Nevada HOA Reserve Studies

Section 1: Overview — Reserve study requirements in Nevada

Nevada asks more of its homeowners associations than most states do. It requires a reserve study built on a physical inspection of the major components, it sets that study on a fixed cycle, it demands an annual review of whether the reserves are adequate, and it requires associations to actually fund those reserves — all of it backed by one of the strongest regulatory structures in the country. The executive board of a common-interest community must cause a reserve study at least once every five years, review the results at least once a year to decide whether the reserves are sufficient, and adjust the funding plan when the numbers say it needs adjusting.¹ These duties live in the Nevada Common-Interest Ownership Act, NRS Chapter 116 — Nevada's heavily amended version of the Uniform Common-Interest Ownership Act — which generally governs communities created on or after January 1, 1992.^2,13 A person holding a reserve-study-specialist permit (registration) from the Real Estate Division must prepare the study, and community managers must hold a certificate from the same agency.^5,14 Nevada runs this system through a distinctive apparatus: the Real Estate Division of the Department of Business and Industry, the Commission for Common-Interest Communities and Condominium Hotels, and the Office of the Ombudsman for Owners in Common-Interest Communities and Condominium Hotels.^15,16 Put those pieces together — a fixed study cycle, a physical-inspection basis, a mandatory funding obligation, a licensed preparer, and a dedicated commission — and Nevada lands among the strongest reserve-mandate states, alongside California and Florida. The sections that follow lay out the statutory mechanics, the regulatory framework, and the compliance obligations in detail.

Section 2: The reserve framework under Nevada law

2A. The reserve-study and funding mandate

The central provision is NRS 116.31152, and it puts three duties on the executive board. First, at least once every five years, the board must cause a study of the reserves needed to repair, replace, and restore the major components of the common elements — and any other portion the association must maintain.¹ Second, at least once a year, the board must review the results of that study to decide whether the reserves are sufficient.¹ Third, at least once a year, the board must make whatever adjustments to the funding plan it judges necessary to keep the funding adequate.¹ This is not a paper exercise. By regulation, the five-year period for the study starts on the day someone performs the on-site inspection, so a remote financial update on its own does not reset the clock.⁴ The study itself rests on a physical examination of the components, backed by a component inventory, remaining-useful-life estimates, and a 30-year funding projection.⁷

The funding obligation stands separately, and it is mandatory. Under NRS 116.3115, the association "shall establish adequate reserves, funded on a reasonable basis, for the repair, replacement and restoration of the major components."⁶ Nevada is a funding state, then, not a disclosure-only state. The statute names no single numeric percentage; instead, the regulation defines "adequately funded reserves" as funds sufficient to maintain the common elements at the level the governing documents and reserve study describe, without dipping into operating accounts or turning to special or reserve assessments, except for unforeseen catastrophic events.⁷ To hit that standard, the board may impose necessary and reasonable assessments without owner approval, and any such assessment must rest on the reserve study conducted under NRS 116.31152.⁶ In other words, owners cannot vote down adequacy itself.

The preparer must be qualified by statute. A person may not act as a reserve study specialist without registering with the Real Estate Division, and the reserve-study-specialist permit (registration) issues under NRS Chapter 116A.⁵ The Division keeps a public list of registered specialists, who must disclose their qualifications, any conflicts of interest, and proof of professional liability insurance.¹⁷ One narrow exception applies: if a community has 20 or fewer units and sits in a county with a population under 55,000, the board may use any person it considers qualified.¹ Disclosure runs to owners and buyers alike. The board distributes the annual operating and reserve budgets (or summaries) to owners under NRS 116.31151, and the resale package must carry a summary of the reserve study, with the underlying information, under NRS 116.4109; the full study must be made reasonably available on request.^8,9 The board must also submit a summary of each adopted study to the Division within 45 days after it adopts the results.¹

2B. NRS Chapter 116, the regulatory apparatus, and ADR

NRS Chapter 116, the Common-Interest Ownership (Uniform Act), reaches every common-interest community created within Nevada, subject to limited exceptions.^2,13 Communities created before January 1, 1992 fall under the chapter only in part, and small planned communities of 12 or fewer units that are not subject to developmental rights sit largely outside the chapter unless their declaration says otherwise.^2,3 An older condominium statute, NRS Chapter 117, dates to 1963 and may touch certain older projects, though NRS 116.1201 provides that Chapters 117 and 278A do not apply to common-interest communities governed by Chapter 116.^2,18

The regulatory apparatus is unusually strong. The Real Estate Division of the Department of Business and Industry administers the chapter. The Commission for Common-Interest Communities and Condominium Hotels — a seven-member, governor-appointed body made up of unit owners, a CIC developer, a certificate-holding community manager, a certified public accountant, and an attorney, with at least four members residing in a county whose population is 700,000 or more — adopts regulations and conducts disciplinary hearings. The Office of the Ombudsman assists owners and boards and helps process disputes.^15,16 Community managers must hold a certificate from the Division, and reserve study specialists must register with it, so the law treats both the management and the reserve-preparation functions as licensed activities.^5,14 Many disputes over the interpretation, application, or enforcement of governing documents must go to mediation or arbitration through a Division-connected program before litigation, under NRS 38.300 to 38.360.¹² That requirement matters for enforcement, because owners and associations often have to attempt ADR before a reserve-related governance dispute reaches court. Nevada's reserve provisions run past the base model act: the Uniform Common-Interest Ownership Act does not itself require a five-year physically inspected study, a licensed preparer, and an enforceable funding standard — Nevada added all three through amendment and regulation.

2C. The declaration, corporate law, and fiduciary backstop

Statutory reserve requirements operate alongside each community's recorded declaration — the CC&Rs — and its bylaws. The declaration may set reserve or budget standards more stringent than the statute, and NRS 116.3115 expressly contemplates that the budget must meet the chapter's requirements unless the declaration demands more.⁶ Where a governing-document provision conflicts with Chapter 116, the statute controls, and the law deems the offending provision to conform.² At the entity level, Nevada associations generally organize as nonprofit corporations under NRS Chapter 82, which supplies the corporate governance rules that operate beneath the HOA-specific chapter.¹⁹ Board members owe fiduciary duties: under NRS 116.3103, officers and members of the executive board are fiduciaries who must act on an informed basis, in good faith, and with the ordinary and reasonable care of directors of a nonprofit corporation, subject to the business-judgment rule.²⁰ The practical implication is direct. In Nevada, a reserve study, the five-year updates, the annual adequacy review, and reserve funding are not best practices — they are statutory obligations, enforced through a dedicated regulatory apparatus and reinforced by the board's fiduciary duty.

Section 3: Compliance obligations

A. Study and inspection obligations

The executive board must cause a reserve study at least once every five years (mandatory, NRS 116.31152).¹ Each study must rest on a physical, on-site inspection of the major components, and the five-year clock resets on the inspection date (mandatory, NRS 116.31152 and NAC 116.427).^1,4 The board must review the most recent study at least once a year to confirm the reserves remain sufficient (mandatory, NRS 116.31152).¹ A registered reserve study specialist must prepare the study, except under the small-rural-community exception (mandatory, NRS 116A.420 and NRS 116.31152).^1,5 The board must file a summary of each adopted study with the Real Estate Division within 45 days of adoption (mandatory, NRS 116.31152).¹

B. Funding obligations

The association must establish and maintain adequate reserves, funded on a reasonable basis, for repair, replacement, and restoration of the major components (mandatory, NRS 116.3115).⁶ The funding standard is the regulatory "adequately funded reserves" test, measured against the governing documents and the reserve study and built to keep the association off its operating funds and away from special assessments (NAC 116.425).⁷ To carry out a funding plan, the board may impose necessary and reasonable assessments based on the study, without owner approval (NRS 116.3115).⁶

C. Disclosure obligations

The board must distribute the annual operating and reserve budgets (or summaries) to owners, including a statement of the reserve-funding procedures and the preparer's qualifications (mandatory, NRS 116.31151).⁸ The resale package a seller furnishes to a buyer must include a summary of the reserve study, and the full study must be made reasonably available for inspection on request (mandatory, NRS 116.4109).⁹

D. Account and governance obligations

The board may use reserve funds only for the purposes the reserve study identifies, and withdrawals of certain association funds require designated signatures (mandatory, NRS 116.31153).¹⁰ Board members must discharge the reserve duties consistent with their fiduciary obligations and the business-judgment rule (NRS 116.3103).²⁰ The Real Estate Division may investigate, and the Commission may impose discipline, cease-and-desist orders, and administrative fines for violations (NRS 116.785); many disputes must first move through ADR under NRS 38.300 to 38.360.^11,12

Section 4: Recent legislative and judicial activity

A. Recent bills

No bill enacted in the 2025 session changed the reserve-study cycle, the physical-inspection requirement, or the funding obligation. Lawmakers discussed a measure to require annual rather than five-year studies, but they did not enact it. The fingerprint and FBI background-check requirement for community managers and reserve study specialists (NRS 116A.432) traces back to Assembly Bill 31 of the 2019 session, not to any recent bill.²²

B. Recent rulings

No Nevada Supreme Court or Nevada Court of Appeals opinion in the past 36 months squarely addresses reserve studies, reserve-funding adequacy, or board fiduciary duty in the reserve setting under NRS 116.31152 or 116.3115. Statute and regulation still govern reserve obligations, with no controlling recent appellate decision on point. Trial-level disputes move through the Nevada District Courts; appeals go to the Nevada Supreme Court, which — under the deflective, or "push-down," model voters created when they approved the Nevada Court of Appeals in 2014 — may hand certain matters to the three-judge Court of Appeals.²³

C. Active legislative debates

Legislative attention has centered on whether to tighten the reserve-study frequency, along with broader questions about HOA governance, fees, and disclosure. Proposals to shorten the study cycle have come up, but none has passed. Boards should watch each odd-year regular session and Commission rulemaking, because the field widely treats the five-year cycle as a floor rather than a ceiling.

Section 5: National positioning and related coverage

Nevada belongs to the small group of states with a genuine reserve-funding mandate, not a disclosure-only or no-mandate regime. It stands alongside California, which under Civil Code § 5550 requires the board to cause a "reasonably competent and diligent visual inspection of the accessible areas of the major components" at least once every three years and to review the study every year, and Florida, which under Senate Bill 4-D (signed May 26, 2022) requires a structural integrity reserve study every 10 years for each building three stories or higher and required associations existing on or before July 1, 2022 to finish the initial study by December 31, 2024.^24,25 Like those states, Nevada mandates a physically inspected study, periodic updates, and real funding; unlike most states, it adds a dedicated regulatory layer. What sets Nevada apart is the combination of the Commission for Common-Interest Communities and Condominium Hotels, the Office of the Ombudsman, mandatory community-manager licensing, and the reserve-study-specialist permit.^5,15,16 For a multi-state operator entering Nevada, the practical point is plain: commissioning just any reserve study does not satisfy the law. The preparer must hold a Nevada reserve-study-specialist registration, the managing agent must hold a Nevada community-manager certificate, and the association must fund to the statutory adequacy standard — not merely disclose where its reserves stand.

HOA Weekly's Nevada Reserve Studies coverage updates quarterly as the Legislature, the Commission for Common-Interest Communities, and the Nevada appellate courts act. Federal frameworks — including the FHA, ADA, FDCPA, SCRA, and OTARD — also apply to Nevada associations regardless of the state framework.

1. Nev. Rev. Stat. § 116.31152 (study of reserves), Nevada Legislature ↩
2. Nev. Rev. Stat. § 116.1201 (applicability; regulations), Nevada Legislature ↩
3. Nev. Rev. Stat. § 116.1203 (exception for small planned communities), Nevada Legislature ↩
4. Nev. Admin. Code § 116.427 (commencement of five-year period on date of on-site inspection), Nevada Legislature ↩
5. Nev. Rev. Stat. § 116A.420 (registration required to act as reserve study specialist), Nevada Legislature ↩
6. Nev. Rev. Stat. § 116.3115 (assessments for common expenses; funding of adequate reserves), Nevada Legislature ↩
7. Nev. Admin. Code § 116.425 (reserve study contents; "adequately funded reserves"), Nevada Legislature ↩
8. Nev. Rev. Stat. § 116.31151 (annual distribution of operating and reserve budgets), Nevada Legislature ↩
9. Nev. Rev. Stat. § 116.4109 (resales of units), Nevada Legislature ↩
10. Nev. Rev. Stat. § 116.31153 (signatures required for withdrawals of certain association funds), Nevada Legislature ↩
11. Nev. Rev. Stat. § 116.785 (remedial and disciplinary action by the Commission), Nevada Legislature ↩
12. Nev. Rev. Stat. §§ 38.300–38.360 (alternative dispute resolution for common-interest communities), Nevada Legislature ↩
13. Nev. Rev. Stat. § 116.001 (short title; Common-Interest Ownership (Uniform Act)), Nevada Legislature ↩
14. Nev. Rev. Stat. § 116A.400 (certificate required to act as community manager), Nevada Legislature ↩
15. Commission for Common-Interest Communities and Condominium Hotels (Nev. Rev. Stat. § 116.600), Nevada Real Estate Division ↩
16. Nev. Rev. Stat. § 116.625 (Ombudsman for Owners in Common-Interest Communities and Condominium Hotels), Nevada Legislature ↩
17. Understanding Reserve Studies, Nevada Real Estate Division ↩
18. Nev. Rev. Stat. ch. 117 (Condominiums), Nevada Legislature ↩
19. Nev. Rev. Stat. ch. 82 (Nonprofit Corporations), Nevada Legislature ↩
20. Nev. Rev. Stat. § 116.3103 (power of executive board; members and officers are fiduciaries), Nevada Legislature ↩
21. Assemb. B. 396, 83rd Sess. (Nev. 2025), Nevada Legislature ↩
22. Assemb. B. 31, 80th Sess. (Nev. 2019) (fingerprint requirement; Nev. Rev. Stat. § 116A.432), Nevada Legislature ↩
23. About the Court of Appeals (deflective model), Nevada Judiciary ↩
24. Cal. Civ. Code § 5550 (reserve study requirement), California Legislative Information ↩
25. Fla. S.B. 4-D (2022) (structural integrity reserve studies), Florida Senate ↩