the termination becomes effective.
HOAs should ensure compliance by setting up notification systems well in advance.

Timeline for Legislative Decisions

These proposed bills must pass through multiple stages before becoming law:
• April 22, 2025 – Deadline for bills to pass out of their first legislative chamber.
• May 17, 2025 – Bills must pass out of the second chamber before presentation to the governor.

There is a very long way to go in this legislative session. We will keep you updated on further developments, but please feel free to call Isaacson Law should you wish to discuss any matter.