REAL PROPERTY SECTION
REPORT ON 2016 ACTIVITIES
January 17, 2017
Executive Committee (EC) Meetings: The EC met every month but July and October. Meeting notices, agendas and minutes are disseminated to all Section members via the Listserve. The meeting is open to all Section members.
Legislation: With 2017 being a legislative year, the EC discussed several legislative proposals. In August, the Section submitted a number of proposals to the Board of Governors (BOG), all of which were approved by the BOG in September for advocacy by the EC (not the Section unless approved by the Section). The EC also submitted proposals from other Sections to Section members. No comments were received. Section proposals:
(a)Trustee's Sales. Over several legislative sessions NRS 107.080 has grown longer and more complicated. The aim of this amendment is to clarify and simplify the language by separating the existing statute into two separate statutes, one of which addresses residential foreclosures and the other commercial foreclosures.
(b)NRS Chapter 116. The following proposals were approved by the EC and BOG (for advocacy by the EC) in 2015, but did not make it into law, and are being reintroduced.
(i)Technical Correction. NRS 116.12075 exempts nonresidential condominiums from Chapter 116 but permits them to opt-in to all or parts (e.g., assessment lien rights) of Chapter 116. NRS 116.1201(2)(b) provides a similar exemption for planned communities, but in doing so erroneously refers to the nonresidential condominium statute, NRS 116.12075. This amendment would remove the planned community exemption from NRS 116.1201 (condominiums) and place it in its own section with language similar to NRS 116.12075.
(ii)Use of Unit. NRS 116.2117 establishes a process by which a declaration may be amended. As currently constituted, no amendment may “change the uses to which any unit is restricted, in the absence of unanimous consent.” This requirement was deleted by the 2009 Legislature and inexplicably added back in 2011. The EC, consistent with the 1994 amendments to the Uniform Law, does not believe all unit owners need to consent to the change of use of a particular unit and proposes deleting the unanimity requirement.
(iii)Board Vacancies. Existing law authorizes the governing documents of an association to require that vacancies on the executive board be filled by a vote of the membership. This amendment to NRS 116.3103authorizes the executive board to fill any vacancy in its membership until the earlier of the unexpired portion of any term and the next regularly scheduled election of executive board members, notwithstanding any provision of the governing documents to the contrary.
(iv)Water and Sewer Leaks. Under existing lawan association is authorized to enter the grounds of a unit, whether or not the unit is vacant, in certain circumstances to take certain actions if the unit owner refuses or fails to take such actions or comply with certain requirements. This amendment to NRS 116.310312 authorizes an association to enter the grounds of certain units in certain circumstances to abate any water or sewage leak that is causing damage to the common elements or another unit, and to remediate any resulting mold damage. The amendment also provides that, in addition to such authority, if certain units are vacant and there is a known water or sewage leak affecting the common elements or another unit, the association may enter the grounds of the unit pursuant to any applicable emergency provisions set forth in the governing documents for the purpose of abating the water or sewage leak and remediating any resulting mold damage.
(v)Board Elections with Candidates Equal to or Less than Vacant Positions. This amendment to NRS 116.31034 aims to simplify the election process in cases where the number of candidates running for election to the executive board is fewer than the number of vacancies. In such cases, the candidates are deemed elected to the board and the association must notify its members of that fact. The amendment also addresses the board's authority to fill vacancies unfilled by the election.
(vi)Transfer of Special Declarant's Rights on Foreclosure. Under existing law, upon a foreclosure of a declarant's unsold units the purchaser does not automatically acquire the special declarant rights. Such rights are only included if provision is specifically made for such transfer. This amendment to NRS 116.3104 reverses the default result by providing that the foreclosure transfers the special declarant rights unless the purchaser otherwise elects.
(vii)Unit Owner Meetings. This amendment to NRS 116.3108 clarifies when the annual meeting of the unit owners must be held and provides for the counting of ballots at that meeting.
(viii)Executive Session. These amendments to NRS 116.31083 and NRS 116.31085 provide that when the board meets in executive session, notice need only be given to those who are entitled to participate in the executive session; in the next notice given to all members the executive board must disclose the date and general nature of the matters discussed at the executive session meeting.
(ix)Proxies. Other than in connection with permitted delegate voting, existing law limits the persons to whom a unit owner may give a proxy to: members of the owner's immediate family, a tenant of the owner who resides in the common-interest community and another unit owner who resides in the community. This amendment to NRS 116.311 would permit a unit owner to give his or her proxy to the holder of a lien on the unit or a receiver for the unit. As lenders seek to better protect their interests in common interest communities, a unit owner's proxy may be requested. Unlike the abuses countered by the original limitation on the persons to whom a proxy may be given, a lien holder and a receiver each has a very specific and tangible interest in the unit.
(x)Association Insurance. This amendment to NRS 116.3113 would require an association to maintain directors and officers liability insurance.
(xi)Redemption of Tax Liens. Existing law requires a county tax receiver to execute and deliver a deed to the county treasurer under certain circumstances when the taxes on the property are delinquent. After the deed has been delivered to the county treasurer, certain persons are entitled to a reconveyance of the property upon payment of the amount of property taxes due, plus any costs, penalties and interest. These amendments to NRS 361.585 and 361.610would permit a common interest community association or an association or hotel unit owner under NRS chapter 116B that is foreclosing an assessment lien to exercise this right of reconveyance
(c)NRS Chapter 116B. Amendments to the hotel-condominium laws consistent with those described above to NRS Chapter 116.
(d)Uniform Commercial Real Estate Receivership Act (UCRERA). This law was approved by the Uniform Law Commissioners in 2015. Nevada legislators who are members of the Uniform Law Commission have indicated they intend to introduce this act in 2017. The EC intends to support the proposal, which would add to and clarify existing procedures, rights and powers dealing with court appointed receivers of commercial real estate. Nevada, like many other states, has few laws addressing the subject.
(e)Technical Corrections. The EC does not believe that AB 141, enacted by the Legislature in 2015, was properly codified into NRS Chapter 116 dealing with association foreclosure notices. AB 141 and SB 306 both covered the same subject, but the language in AB 141, which passed after SB 306, is not in the statutes. The EC is seeking to persuade LCB to correct the statutes. Similarly, the 2015 amendments to NRS 40.459 contained in AB 195 apply only to judgments and debts entered into as of or before certain dates. This distinction is not reflected in the statutes. The EC is attempting to have the statute clarified.
(f)Other Proposals. The EC elected not to proposed amendments to NRS Chapter 108 (mechanics' liens) addressing notice of tenant's posted security. The EC concluded that the proposal, though technical, would be wading into a very controversial area of law.
Section Governance. The State Bar sponsored a number of meetings in 2016 to discuss Section governance and funding. Many Sections have a large amount of funds carried over year to year. The RP Section is approximately $20,000, about in the middle of the pack. There was some discussion about making Sections spend these funds, but this was not approved. There is some loosening up of restrictions. Some sections use funds for hiring attorneys to write amicus briefs, hiring lobbyists or for scholarships to attend Annual meetings. The EC is concerned that these funds be put to good use and is always looking at the best ways to use these funds. At present the proposals have focused on CLE programs. It is likely also that Sections will be required to pay to the State Bar a fixed amount to cover services provided to the Section by the State Bar.
CLE: No Section CLE was presented at the 2016 Annual Meeting. The State Bar CLE program committee has approved a Section CLE presentation on drones at the 2017 Annual Meeting and will provide reimbursement of some expenses of the presenters. The Section will likely present an Legislative Update program in the summer or fall. The EC is also considering a program working with counsel to the Greater Las Vegas Area Realtors to discuss issues arising relating to the use of Realtor forms. The Commerce Tax remains a hot topic.
Event. The EC formed a committee to discuss whether the Section might establish an award to be given out in recognition of service to the bar or the profession. After discussion, the consensus of the EC was to establish an annual event, perhaps rotating every other year between Las Vegas and Reno, at which a nationally known speaker would make a presentation. Specifics are still under discussion. Past Section social events have not been well attended. The Section has had some discussion with the Business Law and Construction Law Sections about co-sponsored events and these remain under consideration.
Opinion Practice. The ABA and several other organizations have drafted a Statement on Customary Opinion Practices and requested that state bar organizations throughout the country comment on the draft. No Nevada commentary has yet been provided, but the opportunity remains.
Listserve: The Listserve continues to serve as a means of communication with Section members and is frequently used by Section leadership for information on Executive Committee meetings(agendas and minutes), new legislation and other matters of interest, such as new cases or Uniform Laws.
MBUCKLEY/12496839.1/005017.0002
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