Nevada HOA Assessment Limits

Section 1: Overview

Nevada sets no statutory percentage cap on how much a homeowners association may raise assessments. What the state does instead is give unit owners the chance to reject the board's proposed budget — and if they stay quiet, the numbers stand. That ratification-by-rejection mechanism is the core of NRS Chapter 116, Nevada's enactment of the Uniform Common Interest Ownership Act (UCIOA), and the specific budget ratification process sits in NRS 116.31151.¹ Regular increases work through board adoption of operating and reserve budgets, owner ratification by non-rejection, a mandatory reserve study, and no percentage ceiling.² The association's assessment lien takes priority over the first security interest to the extent of up to nine months of common-expense assessments plus abatement and maintenance charges, under NRS 116.3116.³ On the national map, Nevada belongs to the ratification-mechanism states — those that control increases through an owner veto on the adopted budget — rather than the statutory-cap states led by California. What distinguishes Nevada within that group is the nine-month super-priority assessment lien.⁴ The sections that follow detail the authority to levy, the limits on regular increases, special assessments and the lien, the procedures in practice, and recent legislative and judicial activity.

Section 2: The assessment framework

2A. Authority to levy and allocate assessments

NRS Chapter 116 grants the unit-owners' association the power to adopt budgets for revenues, expenditures, and reserves — and to collect assessments for common expenses from unit owners.⁵ The chapter functions as a single comprehensive UCIOA statute covering condominiums, planned communities, and cooperatives created in Nevada.⁶ The power to set the assessment sits with the executive board, exercised through the annual budget process rather than through a standalone owner vote on a dollar figure.⁵ The recorded declaration controls how the association allocates common expenses among the units, in accordance with each unit's allocated interests.⁶ Reserves are mandatory. NRS 116.31152 requires the executive board to conduct a study of reserves at least once every five years, review it at least annually to determine whether reserves are sufficient, and adjust the funding plan as needed to provide adequate funding.⁷ Except for very small rural associations, that study must come from a person who holds a permit issued under NRS Chapter 116A, and a summary must reach the Real Estate Division within 45 days after the board adopts the study results.⁷ The reserve study acts as a substantive discipline on the budget: the board cannot set assessments at an arbitrary level, because the funding plan ties to a professionally prepared study of the community's major components.

2B. Limits on regular assessment increases

The principal control on regular increases is the budget ratification process in NRS 116.31151. No later than 30 days — and no sooner than 60 days — before the start of the fiscal year, the executive board must distribute to each unit owner a copy of the operating and reserve budgets, or a summary of them with notice of where owners can review the full documents.⁸ Within 60 days after adopting any proposed budget, the board must provide a summary to each owner and set a date for a ratification meeting no fewer than 14 days and no more than 30 days after mailing.¹ The statute states plainly: "unless at that meeting a majority of all units' owners, or any larger vote specified in the declaration, reject the proposed budget, the proposed budget is ratified, whether or not a quorum is present."¹ Owner silence ratifies the budget — there is no affirmative approval requirement. Nevada imposes no statutory percentage cap on the size of a regular increase; the operative limits are the ratification process, the mandatory reserve study, and any ceiling in the declaration.⁹ If the proposed budget is rejected, the last budget ratified by the owners continues until the owners ratify a new budget the board proposes.¹ A defective process — for example, failing to hold a proper ratification meeting under NRS 116.3108 — exposes the increase to challenge, and many such disputes must first move through mandatory alternative dispute resolution under NRS 38.300 to 38.360.¹⁰

2C. Special assessments, the super-priority lien, and foreclosure

Special assessments in Nevada draw their authority and limits from the declaration and the general assessment provisions of Chapter 116, not from a statutory percentage cap. The reserve study must also project whether one or more special assessments will be required to repair or replace major components.⁷ The association's lien under NRS 116.3116 attaches for any assessment from the time it becomes due and takes priority over all other liens — except liens recorded before the declaration, a first security interest recorded before the assessment became delinquent, and tax and governmental liens.³ The lien is also prior to that first security interest to the extent of charges incurred for abatement and maintenance under NRS 116.310312 and the common-expense assessments based on the periodic budget that would have become due during the nine months immediately preceding the recording of the notice of default and election to sell — unless FNMA or FHLMC regulations require a shorter period, which must not be less than six months.³ NRS 116.31162 through 116.31168 govern foreclosure of the lien, setting out the notice of delinquent assessment, the notice of default and election to sell, and the owner's right to pay.¹¹ Non-judicial foreclosure of the super-priority piece has generated substantial litigation over whether it extinguishes the first deed of trust. The defining decision came in SFR Investments Pool 1, LLC v. U.S. Bank, N.A. (2014), where the Supreme Court of Nevada held that NRS 116.3116 gives an association a super-priority lien for up to nine months of unpaid dues — a lien prior even to a first deed of trust recorded before the dues became delinquent.¹² That gives the association a strong collection position through the nine-month super-priority lien, subject to strict notice and foreclosure procedure.

Section 3: Assessment limits and procedures in practice

A. Regular assessment increase procedure

The board adopts the operating and reserve budgets, distributes them — or summaries — to owners 30 to 60 days before the fiscal year, provides a budget summary within 60 days after adoption, and holds a ratification meeting 14 to 30 days after mailing. The budget is ratified unless a majority of all owners reject it (NRS 116.31151).¹

B. Special assessment procedure

The board imposes special assessments under the association's assessment authority and the declaration. Chapter 116 supplies no percentage cap, so the authorizing terms and any notice requirements are declaration-defined, while the lien and collection consequences follow the same statute as regular assessments (NRS 116.3116).³

C. Caps, ceilings, and override mechanisms

Nevada supplies no statutory percentage cap on regular or special assessment increases. The controlling mechanisms are the ratification-by-rejection vote, the mandatory reserve study, and any ceiling in the declaration (NRS 116.31151; NRS 116.31152).⁹

D. Notice, documentation, and disclosure tied to assessments

NRS 116.31151 requires the budget distribution and ratification-meeting notice, and the board must also make the association's policy for collecting fees, fines, assessments, and costs available to owners.¹ To collect the super-priority lien, the association must follow the notice and foreclosure steps in NRS 116.31162 et seq., including a notice of delinquent assessment and a recorded notice of default and election to sell carrying a statutory 14-point warning.¹¹ On resale, NRS 116.4109 requires the seller to furnish a resale package stating the monthly assessment, any unpaid obligations, the current operating budget, and a reserve summary.¹³

Section 4: Recent legislative and judicial activity

A. Recent bills

Nevada's 2025 session produced one significant adjustment to the common-interest community framework. The ratification mechanism and the super-priority lien remained untouched, but one act updated what sellers must disclose and raised the Commission's maximum fine.

B. Recent appellate rulings

Nevada's appellate courts continued to work through the implications of the nine-month super-priority lien. In 2024, the Supreme Court issued a decision that refines how partial payments affect the super-priority piece — and limits how associations may apply those payments.

C. Active legislative debates

The 2025 session included reform proposals that would have required annual reserve studies and exempted smaller claims from mandatory mediation — SB 339 was one example. None of those proposals passed, so reserve-study frequency and ADR thresholds remain recurring issues likely to resurface in the 2027 session.¹⁷

Section 5: National positioning and related coverage

Nevada sits at the intersection of three approaches to assessment limits. The first is the statutory-cap model led by California, where Cal. Civ. Code § 5605(b) provides that "the board may not impose a regular assessment that is more than 20 percent greater than the regular assessment for the association's preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of a majority of a quorum of members."¹⁸ The second is the ratification-mechanism model — including Alaska, Colorado, Connecticut, Delaware, Maine, Minnesota, Missouri, Nebraska, New Mexico, Vermont, Washington, and Nevada — which controls increases through an owner veto on the adopted budget. Nevada stands out within this group for its nine-month super-priority assessment lien, longer than the six months in the model UCIOA provision.⁴ The third is the declaration-driven model of states such as Alabama, Arkansas, and Georgia, where assessment limits rest almost entirely on the recorded declaration. For multi-state operators and lenders entering Nevada, the practical implication is clear: the budget is ratified unless owners reject it, and the nine-month super-priority lien gives the association a strong collection position subject to strict foreclosure procedure. Nevada is a comprehensive UCIOA state with a dedicated regulatory regime administered by the Real Estate Division, the Commission for Common-Interest Communities and Condominium Hotels, and the Ombudsman.

1. Nev. Rev. Stat. § 116.31151 — Budget ratification ↩
2. Nev. Rev. Stat. § 116.31151 — Budget ratification process ↩
3. Nev. Rev. Stat. § 116.3116 — Liens against units for assessments ↩
4. Nev. Rev. Stat. § 116.3116 — Nine-month super-priority lien (comparative note) ↩
5. Nev. Rev. Stat. § 116.3102 — Powers of unit-owners' association ↩
6. Nev. Rev. Stat. § 116.1201 — Applicability ↩
7. Nev. Rev. Stat. § 116.31152 — Study of reserves ↩
8. Nev. Rev. Stat. § 116.31151(1) — Budget distribution timeline ↩
9. Nev. Rev. Stat. § 116.31151 — No statutory percentage cap on regular increases ↩
10. Nev. Rev. Stat. § 38.310 — Mandatory alternative dispute resolution ↩
11. Nev. Rev. Stat. § 116.31162 — Foreclosure of liens against units ↩
12. SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 130 Nev. 742, 334 P.3d 408 (2014) ↩
13. Nev. Rev. Stat. § 116.4109 — Resales of units ↩
14. Nevada Legislature, Assembly Bill 396, 83rd Session (2025), Chapter 365 ↩
15. Nevada Legislature, Assembly Bill 396, Second Reprint, Legislative Counsel's Digest (§§ 9, 10) ↩
16. Deutsche Bank Tr. Co. Ams. v. SFR Invs. Pool 1, LLC, 140 Nev. Adv. Op. 43 (2024) (No. 85073) ↩
17. Nevada Electronic Legislative Information System, 83rd (2025) Session ↩
18. Cal. Civ. Code § 5605 (West) ↩