Amendments to Assembly Bill 350 will challenge HOAs

Editor’s Note: This is the second column in a four-part series addressing recent state laws affecting the state’s homeowners associations.


We’ll continue our discussion from last week on the amendments made to Assembly Bill 350.

* One important addition to the law is that now punitive damages may not be recovered against the association or the members of the board for acts or omissions that occur in their capacity as members of the board or as officers of the association (NRS 116.31105. 3 a,b,c).

* Any assessment that is 60 days or more past due will be charged an interest rate that is equal to the prime rate at Nevada’s largest bank, as ascertained by the Commissioner of Financial Institutions on Jan. 1 or July 1. If the case immediately precedes the date, the fee is increased by 2 percent. The rate must be adjusted twice a year.

This presents one major issue as it conflicts with the federal guidelines for Federal Housing Administration, Veterans Affairs and Fannie Mae mortgages.

The Legislature received e-mails on this decision to change the delinquency period from 30 to 60 days and its significant impact on homeowners’ ability to sell or finance their homes. Now that our lawmakers have ignored the federal requirements, it will be interesting to see what kind of collateral damage may occur that will negatively impact homeowners who are trying to sell or refinance their homes.

Other amendments to AB 350 are:

* New laws extent authority of community managers to cosign checks on operating accounts.

* Management agreements may provide for mandatory binding arbitrations.

* New law allows for month-to-month management, but no automatic renewal provisions.

* The management company would take over no later than 10 days after the effective date of the agreement. There should be evidence of insurance to be sent to the board, including the name and address of the insurance company, the amount of the coverage and any deductible.

* There should be copies of management agreements to be sent to the board and within 30 days after elections to any new board members.

* Any changes to management agreements must be initialed by the parties, or in writing and signed by the parties.

* At termination, community managers will return records within 30 days to the new management companies or community managers, regardless of whether there are any unpaid fees or charges to the HOA.

* Management contracts can be terminated without penalty upon 30 days notice following a violation by community managers of any provision of NRS 116.

* The new law expands the standards of practice for community managers. Many of which are found in NAC 116.

It is unfortunate, but a fact that so many of the bills that were passed during the last legislative session were knee-jerk reactions to abnormal incidents. Like pizza-man delivery case, in which a homeowner was fined for a speeding fast-food delivery vehicle. Or, the FBI investigation of a HOA management company and a few of its board members and a construction company (a few bad apples).

As you will see in the upcoming articles, many laws were passed without proper investigation and an ignorance of federal regulations.

The Nevada Real Estate Division and the CICC will have a field day trying to iron out the difference in the laws where various bills have made changes on the same existing laws, but with different requirements.

Next week we will continue to discuss new laws and how they will affect our communities’ ability to invest funds; develop polices; and a last-minute change that could make a splash in how pools are licensed by the Southern Nevada Health District.

If you would like more information and a my full opinion on these bills, e-mail me at

NOTE: The Nevada Real Estate Division will hold Ombudsman Legislative Summary events to help communities understand the changes in HOA laws. Upcoming sessions are for Aug. 28, Bradley Building, 2501 E. Sahara Ave.; and Sept. 16, Centennial YMCA, 6601 N. Buffalo Drive. Call 486-4480 to reserve a seat.

Barbara Holland, certified property manager, broker and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to Association Q.&A., P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759, or she can be reached by e-mail at

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