Nevada Administrative Code Chapter 116 - Common-Interest Ownership
Nevada Administrative Code (NAC)
Chapter 116 — Common-Interest Ownership
Overview:
Chapter 116 governs common-interest communities (CICs) in Nevada, which include condominiums, planned communities, and cooperatives. The rules cover the formation, governance, management, and financial responsibilities of homeowners’ associations (HOAs) and unit owners. The chapter implements the Nevada Common-Interest Ownership Act and ensures that CICs are managed transparently, fairly, and efficiently.
1. Definitions and General Provisions (NAC 116.010 – NAC 116.050)
Key points:
Defines terms such as:
“Common-interest community”: a property where individual units or lots are owned separately while common areas are shared.
“Association”: the governing body of the CIC responsible for management and enforcement of rules.
“Unit owner”: an individual or entity owning a separate lot or unit within the CIC.
Establishes that the NAC applies to all associations and common-interest communities in Nevada.
Sets general principles, including fair treatment, transparency, and compliance with statutory obligations.
Why it matters:
Provides clarity on roles, responsibilities, and scope, ensuring all stakeholders understand their legal standing.
2. Formation of Associations (NAC 116.060 – NAC 116.100)
Key points:
Developers must record a declaration for the CIC, which includes:
Legal description of the property.
Allocation of common and separate interests.
Rules for governance and management.
Associations are automatically created upon recording the declaration, giving them legal authority to manage common areas and enforce rules.
Requirements include naming the association and appointing initial board members.
Why it matters:
Establishes the legal foundation for governance, ensuring the association can operate and manage the community effectively.
3. Board of Directors and Governance (NAC 116.110 – NAC 116.150)
Key points:
Associations are managed by a board of directors elected by unit owners.
Board duties include:
Enforcing covenants and rules.
Maintaining common areas.
Preparing budgets and financial reports.
Officers must act in good faith, with care and loyalty toward the community.
Certain decisions, like assessments or major repairs, may require unit owner approval.
Why it matters:
Ensures responsible management and accountability in community decision-making.
4. Financial Management and Assessments (NAC 116.160 – NAC 116.210)
Key points:
Associations may levy assessments to fund common expenses, such as maintenance, insurance, or reserves.
Rules cover:
Notice requirements for assessments.
Late fees, collection procedures, and liens.
Annual budgets and reserve studies to ensure financial stability.
Associations must maintain separate bank accounts and keep accurate records of all transactions.
Why it matters:
Promotes financial transparency and sustainability, protecting both the association and unit owners from mismanagement.
5. Meetings and Voting (NAC 116.220 – NAC 116.270)
Key points:
Annual meetings are required for all associations to elect directors and approve budgets.
Special meetings may be called by the board or a minimum percentage of unit owners.
Voting rules include:
One vote per unit, unless otherwise specified.
Quorum requirements for valid decision-making.
Procedures for proxy voting and written ballots.
Minutes must be recorded and available to unit owners.
Why it matters:
Ensures owner participation and democratic governance, allowing unit owners to influence decisions affecting the community.
6. Rules and Dispute Resolution (NAC 116.280 – NAC 116.320)
Key points:
Associations may adopt rules governing:
Use of common areas.
Architectural standards.
Noise, parking, and other community regulations.
Disputes between unit owners and associations must follow internal procedures first, often involving:
Written notices.
Hearings or mediation.
Nevada law encourages alternative dispute resolution before litigation.
Why it matters:
Balances the authority of the association with the rights of unit owners, minimizing conflicts and promoting harmonious living.
7. Records and Transparency (NAC 116.330 – NAC 116.370)
Key points:
Associations must maintain records, including:
Financial statements, budgets, and assessment ledgers.
Governing documents and amendments.
Minutes of meetings and board resolutions.
Unit owners have a right to inspect or copy records under specific procedures.
Associations may charge reasonable fees for copies.
Why it matters:
Enhances accountability and transparency, allowing owners to verify proper management and prevent abuse.
8. Enforcement and Penalties (NAC 116.380 – NAC 116.410)
Key points:
Associations may enforce rules through:
Fines for rule violations.
Suspension of common area privileges (limited by law).
Legal action for nonpayment of assessments.
Penalties must be reasonable, documented, and in compliance with statutory limits.
The State may intervene in cases of serious mismanagement or violation of law.
Why it matters:
Provides mechanisms to maintain order and compliance while protecting the rights of unit owners.
✅ Summary of Key Rule Areas
| Rule Section | What It Regulates | Core Purpose |
|---|---|---|
| NAC 116.010–050 | Definitions and scope | Clarifies terms and applicability |
| NAC 116.060–100 | Formation of associations | Legal establishment of CICs |
| NAC 116.110–150 | Board governance | Duties, elections, and accountability |
| NAC 116.160–210 | Financial management | Budgets, assessments, and transparency |
| NAC 116.220–270 | Meetings and voting | Owner participation and democratic decisions |
| NAC 116.280–320 | Rules and dispute resolution | Community order and conflict resolution |
| NAC 116.330–370 | Records and transparency | Access to information and oversight |
| NAC 116.380–410 | Enforcement and penalties | Compliance and remedies for violations |
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