Nevada HOA Developer Turnover: When Owners Take Control
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Key takeaways
- Developers run new HOAs at first. The declarant can generally appoint the board during a limited period of control.
- Owners gain seats in stages. Owners generally elect board members as more homes are sold, starting at 25 percent in most communities.
- Control has a deadline. It generally ends 60 days after 75 percent of units are sold, or 90 percent in communities of 1,000 or more.
- The handover is detailed. Within 30 days, the developer must deliver records, funds, a reserve study, warranties and more.
- Review everything early. Construction defect claims and reserve shortfalls are easier to address soon after turnover.
You bought in a new Las Vegas master plan, and the board is made up of developer employees. When do owners get a say? Nevada HOA developer turnover follows a schedule in NRS Chapter 116, with owner board seats added in stages and a firm end to developer control. This guide, part of our series on HOA board fiduciary duties, explains each stage and what owners should check.
What is Nevada HOA developer turnover?
In short: it is the transfer of the association from the developer to a board elected by owners.
In Nevada, the developer is called the declarant. The declaration can give the declarant the right to appoint and remove board members and officers for a period of declarant control (NRS 116.31032). During that time, the developer’s appointees generally run the budget, contracts and rules.
Nevada HOA developer turnover ends that period. Owners elect the board, the developer hands over the records and funds, and the association starts managing itself. It is one of the most important moments in a new community’s life, because problems found later can be harder to fix.
When do owners get board seats?
In short: generally after 25 percent of units are sold, and more after 50 percent.
In communities under 1,000 units, owners generally elect at least one board member, and 25 percent of the board, within 60 days after 25 percent of units sell. In communities of 1,000 or more units, that step generally comes after 15 percent are conveyed.
Within 60 days after 50 percent of units are conveyed, owners generally must elect at least one-third of the board. These seats give owners a voice and access to information before full turnover. Our guide to HOA election rules covers how those elections should run.
When does developer control end?
In short: at the earliest of several events set by NRS 116.31032.
Declarant control generally ends no later than the earliest of these events:
- 60 days after 75 percent of the units that may be created are conveyed to owners, in communities of fewer than 1,000 units.
- 60 days after 90 percent are conveyed, in communities of 1,000 or more units.
- Five years after all declarants stop offering units for sale in the ordinary course of business.
- Five years after any right to add new units was last exercised.
- The day the declarant records an instrument voluntarily giving up control, after notice to owners.
- In some mixed communities that include a time-share plan, 120 days after 80 percent are conveyed.
A developer that gives up control early may still keep the right to approve certain actions for the rest of the period, if it records that reservation. Read any recorded notice closely so you know what the new board can and cannot do alone.
What must the developer hand over?
In short: the property, records and money of the association, generally within 30 days after owners can elect a board majority.
Under NRS 116.31038, the declarant generally must deliver the declaration, bylaws, minute books, rules and other records. It must also hand over the association’s funds or control of them, and an accounting of those funds. It must also provide audited financial statements for each fiscal year, and generally pays for an ancillary audit due within 210 days after control ends.
The list also generally includes a reserve study by a registered reserve study specialist, and the reserve account. The developer must also disclose in writing how much it subsidized assessments per unit. Other items include plans and specifications, insurance policies, warranties, occupancy certificates, permits, a list of owners and lenders, and employment and service contracts.
Nevada HOA developer turnover often goes wrong when items are missing or incomplete. Make a checklist from the statute and confirm each item in writing. If the developer is slow to deliver, the new board should ask in writing and keep a record.
Is your HOA about to take over from the developer?
Send us the declaration, the most recent budget and reserve study, the developer’s turnover list, any audit reports and a list of known construction issues. We can give you an initial read in one conversation on your options.
What should the new board review first?
In short: the reserves, the finances, the contracts and the condition of the common elements.
Compare the reserve study with the actual reserve balance. If the developer subsidized assessments, dues may need to rise once the subsidy stops. The new board will adopt the next budget, which owners can reject only under the rules in our guide to Nevada HOA budget ratification.
Review every contract the developer signed for the association, such as management, landscaping and amenity agreements. Some may be long or favor companies tied to the developer. Look for unusual payments too, and see our guide to HOA misuse of funds if anything looks wrong.
Owners can also request association records, which generally must be made available within 21 days of a written request (NRS 116.31175). Our guide to HOA records requests in Nevada explains how.
What about construction defects after turnover?
In short: inspect the common elements early, because defect claims have strict deadlines.
Many associations hire engineers to inspect roofs, walls, drainage, roads and amenities around turnover. Nevada generally sets a 10-year statute of repose for construction defect claims, measured from substantial completion (NRS 11.202). Pre-lawsuit notice steps under NRS Chapter 40 also apply.
An association can generally sue over defects in the common elements and other areas it must maintain. NRS 116.31088 generally requires an owner vote and advance written notice first. Get legal advice before the deadlines run. The earlier defects are documented, the stronger the record.
How do owners address Nevada HOA developer turnover problems?
In short: document the issue, demand the missing items in writing and use the state’s complaint or mediation options.
Start with a written demand that lists each missing or incomplete item and cites the statute. Keep copies of every request and reply. An aggrieved owner can generally file a complaint with the Real Estate Division, usually within one year of discovering the violation, as our guide to the Nevada HOA Ombudsman explains.
Many disputes over the CC&Rs, bylaws or rules generally must go to mediation or another program before court (NRS 38.310). Statutory turnover and defect claims may follow different procedures. Owners in new Southern Nevada master plans can also see our Las Vegas HOA lawyer page.
Ready to Protect Your Rights?
Whether the developer is holding back records, the reserves look short or defects are showing up, we can help. We will review the declaration, the turnover documents and the finances, and give you our assessment of your options. Schedule your free consultation and speak directly with a Nevada and California HOA attorney.
Frequently asked questions
Generally 60 days after 75 percent of units are sold, or 90 percent in communities of 1,000 or more units. Other triggers in NRS 116.31032 can end control sooner.
Yes. Owners generally elect at least one member and 25 percent of the board after 25 percent of units sell, or 15 percent in large communities.
Generally within 30 days after owners other than the developer may elect a majority of the board (NRS 116.31038).
Yes. The turnover items generally include a complete reserve study by a registered reserve study specialist.
They may. If the developer subsidized assessments, the new board may need to raise dues once the subsidy ends.
Often yes, for common elements and areas it maintains, subject to an owner vote, notice rules and a 10-year statute of repose. Get advice early.
Conclusion
Nevada HOA developer turnover follows a set path. Owners gain board seats as homes sell, developer control ends at the earliest statutory trigger, and the developer must hand over records, funds and a reserve study within 30 days.
Use the statute as a checklist, review the reserves and contracts first, and inspect the common elements before deadlines pass. For the wider framework, see our Nevada NRS 116 guide, or contact our HOA dispute resolution team.
Disclaimer: This article provides general information about Nevada HOA law and is not legal advice. Reading it does not create an attorney-client relationship. Outcomes depend on the facts and the association’s governing documents.
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