Columnist discusses new law affecting HOAs

EDITOR'S NOTE: Barbara Holland is taking another break in the Q. & A. format of this column to discuss recent new laws affecting Southern Nevada homeowners associations.

This legislative year was a major one for homeowner associations, as many more major laws were passed than in previous years. In this column, we have thoroughly discussed Assembly Bill 350. In addition, the Legislature also passed two other major pieces of legislation, Senate Bill 182 and 183, in the last session. Today, we will look at the most important sections of SB 182. Next week we will discuss SB 183.

* SB 182 creates a D felony for any person who knowingly, willfully, and with the fraudulent intent, alters the true outcome of a board election. This includes altering votes on ballots, rejecting, failing to count, destroying or defacing or invalidating a valid ballot or submitting a counterfeit ballot.

In addition, if a community manager or board member asks or receives, directly or indirectly any compensation, gratuity or reward or any promise of the same for the purpose of influencing his or her vote, opinion or action, the manager or director would be guilty of a D felony. This provision excludes an employee or affiliate of a developer who is a director. It also excludes the community manager when receiving compensation for work by the manager per state laws.

* SB 182 modifies NRS 116.1206 and in essence states that state law will now supersede associations' governing documents regardless of whether the provision became effective before the enactment of NRS 116.

* It is now against the law for an association to charge a fee to a person entering into an association to provide a service to a unit owner or to his or her tenant. Sound strange? Well, an association was charging a fee when contractors came into the community because of the damages their trucks were causing. This law was passed because of this association.

* Contracts for the furnishing of goods or services will no longer be able to include a provision granting the company the right of first refusal with the respect to an extension or renewal of a contract.

* Boards can no longer impose a fine against a unit owner for a violation committed by his or her guest or a tenant, unless the unit owner had participated or authorized the violation; had prior notice of the violation; or had the opportunity to stop the violation and failed to do so. Bottom line, the association will have to send the owner a courtesy notice before fining him or her. It is very rare that an owner even knows about the violation prior to receiving the association's notice. As to the procedure to send a warning prior to sending a hearing fine notice has always been the law. This addition is just extraneous.

* Board members must now be homeowners without exception, but the officers of the association need not be unit owners unless required by the association's governing documents. This change in the law does not make much sense. Most officers are board members who are unit owners. Most exceptions pertain to developers whose appointed members of the boards are not unit owners but are often officers of the association. Officers who are on boards but are not elected by the membership are not accountable to the homeowners in the same manner as those who are elected by the membership.

* An association shall not adopt any rule or regulation that would have the effect of prohibiting, or unreasonably interfering with, a candidate in his or her campaign for directorship. The campaign may be limited to 90 days before the date the ballots are required to be returned to the association. Within 30 days before the election, a candidate may request the association, at its expense, send a candidate informational statement to owners in the community. The statement must not be any longer than a typed single page, must not contain any defamatory, libelous or profane information or language, and may be sent with a secret ballot, or in a separate mailing. The association -- its directors, officers, employees and agents -- are immune from criminal or civil liability for any act or omission that arises out of the publication or disclosure of any information related to any person, and which occurs in the course of carrying out the duties of this section.

* Members of a board are not personally liable to the victims of crimes occurring on the property. Punitive damages may not be recovered against the board or its officers for acts or omissions that occur in their official capacity as members and as officers.

* Associations shall not adopt any rule or regulation that would prevent or unreasonably interfere with the collection of the required percentage of signatures for a petition to the board.

* The homeowner forum is to be scheduled for the beginning and at the ending of each meeting. Comments by the unit owners at the beginning of each meeting must be limited to items listed on the agenda.

* All meetings, except executive meetings, must now be audio recorded and the minutes must be recorded. Not more than 30 days after each meeting, the audio recording of the meeting, minutes and a summary of the minutes are to be made available to unit owners upon their requests, and the association may charge the homeowner for cost. This is an example of a new law that conflicts with another new law that is found in SB 183, which amends NRS116.31175 subsection 1d, which states that the association does not have to provide a copy of the minutes if it is in the process of being developed for final consideration by the board and has not been placed on the agenda for final approval.

* At hearings, homeowners have the right of due process as set forth by standards to be adopted by the Common-Interest Communities & Condominium Hotels Commission. This includes the right to legal counsel, the right to present witnesses and the right to present information relating to any conflict of interest of any member of the hearing panel.

* If an association receives a written complaint alleging that the board has violated NRS 116 or their governing documents, upon written request of the owner, the subject of the complaint will be placed on the agenda of the next regularly scheduled board meeting. In addition, no later than 10 days upon receiving such a complaint, the association is not only to acknowledge receipt of the complaint, but must also notify the owner that if the owner submits a written request that the subject will be placed on the agenda.

* Associations must not prohibit a unit owner or occupant from exhibiting one or more political signs subject to the following conditions. All signs must not be any larger than 24-inches-by-36 inches. A tenant must receive, in writing, permission from his or her owner to display a political sign. All political signs are subject to any provisions of laws governing the posting of political signs. You can display as many signs as you want, but you may not exhibit more than one political sign per candidate, political party or ballot question. Homeowners who are running for a board position is covered by this law and could display campaign signs for themselves.

* Drought-tolerant landscaping now includes the use of mulches such as decorative rocks or artificial turf. This law is in response to associations who have made it unreasonable for an owner to change to drought-tolerant landscaping.

* SB 182 expands the CICCH by adding two more homeowners who reside in the state. The current composition includes, by statute, an attorney, CPA, community manager, a homeowner and a developer.

* SB 182 comes into conflict with AB 350 on the subject of punitive damages. SB 182 states that punitive damages may be awarded for willful and material failure to comply with NRS 116, if the failure is established by clear and convincing evidence, except as otherwise provided in NRS 116.31036. AB 350 states that 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 or officers of the board (NRS 116.31105. 3 a, b, c).

As you can see many changes were made to association laws with the passage of this bill.

Barbara Holland, certified property manager, is president and owner of H&L Realty and Management Co. To ask her a question, e-mail support@hlrealty.com.