Nevada HOA Budget Approval

Section 1: Overview — How HOA budgets are approved in Nevada

Nevada uses a negative-option ratification mechanism to approve common-interest community budgets. The rules come from the Nevada Common-Interest Ownership Act, NRS chapter 116, which draws on the Uniform Common Interest Ownership Act and governs budgets adopted by condominium, planned-community, and cooperative associations.¹ The Legislature enacted the chapter in 1991, and it applies to communities created on or after January 1, 1992.¹ The core mechanic is straightforward: the executive board adopts a proposed budget, distributes a summary to owners, and the budget stands unless a majority of all units' owners reject it at a ratification meeting.² Nevada pairs that mechanism with a genuine statutory reserve regime — current law requires a reserve study at least once every five years and adequate reserve funding on a reasonable basis, both verified against the chapter's text.^{3, 4} An active regulatory overlay sits alongside the statute: the Office of the Ombudsman, the Commission for Common-Interest Communities and Condominium Hotels, a mandatory alternative-dispute-resolution process, and community-manager licensing. None of those bodies approves a budget. As a UCIOA state that adopted the 1982 version of the uniform act, Nevada shares the negative-option approach with a small group of jurisdictions. But its prescriptive reserve-study and reserve-funding requirements, together with a regulator-first enforcement model, make it more demanding than most. The Quick-Reference table below sets out the operative parameters before the operational sequence and adjacent obligations.

Section 2: The budget approval mechanism

2A. Quick-Reference Budget Mechanics Table

This table reflects NRS chapter 116 as it applies to condominiums, planned communities, and cooperatives.

2B. The budget approval sequence under NRS 116

The approval sequence starts with the executive board, which adopts a proposed operating and reserve budget for the community.² The board makes assessments at least annually, based on a budget adopted at least annually, and that budget must include both a daily-operations component and a reserve component as required by NRS 116.3115 — unless the declaration sets more stringent standards.⁴

Within 60 days after the board adopts a proposed budget, it must deliver a summary to each unit's owner and set a date for a meeting to consider ratification.² That summary carries reserve disclosures: it must describe the procedures used to estimate and accumulate cash reserves and identify the qualifications of the person responsible for preparing the reserve study required by NRS 116.31152.² The board may distribute the full budgets or, in lieu of full copies, a summary with written notice of where owners can review the budgets and that copies are available on request.²

The ratification meeting must take place not less than 14 days nor more than 30 days after the summaries go out.² Here is the defining feature of the Nevada mechanism: owners do not affirmatively vote to approve the budget. Unless a majority of all units' owners — or any larger percentage the declaration requires — reject the proposed budget at that meeting, the budget is ratified, whether or not a quorum is present.² This is negative-option ratification. Inaction by owners means the budget passes. If owners do reject the proposed budget, the periodic budget last ratified by the owners stays in effect until the owners ratify a new one proposed by the board.²

Ratifying the budget is distinct from levying the assessment. Ratification fixes the spending plan; the assessment is the charge the association makes against units to fund that plan. Under NRS 116.3115, once the board makes an assessment, it must do so at least annually based on the adopted budget, allocated against all units according to the declaration.⁴ Capital-improvement assessments carry a separate notice rule: the association must give each owner at least 21 calendar days' written notice of a meeting where it will consider or act on such an assessment.⁴

2C. The reserve regime, the regulatory overlay, and variation

Nevada's reserve regime rests on two statutes working together. NRS 116.31152 requires the executive board to commission a reserve study at least once every five years covering the major components the association must maintain, repair, replace, or restore; to review the study results at least annually to determine whether reserves are sufficient; and to make at least annual adjustments to the funding plan.³ The board must also submit a summary of the study to the Real Estate Division no later than 45 days after adopting the results.³ NRS 116.3115 supplies the funding requirement: the association must establish adequate reserves, funded on a reasonable basis, for the repair, replacement, and restoration of major components, and it may use reserve funds only for those purposes — not for daily maintenance.⁴ Reserve information must accompany the budget summary, which is why the summary's reserve-procedure and study-qualification disclosures matter at ratification.² This is current law, verified against the chapter's text. Nevada is neither a "no reserve mandate" state nor one that prescribes a single funding percentage.

The regulatory overlay is real, but it does not approve budgets. The Commission for Common-Interest Communities and Condominium Hotels handles rulemaking and discipline; the Office of the Ombudsman assists owners and boards and helps process disputes.^{7, 8} Most governing-document disputes — including disputes over procedures for increasing or imposing assessments — must go through the mandatory alternative-dispute-resolution process before a civil action can begin.⁹ Nevada also requires community managers to hold a certificate and licenses them through NRS chapter 116A.¹⁰ None of these mechanisms ratifies, approves, or sets a budget.

On variation: the chapter's provisions generally may not be waived or varied by agreement except as the chapter expressly allows.⁶ The budget statutes leave specific room for the declaration — the rejection threshold may be set higher than a simple majority, and the declaration may impose more stringent standards on the budget.^{2, 4} Many Nevada associations organize under the state's nonprofit corporation law, NRS chapter 82, which supplies corporate formalities but no budget-approval threshold; where it conflicts, NRS chapter 116 prevails.¹¹ NRS chapter 116B governs condominium hotels and is not the main HOA statute.¹

Section 3: Budget-adjacent obligations

A. Reserves in the budget

The reserve-study requirement (NRS 116.31152) and the reserve-funding requirement (NRS 116.3115(2)(b)) are mandatory and feed directly into the budget: the annual budget must include a reserve component, and the board may impose necessary and reasonable reserve assessments — based on the study — without owner approval.^{3, 4}

B. Special assessments

NRS 116 sets no general owner-approval threshold for special assessments. Reserve-funding assessments may be imposed by the board without owner approval when those assessments rest on the reserve study. A capital-improvement assessment requires at least 21 calendar days' written notice of the meeting where the board considers or acts on it. All other special-assessment approval rules come from the recorded declaration.⁴

C. Assessment increase limits

NRS 116 sets no statutory percentage cap on assessment increases. The negative-option ratification mechanism is the statutory check: an increased budget takes effect unless a majority of all owners reject it, and any rate limit beyond that comes from the declaration.^{2, 4}

D. Financial review, audit, and disclosure tied to the budget cycle

NRS 116.31144 ties an annual financial review or audit to the size of the budget: a review if the budget runs $45,000 to under $75,000 (in the year before a reserve study) or $75,000 to under $150,000 (annually); an audit if the budget reaches $150,000 or more (annually).⁵ NRS 116.31142 directs the Commission to set the form and content of association financial statements.¹² These obligations are mandatory and scale with the budget; they do not change the ratification mechanism.

Section 4: Recent legislative and judicial activity

A. Recent bills

The 83rd Legislature — Nevada's 2025 regular session — passed several bills amending NRS chapter 116. None of them touched the negative-option budget-ratification mechanism, the rejection threshold, or the reserve-study cycle. For budget-adjacent practice, the one that matters most is Assembly Bill 396.

B. Recent appellate rulings

A review of the Nevada appellate courts turned up no published Nevada Supreme Court or Court of Appeals opinion decided in the past 36 months that squarely interprets the budget-ratification, reserve, or assessment-levying provisions of NRS 116.31151, 116.31152, or 116.3115. The opinions issued in that window address HOA foreclosure and super-priority-lien questions, which belong to the collections-and-liens topic and fall outside the scope of this page. Trial-level disputes proceed through the Nevada District Courts; appeals go to the Nevada Supreme Court, which under a deflection model may retain a case or assign it to the Nevada Court of Appeals, established in 2014.¹⁴

C. Active legislative debates

Legislative interest in tighter reserve oversight continues. Senate Bill 56, a 2025 proposal to require annual reserve studies rather than the current five-year cycle, did not pass in the 83rd session. Reform of the mandatory alternative-dispute-resolution process — including proposals for a more homeowner-accessible referee program — also remains an active subject of debate.

Section 5: National positioning and related coverage

Nevada stands among a small group of states that adopted the Uniform Common Interest Ownership Act — alongside Alaska, Colorado, Connecticut, Delaware, and Minnesota — and it shares the UCIOA negative-option budget mechanism under which owners must affirmatively reject a board-adopted budget or it passes.¹⁶ Nevada adopted the 1982 version of the uniform act, placing it in the same cohort as Alaska, Colorado, Minnesota, and West Virginia, while Connecticut and Delaware later adopted the 2008 version.¹⁶ What sets Nevada apart among UCIOA states is the combination of a prescriptive statutory reserve regime — a five-year reserve-study cycle with annual review and an adequate-funding requirement — and an active regulatory overlay built around the Commission, the Ombudsman, mandatory dispute resolution, and community-manager licensing. That makes Nevada more prescriptive than most UCIOA states, distinct from California's assessment-increase-cap model and from CC&R-only states that leave budget approval entirely to the declaration. For a multi-state operator entering Nevada, the practical implication is clear: the negative-option mechanism governs the budget itself, but the reserve-study and reserve-funding requirements and the regulatory overlay add compliance obligations that lighter-touch jurisdictions do not impose.

HOA Weekly updates this Nevada budget approval coverage quarterly as the Legislature, the Commission, and the Nevada courts act. Federal frameworks — including the Fair Housing Act, the Americans with Disabilities Act, the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the OTARD rule — apply to Nevada associations regardless of the state budget framework.

1. NRS chapter 116, Common-Interest Ownership (Uniform Act), Nevada Legislature ↩
2. NRS 116.31151, Annual distribution to units' owners of operating and reserve budgets or summaries; ratification of budget, Nevada Legislature ↩
3. NRS 116.31152, Study of reserves; duties of executive board; submission of summary of study to Division, Nevada Legislature ↩
4. NRS 116.3115, Assessments for common expenses; funding of adequate reserves; notice of meetings regarding assessments for capital improvements, Nevada Legislature ↩
5. NRS 116.31144, Audit and review of financial statements, Nevada Legislature ↩
6. NRS 116.1104, Provisions of chapter may not be varied by agreement, waived or evaded; exceptions, Nevada Legislature ↩
7. NRS 116.600, Commission for Common-Interest Communities and Condominium Hotels: Creation, Nevada Legislature ↩
8. NRS 116.625, Office of the Ombudsman for Owners in Common-Interest Communities and Condominium Hotels, Nevada Legislature ↩
9. NRS 38.310, Limitations on commencement of certain civil actions (mandatory ADR for common-interest community disputes), Nevada Legislature ↩
10. NRS chapter 116A, Common-Interest Communities: Regulation of Community Managers and Other Personnel, Nevada Legislature ↩
11. NRS 116.11085, Provisions of chapter prevail over conflicting provisions governing certain business entities generally (NRS chapter 82 nonprofit corporations), Nevada Legislature ↩
12. NRS 116.31142, Preparation and presentation of financial statements, Nevada Legislature ↩
13. Assembly Bill 396 (2025, 83rd Session), Nevada Legislature; see also Nevada Real Estate Division 83rd Legislative Session summary, red.nv.gov ↩
14. About the Court of Appeals (deflection model; Court established 2014), Nevada Judiciary (nvcourts.gov) ↩
15. Senate Bill 56 (proposal to require annual reserve studies; did not pass), Nevada Legislature NELIS ↩
16. Uniform Common Interest Ownership Act: 1982-version states (Alaska, Colorado, Minnesota, Nevada, West Virginia) and 2008-version states (Connecticut, Delaware, Vermont, Washington), Community Associations Institute ↩