Nevada Caps HOA Fines at $100 per Violation and $1,000 per Hearing

Two tiers, not one. NRS 116.31031(1)(b) splits every violation into those that pose an imminent threat of causing a substantial adverse effect on the health, safety or welfare of the owners or residents, as provided in regulations the Commission for Common-Interest Communities and Condominium Hotels is directed to adopt, and everything else. For an imminent-threat violation the fine must be commensurate with the severity and set by the board under the governing documents, with no dollar ceiling. For everything else, which is nearly every parking, paint, weed, trash-can, pet, sign and short-term-rental citation a Nevada board writes, the fine must be commensurate with the severity and must not exceed $100 for each violation or a total of $1,000 per hearing against each owner, tenant or invitee. The cap is on the fine only; the statute says the limitations do not apply to charges or costs collectible if the fine goes past due.

Three kinds of violation cannot be fined at all. A fine may not be imposed for a violation that is the subject of a construction penalty under NRS 116.310305. A fine may not be imposed for a governing-document violation involving a vehicle that was committed by a person delivering goods to, or performing services for, the owner, tenant or invitee, so the association cannot bill a homeowner because a plumber's van parked on the street. And under subsection 2, unless the violation poses an imminent threat, the board may not fine an owner or tenant for an invitee's violation unless the owner or tenant participated in or authorized it, had prior notice of it through a written notice to cure, or had an opportunity to stop it and did not.

The notice sequence is jurisdictional, and Nevada front-loads it. Under subsection 4(a) the owner, and separately any other person to be fined, must have received written notice of the applicable governing-document provisions not less than 30 days before the alleged violation. That is a notice of the rule, given in advance, not a notice of the violation. Under subsection 4(b), within a reasonable time after discovery, the person must receive written notice specifying the alleged violation in detail, the proposed action to cure it, the amount of the fine, and the date, time and location of a hearing, plus a clear and detailed photograph if the violation relates to the physical condition of the unit or grounds or to an act or omission that can be photographed. The statute adds that an owner is not deemed to have received written notice unless it was mailed to the address of the unit and, if different, to a mailing address the owner specified. If the association has adopted a fine policy at all, subsection 3 requires the secretary to hand-deliver or mail every unit a schedule of the fines that may be imposed.

The hearing is real and its rules sit in a second section. NRS 116.31031(6) requires a hearing before any fine unless the fine is paid first, the person waives the hearing in writing, or fails to appear after proper notice, and subsection 5 requires the board to schedule it so the person has a reasonable chance to prepare and attend. NRS 116.31085(4) then requires the board to hold that hearing in executive session unless the person asks in writing for an open hearing, and gives the person the right to attend every portion related to the alleged violation including the presentation of evidence and testimony of witnesses, the right to counsel, the right to present witnesses, and the right to raise a conflict of interest of any hearing-panel member. The person may not attend deliberations but is entitled to written notice of the decision within a reasonable time. Critically, NRS 116.31085(4)(d) provides that the 14-day cure period in NRS 116.31031(7) does not begin to run until that written decision is delivered. A board member who has not paid all assessments due from that member may not participate in the hearing or vote on the fine; if the member participates, the action taken at the hearing is void, and if the member votes, the vote is void.

What happens after the fine is where the money grows. NRS 116.3116(1) gives the association a lien on the unit for any fine from the time it becomes due, and treats collection costs charged under NRS 116.310313 as enforceable assessments. Past due fines must not bear interest under NRS 116.31031(11), but may include costs the association incurs in a civil action to collect. NRS 116.310313 lets an association charge reasonable fees to cover the costs of collecting a past due obligation and directs the Commission to fix the amounts. It did: NAC 116.470 caps the total fees connected with a notice of delinquent assessment at $2,925 plus certain additional costs, and itemizes the pieces, among them $240 for a demand or intent-to-lien letter, $520 for the notice of delinquent assessment lien, $145 for an intent-to-notice-of-default letter, $640 for the notice of default, $145 for an intent-to-notice-of-sale letter and $440 for the notice of sale. NAC 116.470(6) also freezes new collection fees for a one-time period of 15 business days after the owner or the owner's agent requests a payoff amount. NRS 116.31031(12) requires the association, if asked, to provide a statement of the remaining balance owed within 60 days of receiving any payment of a fine.

The hard stop on the association's side is foreclosure. NRS 116.31162(6) provides that an association may not foreclose its lien by sale based on a fine or penalty for a violation of the governing documents unless the violation poses an imminent threat of causing a substantial adverse effect on the health, safety or welfare of the owners or residents, or the penalty is imposed for failure to adhere to a schedule required under NRS 116.310305. An ordinary $100 landscaping or parking fine, however many 7-day increments it has accumulated, cannot support a sale of the home. The lien survives and can be collected in a civil action, but the nonjudicial foreclosure track is closed.

On the owner's side, the first defence is the notice trail. Ask for the 30-day advance notice of the rule required by NRS 116.31031(4)(a) and the photograph required by subparagraph (b)(1)(II); a fine imposed without them was imposed without authority, because subsection 4 says the board may not impose a fine unless those things happened. NRS 116.31065(6) reinforces this for rules adopted by the board rather than written in the CC&Rs: such a rule may be enforced by fine only if the association complies with NRS 116.31031, and NRS 116.31065(5) makes a rule that is not uniformly enforced unenforceable against every owner. NRS 116.31031(10) states these are minimum procedural requirements, so governing documents that give more protection control.

To escalate, an aggrieved person may file a written affidavit with the Real Estate Division under NRS 116.760 within one year after discovering the violation, but only after sending the association certified mail, return receipt requested, specifying the alleged violation in reasonable detail, any actual damages and the corrective action proposed, and giving it a reasonable opportunity to correct the problem. The affidavit goes on a Division form with evidence that reasonable efforts to resolve the matter failed. Knowingly filing a false or fraudulent affidavit exposes the filer to an administrative fine of up to $10,000, disqualification from serving on an executive board for up to 10 years, or both, and two such findings support designation as a vexatious affiant, after which the Division will not accept a filing without the Ombudsman's leave. Before any court action about the interpretation, application or enforcement of the CC&Rs or rules, NRS 38.310 requires that the association's own administrative procedures be exhausted and the claim be submitted to mediation under NRS 38.300 to 38.360, with the court directed to dismiss anything filed without that step; NRS 38.320 sets the filing fee at $50.