HOA bills seek to prevent bullying of board, move more communications online
Homeowners associations (HOAs) — sometimes called “common-interest communities” — are organizations of elected officials within a subdivision or condominium complex that make and enforce rules for residents with the goal of ensuring a consistent quality across their neighborhoods.
Those rules can range from what colors residents’ houses can be to how long their grass can grow and where their trash can be stored.
HOAs also often provide services such as mowing residential lawns and maintaining community parks. However, because HOAs provide services, residents are often subject to fees (the national average is $250 a month, according to KNPR).
If these fees go unpaid, residents can be subject to fines and even foreclosure if it is a recurring issue. The duality of HOAs evokes strong opinions, including hate for the restrictions and love for the services provided by HOAs.
Common-interest communities are the fastest-growing residential governance models across the country. According to KNPR, there are 30 percent more HOAs now than there were a decade ago nationwide and more than 3,000 HOAs across the state, encompassing more than 500,000 Nevada residents.
As sine die quickly approaches, here’s a look at some of the bills that could affect HOAs and the many Nevadans who live in them:
Bill designed to rein in HOA criticisms
SB417, sponsored by the Senate Judiciary Committee, allows HOAs to charge a homeowner $25 an hour for a records review, rather than the rate of no more than $10 an hour that is in state law now. It passed out of the Senate on a 20-1 vote.
The bill would also allow HOAs to ban residents who have knowingly filed “a false or fraudulent affidavit with the [Real Estate] Division” on more than one occasion from running for a seat on the HOA executive board for not more than a decade — on top of the original maximum $1,000 administrative fine.
The original bill prohibited bullying, defined as “written, verbal or electronic expressions or physical acts or gestures, or any combination thereof, that are directed at a person or group of persons, or a single severe and willful act or expression that is directed at a person or group of persons” that would have the effect of — to name a few — damage to property, stalking, harassment and intention to harm the other person.
“Some of the actions that we’ve taken to protect HOA members have gone a little too far and expose executive board members and their employees to harassment,” Sen. Melanie Scheible (D-Las Vegas) said during her presentation of the bill on April 11. At the May 18 Assembly Judiciary Committee hearing, Scheible said HOA board members had faced threats to themselves and their children.
The bullying provisions were redacted via an amendment submitted Friday.
Opponents, including Sen. Jeff Stone (R-Henderson), raised concerns that the bill would likely chill criticisms of HOAs.
“HOAs have tremendous power here in Nevada,” Stone said during the bill’s work session. “I worry about stifling some free speech.”
The bill was heard in the Assembly Judiciary Committee on Thursday and passed unanimously on Friday, the deadline for bills to move out of their second committee.
Moving payments, documents and elections online
AB309, sponsored by Assemblywoman Alexis Hansen (R-Sparks), would allow residents to make their HOAs conduct association elections and recalls electronically. It would also allow associations to automate most recurring payments.
As the law stands now, every HOA in the state has to hold an annual election in which residents vote through mail-in ballots.
“This costs thousands of dollars for small associations and tens of thousands of dollars for large associations,” said Adam Clarkson of the Community Associations Institute’s Nevada Legislative Action Committee.
If AB309 passes, residents could participate in these elections on their phones, computers or tablets without spending funds on mail and decreasing paper waste. Associations also hope this will increase participation in elections, Clarkson said.
AB309 passed unanimously in the Assembly and passed out of the Senate Judiciary Committee on Friday.
SB378, sponsored by Sen. Nicole Cannizzaro (D-Las Vegas), makes changes to a law enacted in 2021 through SB186. State law requires notices with legal consequences, such as delinquency notices for unpaid dues, to meet certain requirements, such as using certified mail to notify the resident. However, notices without legal consequences fall under a general catch-all notice provision.
SB378 changes that catch-all provision to make the default for notices without legal consequences to be an owner’s email address unless an owner opts out of email because they would prefer a different method.
The 2021 law also required that residents be able to access their association documents online, but the language was overly broad, Clarkson said, and could require sensitive information — such as bank account numbers and Social Security numbers — to be online without required cybersecurity protections. He said it also required online posting of irrelevant information that increased document processing workload costs to residents.
The bill also clarifies that only governing documents, the HOA’s annual budget and the notices and agendas of upcoming meetings are required to be available online.
SB378 also imposes cybersecurity requirements for online payments, as well as cybersecurity insurance with a minimum aggregate coverage amount of at least $250,000 depending on the number of units within the HOA’s jurisdiction. The 2021 law did not address cybersecurity measures when implementing online payments.
SB378 passed unanimously through the Senate and passed unanimously through the Assembly Judiciary Committee on Friday.