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HOA Owners Dodged a Bullet in 2023
By: Howard McCarley
If you are a homeowner in a Common Interest Community (commonly known as an HOA) you should know that your rights were severely threatened during the 2023 Nevada legislative session.
Many living in Nevada didn’t grow up here and didn’t attend school here. They may not be aware of how the Nevada legislature operates – the legislature meets for a period of 120 days every other year. Special sessions may be called by the Governor but only for a specific purpose designated by the Governor.
The effect of this structure is to create a logjam of legislative acts that are all released at about the same time. The effect of this is that some bills may fly under the radar with little or no public scrutiny if overshadowed by higher profile legislation. One such Bill was SB 417 (SB prefix means it was first submitted in the State Senate).
SB 417 is innocuously headed “Revises provisions regarding common interest communities”. Sounds innocent enough until you actually know what was proposed: A board member, community manager, or officer or employee or agent of an association may bring a separate action to recover compensatory damages and attorney’s fees for retaliatory action by a resident. Retaliatory action includes, without limitation, making defamatory statements on social media or other similar online forum Regulators were given the ability to levy an administrative fine of $1000 and sanctions disqualifying a person from serving as a director for up to ten years.
if a resident engaged in retaliation as defined by the bill Owners who file Intervention Affidavits filed with the Real Estate Division (Complaints about an HOA Board or Community Manager) would no longer be held to a standard showing they “Knowingly” filing a false or fraudulent affidavit. Rather, they could simply be found to be vexatious, misleading, retaliatory, and frivolous to be sanctioned.
In layman’s terms an association board or a community manager could seek monetary damages from a resident who they claimed engaged in defamatory speech or actions whether in person or on social media. Even were the individual accused successful in proving the statements were not defamatory they would face months or years of court hearings and appearances and potentially hundreds of thousands of dollars in legal fees.
The legislation sought to reverse action over a decade old, that protected owners from potential abuse by deep pockets and “bully” association boards. As proposed SB 417 would have discouraged many people from questioning or commenting on the activities, or actions of their community manager, or actions of their board of directors.
Fortunately, a small handful of individuals became aware of the proposed changes and through an informal network acted. Public testimony followed at the State Senate Judiciary Committee meeting. While on the Senate side the bill was passed out of committee, before the bill was forwarded to the Assembly counterpart major changes were made. These changes were a direct result of the reservations expressed by residents on the chilling effect the bill would have on community participation.
In its final iteration and as passed by the full legislature the bill as proposed was gutted. The most egregious provisions were removed. The final version raises the amount an association can charge for extraordinary information requests from $10 per hour to $25 per hour, reasserts that sanctions may be taken for filing a complaint only if the complainant knowingly filed the complaint, and that the CIC may label a resident “vexatious” if the residents knowingly files two false of fraudulent intervention affidavits.
Legislation is always subject to change in the future. I am confident that two years from now there will be new changes proposed to NRS 116. With owners lacking a real voice, The proposals advanced by special interests will no doubt try again after its unsuccessful effort this session..
The success in this session was solely based on a relatively small group of homeowners becoming aware of the proposed legislation and taking action to write, call, and email. With little work they let their state legislators know that there was serious opposition to the changes. HOAs are typically not a good source of information concerning proposed legislation..
HOA owners need to be vigilant in looking for proposed changes to the law that govern our communities. We need to communicate the negative effects we may see to our friends and neighbors, and let legislators know if we oppose changes that negatively affect our ownership and representation rights.
We need our HOA governing bodies to make it a similar priority. One of the best tools for keeping an eye on legislation is NELIS (Nevada Electronic Legislation Information System) NELIS Home (state.nv.us) Nelis is a searchable database of legislation in the State of Nevada. A user can review all proposed legislation, search for keywords (like HOA, or common interest community) and see exactly what changes (if any) are being proposed.
The system also allows contact with legislator email and file support or opposition to legislation along with any comments you might have – a powerful tool for protecting your rights. Be alert to changes that would affect the rights and responsibilities of management companies, boards, and individual homeowners. If you see something that you feel would negatively affect your ownership rights or your rights to be represented on a board, reach out to your friends and neighbors – let them know what is being proposed, how it might affect them, and how to contact their legislator to voice their opinion
Editor’s note: Thank you Howard McCarley for submitting that excellent feature above, “HOA owners dodged a bullet.”
For readers not familiar with Mr. McCarley, he is a homeowner activist who monitors and comments to our legislators regarding bills being presented to the Nevada legislature as well as the rules and changes within NRED (Nevada Real Estate Division) concerning NRS116 & NRS116A and homeowner’s rights.
Thank you Mr McCarley- you took the time to explain, in great detail, how dangerous SB417 was. Personally, I contacted my representatives and let them know that this bill was tantamount to putting a muzzle on homeowners, especially many easily intimidated seniors. HOA residence should also look at who was behind trying to get SB417 passed. It’s frightening to think that the very people that are supposed to represent us want to silence us.
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