Nevada HOA rule could let boards pile on unlimited fines — and even force homeowners to foreclose, critic warns

A Nevada law allows HOAs to impose unlimited fines on homeowners.

The rule is meant to address serious health and safety problems in homeowners association communities, but it is facing scrutiny over how much power it may give association boards.

A prominent HOA critic argued that the statute leaves homeowners at risk of open-ended penalties, including the possible loss of their homes, especially as regulators have yet to spell out which violations qualify.

What's happening?

The Commission for Common-Interest Communities and Condominium Hotels of Nevada's Division of Real Estate is meeting this week to revisit a long-disputed issue in the state's HOA rules.

At the center of the debate is a law that lets associations issue unlimited fines for conduct considered a threat to a community's "health, safety, and welfare," though there is no regulatory definition for that category, according to Nevada Current (h/t Reno Gazette Journal).

In Nevada, standard HOA violations are limited to $100 per occurrence and $1,000 annually. Alleged health, safety, and welfare violations are exempt from those limits, and if those fines go unpaid, associations can pursue collection through foreclosure.

Mike Kosor, a Southern Highlands homeowner and longtime HOA critic, said that setup creates serious risks for residents.

"When the law was first written, there was no definition of what constitutes an imminent threat to health, safety, and welfare. It became obvious that they needed one," he said, per the Current.

A workshop to discuss regulations began this week, and creating clearer rules for HOAS was one of the items on the agenda. It is the third such workshop in seven months after the commission previously rejected a proposed $10,000 cap.

Why does it matter?

Kosor argued that, as the rules stand, a health, safety, and welfare violation is "anything the executive board wants to say it is." He also told the Current that foreclosure "is not a safety remedy," adding, "A true danger to health, safety, or welfare requires a cure-focused remedy."

More than 600,000 Nevada homes are governed by about 3,700 HOAs.

HOAs across the country have drawn criticism for blocking money-saving home improvements, such solar panels or native lawns. 

What is being done?

The next step is the commission's latest workshop, as regulators may finally define what qualifies as a health, safety, and welfare violation and what limits, if any, should apply to fines. It was expected to run through Thursday or "until the Commission concludes its business," according to an official notice & agenda of the Nevada Commission for Common-Interest Communities and Condominium Hotels.

Kosor told the Current that clearer guardrails are urgently needed and argued that genuinely dangerous conditions should be addressed through direct intervention rather than prolonged collection actions.

"The association should seek direct abatement, emergency relief, injunctive relief, court intervention, municipal or code-enforcement assistance, or another remedy aimed at correcting the dangerous condition," he said.

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