AB 313 — Revises various provisions governing common-interest communities and condominium hotels. (BDR 10-228)

An association shall not adopt any rule or regulation that has the effect of prohibiting or unreasonably interfering with a candidate in the candidate’s campaign for election as a member of the executive board, except that the candidate’s campaign may be - *AB313_R1* – 8 – limited to 90 days before the date that ballots are required to be returned to the association.

- *AB313* – 8 – (1) A list of the mailing address of each unit, which must not include the names of the units’ owners or the name of any tenant of a unit’s owner;

 The information provided pursuant to this paragraph must not include the name of any unit’s owner or any tenant of a unit’s - *AB313_R1* – 9 – owner.

The Administrator may require the association to submit a copy of the certification of each member of the executive board of - *AB313* – 9 – that association at the time the association registers with the Ombudsman pursuant to NRS 116.31158.

(1) The secret [written] ballots for the removal election must be [sent] mailed, provided or made available in the manner required - *AB313_R1* – 10 – by this section not less than 15 days or more than 60 days after the date on which the petition is received;received .

and[; (2) The executive board shall set the date for the meeting to open and count the secret [written] ballots physically received by the association and to review, announce and enter into the record the results of the secret ballots received by the association by electronic means so that the meeting is held not more than 15 days after the deadline for returning the secret [written] ballots by physical or electronic means and not later than 90 days after the date on which the petition was received.

and] (2) The executive board shall set the date for the meeting to open and count the secret [written] ballots physically received by the association and to review, announce and enter into the record the results of the secret ballots received by the association by electronic means so that the meeting is held not more than 15 days after the deadline for returning the secret [written] ballots by physical or electronic means and not later than 90 days after the date on which the petition was received.

(3) Upon written request submitted to the community manager, president or secretary of the association by a member of the executive board who is the subject of the removal election, the secretary or other officer specified in the bylaws of the association shall cause notice of a meeting of the executive board to be given to the units’ owners not later than 5 days after receipt of the written request.

The notice must include the date, time and location of the meeting, as requested by the member of the executive board who is the subject of the removal election, and identify the removal of the member from the executive board as an agenda item listed for discussion.

A meeting requested pursuant to this subparagraph must occur before the date for the meeting set by the executive board pursuant to subparagraph (2).

- *AB313* – 10 – 3.

Except as otherwise provided in NRS 116.311 or 116.31105, the removal of any member of the executive board must be conducted by secret [written] ballot in the following manner:

or - *AB313_R1* – 11 – (2) If an electronic ballot is provided, shall provide the ballot or make the ballot available by electronic means to each unit’s owner.

Unless prohibited or limited by the declaration or bylaws and except as otherwise provided in this section, units’ owners may vote at a meeting in person, by absentee ballot pursuant to paragraph (d) of subsection 2, by a proxy pursuant to - *AB313* – 11 – subsections 3 to 8, inclusive, or, when a vote is conducted without a meeting, by electronic or paper ballot pursuant to subsection 9.

If more than one of the owners are present, the votes allocated to that unit may be - *AB313_R1* – 12 – cast only in accordance with the agreement of a majority in interest of the owners, unless the declaration expressly provides otherwise.

- *AB313* – 12 – (c) The proxy must designate the meeting for which it is executed, and such a designation includes any recessed session of that meeting.

If the proxy designates one or more specific items on the agenda of the meeting for which the unit’s owner has executed the proxy, the proxy must indicate, for each specific item - *AB313_R1* – 13 – designated in the proxy, whether the holder of the proxy must cast a vote in the affirmative or the negative on behalf of the unit’s owner.

- *AB313* – 13 – (a) The association shall notify the units’ owners that the vote will be taken by ballot.

(b) The association shall deliver a paper or electronic ballot to every unit’s owner entitled to vote on the matter.matter [.] and may allow the units’ owners to vote by using a voting machine.

Any such voting machine must be a mechanical voting system that has been approved by the Secretary of State in accordance with chapter 293B of NRS and, once voting begins, must be available for use between the hours of 8 a.m.

and 8 p.m.

each day for a period of 15 consecutive days.

- *AB313_R1* – 14 – (d) When the association delivers the ballots, it shall also:

(g) If the vote is for the election or removal of a member of the executive board and the association allows the use of electronic voting:

(1) Upon the request of a unit’s owner, an association shall provide a form to the unit’s owner that allows the unit’s owner to opt out of receiving electronic ballots.

(2) If a unit’s owner has not given the association an electronic mail address or has opted out of using electronic ballots by returning to the association the form provided pursuant to subparagraph (1) at any time not less than 5 days before the date of the meeting when the votes will be counted, the association shall send a paper ballot and a return envelope, prepaid by United States mail, to the mailing address of the unit’s owner or to any other mailing address designated in writing by the unit’s owner.

(3) If the association allows units’ owners to vote by using a voting machine, the association must provide to each unit’s owner, not less than 15 days before the date on which voting begins, a notice of the opportunity to vote by using a voting machine that provides the location at which the voting machine will be available for use and the days and times during which the voting machine will be available for use.

The association shall also provide with the notice a form that allows a unit’s owner to opt out of voting by using a voting machine and instead receive a paper ballot.

If a unit’s owner returns the form to the association within 15 days after receiving the notice, the association shall send a paper ballot and a return envelope, prepaid by United States mail, to the - *AB313_R1* – 15 – mailing address of the unit’s owner or to any other mailing address designated in writing by the unit’s owner.

(4) A meeting of the units’ owners must be held in the manner set forth in NRS 116.31034 or 116.31036 to open and count the paper ballots and review and announce the results obtained from the electronic ballots or voting machine, as applicable, and enter the results into the meeting record.

Any paper ballots must be opened and counted in a manner that may be readily observed by the units’ owners in attendance at the meeting and must not occur privately behind closed doors or in an area that is not open to observation by the units’ owners in attendance.

(5) Any electronic voting must be conducted by an independent third-party through the use of an online voting system, a voting machine, or both an online voting system and a voting machine.

The independent third-party shall be deemed to be a data collector pursuant to NRS 603A.030 and is subject to the obligations and liabilities of chapter 603A of NRS with regard to the security and privacy of any personal information, as that term is defined in NRS 603A.040, that is provided or maintained through the use of an online voting system or voting machine.

The independent third-party conducting the electronic voting may not be any of the following persons and may not share voting results or information with any of the following persons before the meeting held pursuant to subparagraph (4):

(I) A candidate for or member of the executive board or an officer of the association;

(II) A person who resides in a unit with, is married to, is domestic partners with, or is related by blood, adoption or marriage within the third degree of consanguinity or affinity to another person who is a member of the executive board or an officer of the association or performs the duties of a community manager for the association;

(III) An officer, employee, agent or director of a corporate owner of a unit, a trustee or designated beneficiary of a trust that owns a unit, a partner of a partnership that owns a unit, a member or manager of a limited-liability company that owns a unit or a fiduciary of an estate that owns a unit if the unit is also owned by another person who is a member of the executive board or an officer of the association or serves as the community manager for the association;

(IV) A person who performs the duties of a community manager for the association, an affiliate of the community manager, an employee of the company by whom the community manager is employed or an affiliate of the company, - *AB313_R1* – 16 – the spouse of any such person or the parent or child of any such person by blood, adoption or marriage;

(V) The declarant of the association or an affiliate of the declarant;

(VI) A unit’s owner or resident of the association;

or (VII) Any person who stands to gain any personal profit or compensation of any kind from a matter before the executive board of the association other than payment only for conducting voting services for the association.

12.

As used in this section, “online voting system” means an Internet-based voting system with a process that has the ability:

(a) To authenticate:

(1) The identity of a unit’s owner;

and (2) The validity of each electronic vote to ensure that the vote is not altered in transit;

(b) To enable a unit’s owner to transmit an electronic ballot to the online voting system in a way that ensures the secrecy and integrity of the ballot;

(c) To transmit an electronic receipt to each unit’s owner who casts an electronic vote;

(d) To separate any authenticating or identifying information from an electronic ballot, thereby rendering it impossible to match an electronic ballot to a specific unit’s owner;

(e) To store electronic votes and keep them accessible to units’ owners and the Office of the Ombudsman for the purposes of recounts, inspections and reviews;

(f) To count all lawful votes;

and - *AB313_R1* – 17 – (g) To identify, reject and record the basis for rejection of all unlawful votes, including, without limitation, a vote by a unit’s owner whose voting rights have been suspended, a vote by a person who is not a unit’s owner and duplicate votes.

Except as otherwise provided in subsection 8, if the declaration so provides, in a common-interest community that - *AB313* – 14 – consists of at least 1,000 units, the voting rights of the units’ owners in the association for that common-interest community may be exercised by delegates or representatives except that, in the election or removal of a member of the executive board, the voting rights of the units’ owners may not be exercised by delegates or representatives.

(1) If a paper ballot is provided, shall send the ballot and a return envelope , [to be sent,] prepaid by United States mail, to the mailing address of each unit within the common-interest community - *AB313_R1* – 18 – or to any other mailing address designated in writing by the unit’s owner [.] ;

(b) Each unit’s owner must be provided with at least 15 days after the date the secret [written] ballot is mailed , provided or made - *AB313* – 15 – available to the unit’s owner to return the secret [written] ballot to the association [.] by physical or electronic means.

NRS(Deleted 116.3113by isamendment.) hereby- amended*AB313_R1* to– read19 as– follows:Sec.

116.3113 1.

Commencing not later than the time of the first conveyance of a unit to a person other than a declarant, the association shall maintain, to the extent reasonably available and subject to reasonable deductibles, all of the following:

(a) Property insurance on the common elements and, in a planned community, also on property that must become common elements, insuring against risks of direct physical loss commonly - *AB313* – 16 – insured against, which insurance, after application of any deductibles, must be not less than 80 percent of the actual cash value of the insured property at the time the insurance is purchased and at each renewal date, exclusive of land, excavations, foundations and other items normally excluded from property policies.

(b) Commercial general liability insurance, including insurance for medical payments, in an amount determined by the executive board but not less than any amount specified in the declaration, covering all occurrences commonly insured against for bodily injury and property damage arising out of or in connection with the use, ownership, or maintenance of the common elements and, in cooperatives, also of all units.

(c) Crime insurance which includes coverage for dishonest acts by members of the executive board and the officers, employees, agents, directors and volunteers of the association and which extends coverage to any business entity that acts as the community manager of the association and the employees of that entity.

Such insurance may not contain a conviction requirement, and the minimum amount of the policy must be not less than an amount equal to 3 months of aggregate assessments on all units plus reserve funds or $5,000,000, whichever is less.

(d) Directors and officers insurance that is a nonprofit organization errors and omissions policy in a minimum aggregate amount of not less than $1,000,000 naming the association as the owner and the named insured.

The coverage must extend to the members of the executive board and the officers, employees, agents, directors and volunteers of the association and to the community manager of the association and any employees thereof while acting as agents as insured persons under the policy terms.

Coverage must be subject to the terms listed in the declaration.

2.

In the case of a building that contains units divided by horizontal boundaries described in the declaration, or vertical boundaries that comprise common walls between units, the insurance maintained under paragraph (a) of subsection 1, to the extent reasonably available, must include the units, but need not include improvements and betterments installed by units’ owners.

3.

If the executive board determines that the cause of any loss to any portion of a common-interest community that is covered by insurance maintained pursuant to paragraph (a) of subsection 1 originated from a unit and the association has provided the unit’s owner with notice and an opportunity for a hearing in the manner provided in NRS 116.31031, the unit’s owner is responsible for the cost of the deductible for such insurance, in an amount not to exceed $50,000.

The association may adopt and establish written, nondiscriminatory policies and procedures relating to the - *AB313* – 17 – submission of claims, responsibility for deductibles and any other matters relating to the adjustment of claims.

4.

If the insurance described in subsections 1 and 2 is not reasonably available, the association promptly shall cause notice of that fact to be given to all units’ owners.

The declaration may require the association to carry any other insurance, and the association may carry any other insurance it considers appropriate to protect the association or the units’ owners.

[4.] 5.

An insurance policy issued to the association does not prevent a unit’s owner from obtaining insurance for the unit’s owner’s own benefit.

Sec.

NRS(Deleted 116.31133by isamendment.) herebySec. amended to read as follows:

116.31133 1.

Insurance policies carried pursuant to NRS 116.3113 must provide that:

(a) Each unit’s owner is an insured person under the policy with respect to liability arising out of the unit’s owner’s interest in the common elements or membership in the association;

(b) [The] Except as otherwise provided in subsection 3 of NRS 116.3113, the insurer waives its right to subrogation under the policy against any unit’s owner or member of his or her household;

(c) No act or omission by any unit’s owner, unless acting within the scope of his or her authority on behalf of the association, voids the policy or is a condition to recovery under the policy;

and (d) If, at the time of a loss under the policy, there is other insurance in the name of a unit’s owner covering the same risk covered by the policy, the association’s policy provides primary insurance.

2.

Any loss covered by the property policy under subsections 1 and 2 of NRS 116.3113 must be adjusted with the association, but the proceeds for that loss are payable to any insurance trustee designated for that purpose, or otherwise to the association, and not to any holder of a security interest.

The insurance trustee or the association shall hold any insurance proceeds in trust for the association, units’ owners and lienholders as their interests may appear.

Subject to NRS 116.31135, the proceeds must be disbursed first for the repair or restoration of the damaged property, and the association, units’ owners, and lienholders are not entitled to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the property has been completely repaired or restored, or the common-interest community is terminated.

3.

An insurer that has issued an insurance policy under this section shall issue certificates or memoranda of insurance to the association and, upon written request, to any unit’s owner or holder of a security interest.

The insurer issuing the policy may not cancel or refuse to renew it until 30 days after notice of the proposed - *AB313* – 18 – cancellation or nonrenewal has been mailed to the association, each unit’s owner and each holder of a security interest to whom a certificate or memorandum of insurance has been issued at their respective last known addresses.

Sec.

(e) Make automatic payments for loansany obtainedservices into compliancethe withassociation paragraphthat (p)are ofbilled subsectionon 1a ofmonthly NRSbasis; 116.3102 and the governing documents;

(f) Make automaticannual payments for any services to the associationOffice thatof arethe billedOmbudsman; on a monthly basis;

- *AB313* – 19 – (b) The executive board has expressly authorized the electronic transfer of money;

- *AB313_R1* – 20 – 5.

(1) A requirement that the community manager or his or her employer shall maintain insurance covering liability for errors or omissions, professional liability or a surety bond to compensate for - *AB313* – 20 – losses actionable pursuant to this chapter in an amount of $1,000,000 or more;

- *AB313_R1* – 21 – (l) Include provisions for dispute resolution;

[Except] Until the regulations adopted by the Commission pursuant to subsection 8 become effective, and except as otherwise provided in the management agreement, upon the termination or - *AB313* – 21 – assignment of a management agreement, the community manager shall, within 30 days after the termination or assignment, transfer possession of all books, records and other papers of the client to the succeeding community manager, or to the client if there is no succeeding community manager, regardless of any unpaid fees or charges to the community manager or management company.

- *AB313_R1* – 22 – 7.

- *AB313* – 22 – (j) Include provisions relating to the grounds and procedures for termination of the community manager;

(1) A requirement that the community manager or his or her employer shall maintain insurance covering liability for errors or - *AB313_R1* – 23 – omissions, professional liability or a surety bond to compensate for losses actionable pursuant to this chapter in an amount of $1,000,000 or more;

- *AB313* – 23 – 5.

[Until the regulations adopted by the Commission pursuant to subsection 8 become effective, and except as otherwise provided - *AB313_R1* – 24 – in the management agreement, upon the termination or assignment of a management agreement, the community manager shall, within 30 days after the termination or assignment, transfer possession of all books, records and other papers of the client to the succeeding community manager, or to the client if there is no succeeding community manager, regardless of any unpaid fees or charges to the community manager or management company.

9.2.

NRS 116B.445 is hereby amended to read as follows:

116B.445 1.

Not later than the termination of any period of declarant’s control, the units’ owners shall elect an executive board of at least three members.

At least a majority of the members of the executive board must be residential unit owners and at least one member of the executive board must be a duly authorized representative of the hotel unit owner.

The executive board shall elect the officers of the association.

The members of the executive board and the officers of the association shall take office upon election.

2.

The term of office of a member of the executive board may not exceed 3 years, except for members who are appointed by the declarant or the hotel unit owner.

Unless the governing documents provide otherwise, there is no limitation on the number of terms that a person may serve as a member of the executive board.

3.

The governing documents of the association must provide for terms of office that are staggered in such a manner that, to the extent possible, an equal number of members of the executive board are elected at each election.

The provisions of this subsection do not apply to:

(a) Members of the executive board who are appointed by the declarant;

(b) Members of the executive board who are appointed by the hotel unit owner;

and (c) Members of the executive board who serve a term of 1 year or less.

4.

Not less than 30 days before the preparation of a ballot for the election of members of the executive board, the secretary or other officer specified in the bylaws of the association shall cause - *AB313_R1* – 25 – notice to be given to each unit’s owner of his or her eligibility to serve as a member of the executive board.

Each unit’s owner who is qualified to serve as a member of the executive board may have his or her name placed on the ballot along with the names of the nominees selected by the members of the executive board or a nominating committee established by the association.

5.

Each person whose name is placed on the ballot as a candidate for a member of the executive board must:

(a) Make a good faith effort to disclose any financial, business, professional or personal relationship or interest that would result or would appear to a reasonable person to result in a potential conflict of interest for the candidate if the candidate were to be elected to serve as a member of the executive board;

and (b) Disclose whether the candidate is a member in good standing.

For the purposes of this paragraph, a candidate shall not be deemed to be in “good standing” if the candidate has any unpaid and past due assessments or charges that are required to be paid to the association.

 The candidate must make all disclosures required pursuant to this subsection in writing to the association with his or her candidacy information.

The association shall distribute the disclosures to each member of the association with the ballot in the manner established in the bylaws of the association.

6.

Unless a person is appointed by the declarant, a person may not be a member of the executive board or an officer of the association if the person, the person’s spouse or the person’s parent or child, by blood, marriage or adoption, performs the duties of a community manager for that association.

7.

An officer, employee, agent or director of a corporate owner of a unit, a trustee or designated beneficiary of a trust that owns a unit, a partner of a partnership that owns a unit, a member or manager of a limited-liability company that owns a unit, and a fiduciary of an estate that owns a unit may be an officer of the association or a member of the executive board.

In all events where the person serving or offering to serve as an officer of the association or a member of the executive board is not the record owner, the person shall file proof in the records of the association that:

(a) The person is associated with the corporate owner, trust, partnership, limited-liability company or estate as required by this subsection;

and (b) Identifies the unit or units owned by the corporate owner, trust, partnership, limited-liability company or estate.

- *AB313_R1* – 26 – 8.

[The] Except as otherwise provided in NRS 116B.550, the election of any member of the executive board must be conducted by secret [written] ballot as follows:

(a) The secretary or other officer specified in the bylaws of the association shall cause a secret paper or electronic ballot to be provided to each unit’s owner and :

(1) If a paper ballot is provided, shall send the ballot and a return envelope , [to be sent,] prepaid by United States mail, to the mailing address of each unit within the condominium hotel or to any other mailing address designated in writing by the unit’s owner [.] ;

or (2) If an electronic ballot is provided, shall provide the ballot or make the ballot available by electronic means to each unit’s owner.

(b) Each unit’s owner must be provided with at least 15 days after the date the secret [written] ballot is mailed , provided or made available to the unit’s owner to return the secret [written] ballot to the association [.] by physical or electronic means.

(c) A quorum is not required for the election of any member of the executive board.

(d) Only the secret [written] ballots that [are returned to] the association receives by physical or electronic means may be counted to determine the outcome of the election.

(e) [The secret written ballots must be opened and counted at] At a meeting of the association [.] , the secret ballots physically received by the association must be opened and counted and the results of the secret ballots received by the association by electronic means must be reviewed, announced and entered into the record.

A quorum is not required to be present when the secret [written] ballots are opened and counted or the results of the secret ballots received by the association by electronic means are reviewed, announced and entered into the record at the meeting.

(f) The incumbent members of the executive board and each person whose name is placed on the ballot as a candidate for a member of the executive board may not possess, be given access to or participate in the opening or counting of the secret [written] ballots that [are returned to] the association physically receives, or the collection of data regarding the secret ballots that the association receives by electronic means, before those secret [written] ballots have been opened and counted or reviewed, announced and entered into the record, as applicable, at a meeting of the association.

9.

Each member of the executive board shall, within 90 days after his or her appointment or election, certify in writing to the association, on a form prescribed by the Administrator, that the - *AB313_R1* – 27 – member has read and understands the governing documents of the association and the provisions of this chapter to the best of the member’s ability.

The Administrator may require the association to submit a copy of the certification of each member of the executive board of that association at the time the association registers with the Ombudsman pursuant to NRS 116B.625.

Sec.

9.4.

NRS 116B.450 is hereby amended to read as follows:

116B.450 1.

Notwithstanding any provision of the declaration or bylaws to the contrary, any member of the executive board, other than a member appointed by the declarant or elected by the hotel unit owner, may be removed from the executive board, with or without cause, if at a removal election held pursuant to this section, the number of votes cast in favor of removal constitutes:

(a) At least 35 percent of the total number of voting members of the association;

and (b) At least a majority of all votes cast in that removal election.

2.

A removal election may be called by units’ owners constituting at least 10 percent, or any lower percentage specified in the bylaws, of the total number of voting members of the association.

To call a removal election, the units’ owners must submit a written petition which is signed by the required percentage of the total number of voting members of the association pursuant to this subsection and which is mailed, return receipt requested, or served by a process server to the executive board or the community manager for the association.

If a removal election is called pursuant to this subsection and the voting rights of the units’ owners will be exercised through the use of secret [written] ballots pursuant to this section:

(a) The secret [written] ballots for the removal election must be [sent] mailed, provided or made available in the manner required by this section not less than 15 days or more than 60 days after the date on which the petition is received .

[;

and] (b) The executive board shall set the date for the meeting to open and count the secret [written] ballots physically received by the association and to review, announce and enter into the record the results of the secret ballots received by the association by electronic means so that the meeting is held not more than 15 days after the deadline for returning the secret [written] ballots by physical or electronic means and not later than 90 days after the date on which the petition was received.

(c) Upon written request submitted to the community manager, president or secretary of the association by a member of the executive board who is the subject of the removal election, the secretary or other officer specified in the bylaws of the association shall cause notice of a meeting of the executive board to be given - *AB313_R1* – 28 – to the units’ owners not later than 5 days after receipt of the written request.

The notice must include the date, time and location of the meeting, as requested by the member of the executive board who is the subject of the removal election, and identify the removal of the member from the executive board as an agenda item listed for discussion.

A meeting requested pursuant to this paragraph must occur before the date for the meeting set by the executive board pursuant to paragraph (b).

3.

[The] Except as otherwise provided in NRS 116B.550, the removal of any member of the executive board must be conducted by secret [written] ballot as follows:

(a) The secretary or other officer specified in the bylaws of the association shall cause a secret paper or electronic ballot to be provided to each unit’s owner and :

(1) If a paper ballot is provided, shall send the ballot and a return envelope , [to be sent,] prepaid by United States mail, to the mailing address of each unit within the condominium hotel or to any other mailing address designated in writing by the unit’s owner [.] ;

or (2) If an electronic ballot is provided, shall provide the ballot or make the ballot available by electronic means to each unit’s owner.

(b) Each unit’s owner must be provided with at least 15 days after the date the secret [written] ballot is mailed , provided or made available to the unit’s owner to return the secret [written] ballot to the association [.] by physical or electronic means.

(c) Only the secret [written] ballots that [are returned to] the association receives by physical or electronic means may be counted to determine the outcome.

(d) [The secret written ballots must be opened and counted at] At a meeting of the association [.] , the secret ballots physically received by the association must be opened and counted and the results of the secret ballots received by the association by electronic means must be reviewed, announced and entered into the record.

A quorum is not required to be present when the secret [written] ballots physically received by the association are opened and counted or the results of the secret ballots received by the association by electronic means are reviewed, announced and entered into the record at the meeting.

(e) The incumbent members of the executive board, including, without limitation, the member who is subject to the removal, may not possess, be given access to or participate in the opening or counting of the secret [written] ballots that [are returned to] the association physically receives, or the collection of data regarding the secret ballots that the association receives by electronic means, - *AB313_R1* – 29 – before those secret [written] ballots have been opened and counted or reviewed, announced and entered into the record, as applicable, at a meeting of the association.

Sec.

9.6.

NRS 116B.550 is hereby amended to read as follows:

116B.550 1.

Unless prohibited or limited by the declaration or bylaws and except as otherwise provided in this section, the units’ owners may vote at a meeting in person, by absentee ballot pursuant to paragraph (d) of subsection 2, by a proxy pursuant to subsections 3 to 8, inclusive, or, when a vote is conducted without a meeting, by paper or electronic ballot pursuant to subsection 9.

2.

At a meeting of the units’ owners, the following requirements apply:

(a) Units’ owners who are present in person may vote by voice vote, show of hands, standing or any other method for determining the votes of the units’ owners, as designated by the person presiding at the meeting.

(b) If only one of several owners of a unit is present, that owner is entitled to cast all the votes allocated to that unit.

If more than one of the owners are present, the votes allocated to that unit may be cast only in accordance with the agreement of a majority in interest of the owners, unless the declaration expressly provides otherwise.

There is majority agreement if any one of the owners cast the votes allocated to the unit without protest being made promptly to the person presiding over the meeting by any of the other owners of the unit.

(c) Unless a greater number or fraction of the votes in the association is required by this chapter or the declaration, a majority of the votes cast determines the outcome of any action of the association.

(d) Subject to the provisions of subsection 1, a unit’s owner may vote by absentee ballot without being present at the meeting.

The association promptly shall deliver an absentee ballot to a unit’s owner who requests it if the request is made at least 3 days before the scheduled meeting.

Votes cast by absentee ballot must be included in the tally of a vote taken at that meeting.

(e) When a unit’s owner votes by absentee ballot, the association must be able to verify that the ballot is cast by the unit’s owner having the right to do so.

3.

Except as otherwise provided in this section, votes allocated to a unit may be cast pursuant to a proxy executed by a unit’s owner.

A unit’s owner may give a proxy only to a member of his or her immediate family, a tenant of the unit’s owner who resides in the condominium hotel, the hotel unit owner or another unit’s owner who resides in the condominium hotel.

If a unit is owned by more than one person, each owner of the unit may vote or register protest - *AB313_R1* – 30 – to the casting of votes by the other owners of the unit through an executed proxy.

A unit’s owner may revoke a proxy given pursuant to this section only by actual notice of revocation to the person presiding over a meeting of the association.

4.

Before a vote may be cast pursuant to a proxy:

(a) The proxy must be dated.

(b) The proxy must not purport to be revocable without notice.

(c) The proxy must designate the meeting for which it is executed, and such a designation includes any recessed session of the meeting.

(d) The proxy must designate each specific item on the agenda of the meeting for which the unit’s owner has executed the proxy, except that the unit’s owner may execute the proxy without designating any specific items on the agenda of the meeting if the proxy is to be used solely for determining whether a quorum is present for the meeting.

If the proxy designates one or more specific items on the agenda of the meeting for which the unit’s owner has executed the proxy, the proxy must indicate, for each specific item designated in the proxy, whether the holder of the proxy must cast a vote in the affirmative or the negative on behalf of the unit’s owner.

If the proxy does not indicate whether the holder of the proxy must cast a vote in the affirmative or the negative for a particular item on the agenda of the meeting, the proxy must be treated, with regard to that particular item, as if the unit’s owner were present but not voting on that particular item.

(e) The holder of the proxy must disclose at the beginning of the meeting for which the proxy is executed and any recessed session of that meeting the number of proxies pursuant to which the holder will be casting votes.

5.

A proxy terminates immediately after the conclusion of the meeting, and any recessed sessions of the meeting, for which it is executed.

6.

A vote may not be cast pursuant to a proxy for the election or removal of a member of the executive board of an association.

7.

The holder of a proxy may not cast a vote on behalf of the unit’s owner who executed the proxy in a manner that is contrary to the proxy.

8.

A proxy is void if the proxy or the holder of the proxy violates any provision of subsections 3 to 7, inclusive.

9.

[Unless prohibited or limited by the declaration or bylaws, an] An association may conduct a vote without a meeting [.

Except as otherwise provided in NRS 116B.445 and 116B.450, if] , including, without limitation, a vote for the election or removal of a member of the executive board.

If an association conducts a vote without a meeting, the following requirements apply:

- *AB313_R1* – 31 – (a) The association shall notify the units’ owners that the vote will be taken by ballot.

(b) The association shall deliver a paper or electronic ballot to every unit’s owner entitled to vote on the matter [.] and may allow the units’ owners to vote by using a voting machine.

Any such voting machine must be a mechanical voting system that has been approved by the Secretary of State in accordance with chapter 293B of NRS and, once voting begins, must be available for use between the hours of 8 a.m.

and 8 p.m.

each day for a period of 15 consecutive days.

(c) The ballot must set forth each proposed action and provide an opportunity to vote for or against the action.

(d) When the association delivers the ballots, it shall also:

(1) Indicate the number of responses needed to meet the quorum requirements;

(2) State the percentage of votes necessary to approve each matter other than election of directors;

(3) Specify the time and date by which a ballot must be delivered to the association to be counted, which time and date may not be fewer than 3 days after the date the association delivers the ballot;

and (4) Describe the time, date and manner by which units’ owners wishing to deliver information to all units’ owners regarding the subject of the vote may do so.

(e) Except as otherwise provided in the declaration or bylaws, a ballot is not revoked after delivery to the association by death or disability of or attempted revocation by the person who cast that vote.

(f) Approval by ballot pursuant to this subsection is valid only if the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action.

(g) If the vote is for the election or removal of a member of the executive board and the association allows the use of electronic voting:

(1) Upon the request of a unit’s owner, an association shall provide a form to the unit’s owner that allows the unit’s owner to opt out of receiving electronic ballots.

(2) If a unit’s owner has not given the association an electronic mail address or has opted out of using electronic ballots by returning to the association the form provided pursuant to subparagraph (1) at any time not less than 5 days before the date of the meeting when the votes will be counted, the association shall send a paper ballot and a return envelope, prepaid by United States mail, to the mailing address of the unit’s owner or to any other mailing address designated in writing by the unit’s owner.

- *AB313_R1* – 32 – (3) If the association allows units’ owners to vote by using a voting machine, the association must provide to each unit’s owner, not less than 15 days before the date on which voting begins, a notice of the opportunity to vote by using a voting machine that provides the location at which the voting machine will be available for use and the days and times during which the voting machine will be available for use.

The association shall also provide with the notice a form that allows a unit’s owner to opt out of voting by using a voting machine and instead receive a paper ballot.

If a unit’s owner returns the form to the association within 15 days after receiving the notice, the association shall send a paper ballot and a return envelope, prepaid by United States mail, to the mailing address of the unit’s owner or to any other mailing address designated in writing by the unit’s owner.

(4) A meeting of the units’ owners must be held in the manner set forth in NRS 116B.445 or 116B.450 to open and count the paper ballots and review and announce the results obtained from the electronic ballots or voting machine, as applicable, and enter the results into the meeting record.

Any paper ballots must be opened and counted in a manner that may be readily observed by the units’ owners in attendance at the meeting and must not occur privately behind closed doors or in an area that is not open to observation by the units’ owners in attendance.

(5) Any electronic voting must be conducted by an independent third-party through the use of an online voting system, a voting machine, or both an online voting system and a voting machine.

The independent third-party shall be deemed to be a data collector pursuant to NRS 603A.030 and is subject to the obligations and liabilities of chapter 603A of NRS with regard to the security and privacy of any personal information, as that term is defined in NRS 603A.040, that is provided or maintained through the use of an online voting system or voting machine.

The independent third-party conducting the electronic voting may not be any of the following persons and may not share voting results or information with any of the following persons before the meeting held pursuant to subparagraph (4):

(I) A candidate for or member of the executive board or an officer of the association;

(II) A person who resides in a unit with, is married to, is domestic partners with, or is related by blood, adoption or marriage within the third degree of consanguinity or affinity to another person who is a member of the executive board or an officer of the association or performs the duties of a community manager for the association;

- *AB313_R1* – 33 – (III) An officer, employee, agent or director of a corporate owner of a unit, a trustee or designated beneficiary of a trust that owns a unit, a partner of a partnership that owns a unit, a member or manager of a limited-liability company that owns a unit or a fiduciary of an estate that owns a unit if the unit is also owned by another person who is a member of the executive board or an officer of the association or serves as the community manager for the association;

(IV) A person who performs the duties of a community manager for the association, an affiliate of the community manager, an employee of the company by whom the community manager is employed or an affiliate of the company, the spouse of any such person or the parent or child of any such person by blood, adoption or marriage;

(V) The declarant of the association or an affiliate of the declarant;

(VI) A unit’s owner or resident of the association;

or (VII) Any person who stands to gain any personal profit or compensation of any kind from a matter before the executive board of the association other than payment only for conducting voting services for the association.

If the declaration requires that votes on specified matters affecting the condominium hotel must be cast by the lessees of leased units rather than the units’ owners who have leased the units:

(a) This section applies to the lessees as if they were the units’ owners;

(b) The units’ owners who have leased their units to the lessees may not cast votes on those specified matters;

(c) The lessees are entitled to notice of meetings, access to records and other rights respecting those matters as if they were the units’ owners;

and (d) The units’ owners must be given notice, in the manner provided in this chapter, of all meetings at which the lessees are entitled to vote.

11.

If any votes are allocated to a unit that is owned by the association, those votes may not be cast, by proxy or otherwise, for any purpose.

12.

As used in this section, “online voting system” means an Internet-based voting system with a process that has the ability:

(a) To authenticate:

(1) The identity of a unit’s owner;

and (2) The validity of each electronic vote to ensure that the vote is not altered in transit;

- *AB313_R1* – 34 – (b) To enable a unit’s owner to transmit an electronic ballot to the online voting system in a way that ensures the secrecy and integrity of the ballot;

(c) To transmit an electronic receipt to each unit’s owner who casts an electronic vote;

(d) To separate any authenticating or identifying information from an electronic ballot, thereby rendering it impossible to match an electronic ballot to a specific unit’s owner;

(e) To store electronic votes and keep them accessible to units’ owners and the Office of the Ombudsman for the purposes of recounts, inspections and reviews;

(f) To count all lawful votes;

and (g) To identify, reject and record the basis for rejection of all unlawful votes, including, without limitation, a vote by a unit’s owner whose voting rights have been suspended, a vote by a person who is not a unit’s owner and duplicate votes.

Sec.

9.8.

NRS 116B.615 is hereby amended to read as follows:

116B.615 1.

Money in the reserve account of an association required by NRS 116B.590 may not be withdrawn without the signatures of at least two members of the executive board or the signatures of at least one member of the executive board and one officer of the association who is not a member of the executive board.

2.

Except as otherwise provided in subsection 3, money in the operating account of an association may not be withdrawn without the signatures of at least one member of the executive board or one officer of the association and a member of the executive board, an officer of the association or the community manager.

3.

Money in the operating account of an association may be withdrawn without the signatures required pursuant to subsection 2 to:

(a) Transfer money to the reserve account of the association at regular intervals;

(b) Make automatic payments for utilities;

(c) Make automatic payments for the cost of any insurance policies maintained pursuant to NRS 116.3113;

(d) Make automatic payments for telecommunications services maintained by the association, including, without limitation, telephone, cable, satellite and Internet services;

(e) Make automatic payments for any services to the association that are billed on a monthly basis;

(f) Make annual payments to the Office of the Ombudsman;

(g) Make an electronic transfer of money to a state agency pursuant to NRS 353.1467;

or - *AB313_R1* – 35 – (h) Make an electronic transfer of money to the United States Government, or any agency thereof, pursuant to any federal law requiring transfers of money to be made by an electronic means authorized by the United States Government or the agency thereof.

4.

An association may use electronic signatures to withdraw money in the operating account of the association if:

(a) The electronic transfer of money is made pursuant to a written agreement entered into between the association and the financial institution where the operating account of the association is maintained;

(b) The executive board has expressly authorized the electronic transfer of money;

and (c) The association has established internal accounting controls which comply with generally accepted accounting principles to safeguard the assets of the association.

5.

As used in this section, “electronic transfer of money” has the meaning ascribed to it in NRS 353.1467.

Sec.

10.

Sections 1 to 7, inclusive, and 9.2 to 9.8, inclusive, of this act become effective on October 1, 2021.

H - *AB313**AB313_R1*