SB433 - Revises provisions governing common-interest communities. (BDR 10-1105)

S.B. 433 - *SB433* SENATE BILL NO. 433–COMMITTEE ON JUDICIARY MARCH 24, 2025 ____________ Referred to Committee on Judiciary SUMMARY—Revises provisions governing common-interest communities. (BDR 10-1105) FISCAL NOTE: Effect on Local Government: Increases or Newly Provides for Term of Imprisonment in County or City Jail or Detention Facility. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to property; authorizing the executive board of a unit-owners’ association to make an assessment to fund certain repairs; requiring a structural inspection of certain buildings in a common-interest community; requiring an association to establish reserves for corrective repairs; requiring a study of reserves of an association to include an estimate of the costs of certain repairs; revising provisions governing the duty of the executive board to provide or make available to a unit’s owner certain records; prohibiting certain persons within or associated with a common-interest community from committing certain acts; requiring a written report from a structural inspection of certain buildings in a common-interest community to be provided under certain circumstances; eliminating the authority of the Real Estate Division of the Department of Business and Industry to establish a program for rendering of certain disputes; authorizing the Commission for Common-Interest Communities and Condominium Hotels or a hearing panel to prohibit certain persons from serving on the executive board; revising certain provisions governing actions for constructional defects; providing penalties; and providing other matters properly relating thereto. – 2 – - *SB433* Legislative Counsel’s Digest: Section 16 of this bill: (1) establishes certain requirements for the structural 1 inspection of the primary load-bearing system of a residential building in a 2 common-interest community that meets certain criteria relating to height and 3 materials and techniques of construction, defined as a “covered building” in section 4 5 of this bill; and (2) imposes certain duties on a structural inspector who performs 5 such a structural inspection. Section 16 also: (1) prohibits a certificate of 6 occupancy to be issued for a covered building until a structural inspector confirms 7 that the primary-load bearing system of the building conforms to approved 8 construction plans; (2) authorizes the office of a city or county building official to 9 recover any additional cost incurred as a result of such structural inspections; and 10 (3) requires the governing body of certain cities and counties to adopt ordinances to 11 carry out these provisions. 12 Section 17 of this bill sets forth certain periods by which an owner of a covered 13 building is required to retain a structural inspector to perform certain structural 14 inspections of the building components of the primary load-bearing system of a 15 covered building. Section 57 of this bill requires the owner of a covered building to 16 retain a structural inspector to perform such a structural inspection of the building 17 components of the primary load-bearing system of a covered building for which a 18 certificate of occupancy was issued before the date on which certain provisions of 19 this bill become effective. 20 Section 18 of this bill provides that a structural inspection may be performed in 21 conjunction with any other required inspection. Section 19 of this bill requires a 22 structural inspector, before undertaking a structural inspection of a covered 23 building, to review the written report from the most recent structural inspection of 24 the covered building. Sections 20, 31 and 32 of this bill require a structural 25 inspector who has performed a structural inspection to issue a written report and 26 sets forth certain requirements for that report, including, without limitation, 27 requiring the report to be: (1) filed with, or provided or made available to, certain 28 persons; and (2) included within a public offering statement of a common-interest 29 community and a resale package. Section 21 of this bill imposes certain duties on 30 the owner of a covered building who receives a written report of a structural 31 inspection. Section 22 of this bill requires the Commission for Common-Interest 32 Communities and Condominium Hotels to adopt regulations relating to structural 33 inspections. Sections 3-6, 8-13 and 23 of this bill define certain words and terms 34 for the purposes of such inspections. 35 Sections 15 and 26 of this bill: (1) authorize the executive board of an 36 association to make assessments for certain corrective repairs; and (2) require an 37 association to establish reserves for corrective repairs. Section 27 of this bill 38 requires the study of reserves of an association to include an estimate of the costs 39 associated with implementing any corrective repairs deemed necessary pursuant to 40 a written report of a structural inspector. 41 Section 24 of this bill revises certain provisions for the applicability to certain 42 planned communities of words and terms defined in sections 2-14 of this bill and 43 provisions governing structural inspections in sections 15-22 of this bill. 44 Existing law requires a declarant of a common-interest community to deliver to 45 an association certain property of the units’ owners and of the association held or 46 controlled by the declarant. (NRS 116.31038) Section 25 of this bill eliminates the 47 requirement that the declarant deliver a copy of any plans and specifications used in 48 the construction of the improvements in the common-interest community which 49 were completed within 2 years before the declaration was recorded. Section 25 50 requires the declarant to deliver: (1) a copy of any plans and specifications used in 51 the construction of the improvements to common elements in the common-interest 52 community; and (2) for any covered building, a manual of preventive maintenance 53 relating to the common elements with a statement of the funds necessary to perform 54 – 3 – - *SB433* the preventive maintenance in accordance with the schedule provided in the 55 manual. 56 Existing law: (1) prohibits certain persons within a common-interest 57 community from committing certain acts against another person within that same 58 common-interest community; and (2) provides that committing any such act is a 59 misdemeanor. (NRS 116.31184) Section 30 of this bill includes bullying and cyber- 60 bullying among the prohibited acts. Sections 2 and 7 of this bill define the terms 61 “bullying” and “cyber-bullying” for the purposes of such prohibitions. Section 14 62 of this bill revises the definition of the term “violation” to include violations of 63 such new prohibitions for the purposes of authorizing investigations and remedial 64 and disciplinary action, and section 59 of this bill repeals the existing definition of 65 the term “violation.” Sections 33, 38-40 and 44 of this bill make conforming 66 changes to eliminate references to the repealed definition of the term “violation.” 67 Existing law sets forth procedures by which: (1) a person who is aggrieved by 68 an alleged violation may file a written affidavit with the Real Estate Division of the 69 Department of Business and Industry; (2) the Division is required, except under 70 certain circumstances, to refer the affidavit to the Ombudsman for Owners in 71 Common-Interest Communities and Condominium Hotels for guidance and a 72 report; and (3) the Division investigates the alleged violation, files a formal 73 complaint with the Commission and schedules a hearing. (NRS 116.760, 116.765) 74 Section 41 of this bill requires the Division to refer the affidavit to the Ombudsman 75 if the Division determines that: (1) the allegations in the affidavit are not vexatious, 76 misleading, retaliatory, frivolous, false or fraudulent; and (2) the alleged violation, 77 if assumed to be true, would constitute a violation. Section 42 of this bill requires 78 the Administrator of the Division to file a formal complaint with the Commission 79 and schedule a hearing if, after receiving a report from the Ombudsman and 80 investigating the alleged violation, the Division reasonably believes that: (1) the 81 allegations in the affidavit are supported by probable cause; (2) the admissible 82 evidence is sufficient to support sanctions against the respondent by a 83 preponderance of the evidence; and (3) a decision to file a formal complaint with 84 the Commission is in the best interests of justice and associations in this State. 85 Section 43 of this bill authorizes the Commission or a hearing panel to prohibit 86 a respondent from serving on the executive board of an association for a period not 87 to exceed 10 years under certain circumstances. 88 Existing law requires the executive board of an association to provide, upon the 89 written request of a unit’s owner, a copy of certain records in electronic format at 90 no cost to the unit’s owner. (NRS 116.31175) Section 28 of this bill: (1) authorizes 91 the executive board to charge a fee to cover the actual costs of preparing a copy of 92 the records in electronic format, not to exceed 25 cents per page for the first 10 93 pages, and 10 cents per page thereafter; (2) revises the amount an executive board 94 may charge a unit’s owner to review any books, records, contracts or other papers 95 of the association; and (3) provides that the requirement to provide a copy of 96 records to a unit’s owner does not apply to the personnel records of the employees 97 of the association, including, without limitation, information relating to the salaries 98 and benefits of the employees and other information concerning the employees. 99 Existing law: (1) prohibits an executive board, a member of an executive board, 100 a community manager or an officer, employee or agent of an association from 101 taking, or directing or encouraging another person to take, any retaliatory action 102 against a unit’s owner under certain circumstances; and (2) authorizes, in addition 103 to any other remedy provided by law, a unit’s owner to bring a separate action to 104 recover compensatory damages and attorney’s fees and costs of bringing the action. 105 (NRS 116.31183) Section 29 of this bill: (1) similarly prohibits a unit’s owner, 106 tenant of a unit’s owner or guest or invitee of a unit’s owner or tenant of a unit’s 107 owner from taking retaliatory action against an executive board, a member of an 108 executive board, a community manager or an officer, employee or agent of an 109 – 4 – - *SB433* association under certain circumstances; (2) authorizes an executive board, a 110 member of an executive board, a community manager or an officer, employee or 111 agent of an association to bring an action for the same remedies; and (3) provides a 112 definition of the term “retaliatory action.” 113 Existing law authorizes the Division to establish a program for the rendering of 114 decisions on disputes relating to: (1) the interpretation, application or enforcement 115 of any covenants, conditions or restrictions applicable to residential property or any 116 bylaws, rules or regulations adopted by an association; or (2) the procedures used 117 for increasing, decreasing or imposing additional assessments upon residential 118 property. Existing law also provides that a civil action based upon a claim relating 119 to such a dispute may not be commenced in any court in this State unless the action 120 has been submitted to mediation or, if the parties agree, has been referred to the 121 program of the Division for the rendering of decisions on such disputes. (NRS 122 38.300-38.360) Sections 34-37 and 45-54 of this bill: (1) eliminate the authority of 123 the Division to establish a program for the rendering of decisions on such disputes; 124 (2) provide for such disputes to be submitted to arbitration as well as mediation; 125 and (3) delete references to the eliminated program of the Division. 126 Section 55 of this bill revises the definition of the term “constructional defect” 127 for the purposes of actions for constructional defects. Section 56 of this bill 128 authorizes a claimant in an action for constructional defects to recover any 129 reasonable attorney’s fees sufficient to place the claimant in as good a position as 130 the claimant would have been if the constructional defect did not exist. Section 58 131 of this bill provides that the provisions amended in sections 55 and 56 apply to 132 actions for constructional defects commenced before, on or after the effective date 133 of those sections. 134 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 116 of NRS is hereby amended by adding 1 thereto the provisions set forth as sections 2 to 22, inclusive, of this 2 act. 3 Sec. 2. 1. “Bullying” means written, verbal or electronic 4 expressions or physical acts or gestures, or any combination 5 thereof, that are directed at a person or group of persons, or a 6 single severe and willful act or expression that is directed at a 7 person or group of persons, and: 8 (a) Have the effect of: 9 (1) Physically harming a person or damaging the property 10 of a person; or 11 (2) Placing a person in reasonable fear of physical harm to 12 the person or damage to the property of the person; 13 (b) Interfere with the rights of a person by: 14 (1) Creating an intimidating or hostile environment for the 15 person; or 16 (2) Substantially interfering with the ability of the person to 17 participate in or benefit from services, activities or privileges 18 provided by an association; or 19 – 5 – - *SB433* (c) Are acts or conduct described in paragraph (a) or (b) and 1 are based upon the: 2 (1) Actual or perceived race, color, national origin, 3 ancestry, religion, gender identity or expression, sexual 4 orientation, physical or mental disability of a person, sex or any 5 other distinguishing characteristic or background of a person; or 6 (2) Association of a person with another person having one 7 or more of those actual or perceived characteristics. 8 2. The term includes, without limitation: 9 (a) Repeated or pervasive taunting, name-calling, belittling, 10 mocking or use of put-downs or demeaning humor regarding the 11 actual or perce [Text truncated for display. Full text available on LegiScan.]