Tract 12

Collections in Nevada Community Management

• Licensing for Collection Agency

  • Under Nevada law, community managers can opt to proceed to the lien stage without needing a collections agency license.

  • Important to note that a collection agency license is a separate requirement under Nevada law.

  • Statute (likely NRS 642) indicates that a community manager does not need a license to collect assessments up to the lien point.

  • After the lien point, managers or management companies must have a collection agency license if collecting as a significant part of their business.

• Correct Understanding of Laws

  • Law firms or title companies must have a collection license to collect assessments, regardless of the extent of their business in this area.

  • Correct interpretation ensures system compliance and upholds the authority to proceed as needed.

Lender Provisions and Public Offering Statements

• Lender Provisions

  • Found in the CC&Rs (Covenants, Conditions, and Restrictions) and are crucial for compliance.

• Public Offering Statement

  • Intended to disclose material facts affecting purchasing decisions.

  • The statement should contain:

    • Information critical for owners to present to lenders.

    • Details on easements in common areas.

    • Notification of potential home loss due to unpaid assessments.

  • Best answer: To disclose any material facts that may influence an owner's decision in purchasing property.

Rules, Fines, and Enforcement

• NRS 116.3102 Overview

  • Authority of union-owned associations is outlined, including their power to impose reasonable fines for document violations.

  • The association must comply with NRS 116.3103 requirements to enforce fines effectively.

• Enforcement Powers

  • Executive boards can impose fines, sanctions, and collection guidelines under NRS 116.

  • Violations range from improper vehicle parking to excessive alterations contravening community guidelines.

  • The rules must be:

    • Reasonably related to association purposes.

    • Explicit in prohibitions.

    • In accordance with governing documents.

    • Enforced uniformly to avoid arbitrary discrepancies.

• Guidelines for Rule Adoption

  • Notice must be provided to unit owners before enforcing new rules, ensuring transparency and compliance.

  • Expectation of a fine schedule detailing specific violations and fines must be shared with owners.

Compliance Enforcement Mechanism

• Operational Details

  • Fines must be reasonable and uniformly enforced.

  • Associations need a process in place for managing recurring violations, including appropriate notices and an opportunity for owners to cure violations.

  • The board must document decisions and maintain records of violations.

Communication Requirements

• Notices and Hearings

  • Written notices should detail the nature of violations with photographic evidence whenever feasible.

  • Owners deserve fair notice and opportunities to respond.

  • Hearings must accommodate a standard notice period with a chance for owners to present their case.

Financial Management and Record Keeping

• Management Responsibilities

  • Must maintain financial accounts, ensuring all transactions are accurate and timely.

  • Association funds should be managed responsibly, with a clear overview of accounts maintained independently from violation fines.

• Record Keeping

  • Detailed records must be available for unit owners upon request and maintained per statutory guidelines.

  • Duration of record retention varies, with some needing to be kept indefinitely.

Educational and Legal Preparedness

• Continuing Education

  • Community managers must complete ongoing education to remain compliant and up-to-date on evolving laws/statutes.

  • Fiduciary duties demand thorough understanding and practice of responsibilities as community managers.

Conclusion

Overall, understanding the statutes, community regulations, and enforcement mechanisms is critical for effective community management in Nevada.