Existing law prohibits certain civil actions involving common-interest communities and condominium hotels from being commenced in court unless the action has first been submitted to mediation or referred to a program of dispute resolution established by the Real Estate Division of the Department of Business and Industry. (NRS 38.310) Section 2 of this bill requires the Division to adopt regulations establishing a mechanism by which a unit's owner who is a party to a claim submitted to mediation may deposit into an escrow account maintained by the Division an amount of money equal to any assessment that is at issue in the claim and any assessment that becomes due during the mediation period. Under section 2, any assessment for which a unit's owner has deposited an amount equal to the assessment into the escrow account does not become past due during the mediation period and for a certain specified time after the mediation period under certain circumstances. Section 3 of this bill authorizes a mediator to issue a report if a party to the mediation fails to mediate in good faith. Section 3 provides that such a report is admissible in a civil action involving the claim. If the report indicates that an association has failed to mediate in good faith, section 3 requires the report to be transmitted to the Division and the Commission for Common-Interest Communities and Condominium Hotels. Section 4 of this bill makes a conforming change to indicate the proper placement of sections 2 and 3 in the Nevada Revised Statutes. Existing law authorizes the Commission to take certain enforcement actions against certain persons, including a member of the executive board of an association and a unit's owner, who commit a violation of the provisions of existing law governing common-interest communities. Such actions include the imposition of an administrative fine in an amount not to exceed $1,000 for each violation and, under certain circumstances, the issuance of an order for the removal of a member of the executive board from his or her office. (NRS 116.785) Section 8 of this bill requires the parties to a claim involving a common-interest community submitted to mediation to mediate in good faith, thereby subjecting a person who violates that requirement to enforcement action by the Commission. Existing law provides for the election of members of the executive board of a unit-owners' association and sets forth provisions governing the conduct of such elections and the qualifications for a person to serve as a member of the executive board. (NRS 116.31034) Section 6 of this bill requires the Commission for Common-Interest Communities and Condominium Hotels to conduct an election to replace the members of the executive board of an association, other than any member appointed by a declarant, if the Commission is notified by the Real Estate Administrator that 5 percent or more of the units' owners in an association have deposited money into the escrow account maintained by the Division pursuant to section 2 at any one time. Section 7 of this bill sets forth various requirements governing the conduct of such an election by the Commission. Section 6 requires the Commission to serve upon the executive board of the association notice before conducting such an election. Under section 6, a member of the executive board, other than a member appointed by a declarant, who is serving on the date on which the Commission serves such notice is, with certain exceptions, disqualified from being a candidate for or serving as a member of the executive board for 5 years after the date on which the notice is served. Section 10 of this bill provides that the rights and responsibilities of units' owners set forth in sections 6 and 7 concerning elections conducted by the Commission apply with respect to master associations only to persons who elect the board of a master association. Section 13 of this bill exempts an election conducted by the Commission from certain requirements imposed on an association for conducting a vote without a meeting. Section 9 of this bill makes a conforming change to indicate the proper placement of sections 6-8 in the Nevada Revised Statutes. Sections 11 and 12 of this bill make conforming changes to account for the differing procedures for elections conducted by an association and elections conducted by the Commission.

Statutes affected:
As Introduced: 38.300, 116.1203, 116.212, 116.31034, 116.3108, 116.311
BDR: 38.300, 116.1203, 116.212, 116.31034, 116.3108, 116.311