Fixing a Dispute Resolution System That Fails Homeowners

You followed the rules. You read the documents. Something seems wrong, so you raised a legitimate question.

And the answer you get is silence — or a lawyer.

If you’re an HOA owner who has tried to challenge a board decision, request records, question an election, or push back on an enforcement action, you may have felt something unsettling: It’s not just that you disagree. It’s that there doesn’t seem to be a place to get a straight answer.

You’re not imagining it. Too many homeowners, too often, discover that Nevada’s dispute-resolution system is designed around procedure — not clarity. Around process — not answers.

Homeowners associations do not fit neatly into traditional legal categories. They are not purely private contracts. They are not public governments. They are something in between.

And yet, the frustrating part is this: Nevada lawmakers recognized this and built a solution more than a decade ago.

It just never stopped to ask whether it was delivering what it promised.

Understanding the Dispute Resolution Landscape

The implementation of a fair and effective administrative dispute-resolution mechanism is the single most important component of meaningful reform in Nevada’s common-interest communities. Elections, fiduciary duties, and declarant-control rules define what the law promises. Dispute resolution makes them real.

In Nevada, HOA disputes fall into two very different buckets.

First: statutory disputes.

These involve alleged violations of Nevada’s HOA law (NRS 116). If a board fails to provide required notice, refuses access to records, or violates a statutory duty, a complaint can be filed with the Nevada Real Estate Division (NRED) through the Ombudsman. If “good cause” is found, the matter can proceed to the Commission for Common-Interest Communities for hearing and enforcement.

Nevada was the first state to create this type of administrative path. It was a deliberate legislative design: provide homeowners an accessible, non-judicial forum to enforce statutory obligations without immediately resorting to civil court.

That was good policy. But it was unfinished. Over time, operational deficiencies have weakened owner confidence in the regulatory process.

When complaints are investigated and then closed without referral to hearing, homeowners deserve to understand why. Currently, there is no independent mechanism to review investigative closure decisions before a matter simply ends.

A practical fix exists: create a limited, independent Review Officer that reports to the Commission to provide oversight of investigative closures. Not to re-litigate every complaint — but to ensure consistency and accountability.

A second issue is the expansive application of confidentiality (NRS 116.757). Confidentiality serves legitimate purposes, but should not shield the regulator from meaningful transparency. Other enforcement agencies manage to balance investigative privacy with public accountability. The same balance can be applied here.

These are operational reforms. They are achievable. They would strengthen — not dismantle — the administrative path.

Second: governing-document disputes.

These are disputes about what the HOA’s own CC&Rs, bylaws, and rules mean — and how they apply.

Did the board follow the bylaws? What does this architectural restriction really say? When does declarant control legally end? Were election procedures applied correctly?

These are not regulatory violations. They are interpretation and governance disputes. And for these disputes — if pre-litigation ADR fails — there is only one binding path: civil court.

That’s where the system breaks down.

The Reality of Civil Litigation

Most people assume that if something is wrong, a court will sort it out.

But civil litigation is expensive. It is slow. And in HOAs, prevailing-party attorney-fee clauses mean the losing side may have to pay the other side’s legal bills.

HOAs litigate using assessment-funded budgets. Homeowners litigate using personal savings. That imbalance shapes outcomes long before a judge ever reads the governing documents.

So, what happens? Most homeowners walk away. Not because they are wrong. Not because they are indifferent. But because risking tens — sometimes hundreds — of thousands of dollars to clarify a disputed provision is irrational.

The merits remain undecided — not because the dispute lacks substance — but because access to a neutral decision is financially out of reach.

HOA owner resolution option

Wasn’t ADR Supposed to Fix This?

Lawmakers recognized years ago that many HOA disputes were ill-suited for full-scale civil litigation. An Alternative Dispute Resolution (ADR) system was created to divert cases out of court.

Under NRS 38.310, a homeowner cannot even “get through the courthouse door” without first participating in ADR.

Originally, the statutory structure created a problem: mediation required mutual agreement. If the association declined, the matter defaulted to arbitration under NRS 38.330 — a process often described as expensive and burdensome.

Arbitration proved workable for fine and assessment enforcement, where monetary stakes justified cost exposure. So associations used it. However, it proved structurally ill-suited for homeowner-initiated interpretive disputes involving governance procedures, where damages were minimal and fee risk chilled participation. The result was predictable: enforcement cases proceeded; clarification cases stalled.

Plus, the structure gave the association practical veto power over lower-cost resolution.

In 2013, AB 370 sought to address that imbalance. As Assemblyman James Ohrenschall explained during committee discussion, the bill was designed to replace expensive arbitration with either mediation or a referee program, advocated by the Division, capable of issuing decisions on disputes involving CC&Rs and related governing documents.

He noted:

“I do not have anything against arbitration or against the arbitrators, but everything I have seen shows that the price is much too high. Rather than having what we had always hoped for with alternative dispute resolution, something that is more efficient and less costly than taking the dispute through the courtroom, we end up with something that in some cases can be more costly and more time consuming.”

— Assemblyman James Ohrenschall, March 27, 2013

As introduced, AB 370 gave homeowners the power to elect the Division’s referee program in lieu of mediation. If the homeowner did not elect the Division’s program, the dispute would proceed to mediation.

That unilateral election authority was removed before final passage. The final statute conditioned referee review on mutual consent.

The structural consequence is significant.

Mediation — now the default when there is no agreement — cannot issue determinations. It requires compromise. If one side refuses to yield, particularly on an interpretive issue, mediation ends without resolution. And because referee review depends on mutual agreement, contested interpretive disputes predictably default to mediation — a forum incapable of deciding them.

Nevada Authorized a Referee Program in 2013

AB 370 created a referee program for HOA disputes. It exists in statute (NRS 38). It is administered by the Division. It produces a written, reasoned evaluation.

It is advisory — not binding. It cannot award attorney’s fees. It caps damages at modest levels. It was designed to be low-risk and accessible.

The Legislature envisioned a system where:

• Statutory violations proceed through regulatory investigation; and

• Governing-document disputes are assigned to referee review for neutral evaluation before litigation.

  
  

But the assignment mechanism that would have made the referee program reliably accessible was removed. The tool exists.

Homeowners simply cannot reliably reach it.

Nevada authorized referee review in 2013—but never gave homeowners a way to reach it.

The Simple Fix

Reform does not require invention. It requires restoring what was originally contemplated: unilateral access to structured referee review.

This does not expand government power. It does not bind anyone to an administrative order. It does not close the courthouse doors. It simply guarantees that before attorney-fee exposure and litigation risk explode, a neutral issues a written assessment.

If the homeowner is wrong, they find out early — without catastrophic exposure. If the board is wrong, it receives an impartial evaluation before escalating.

Weak claims fade. Strong claims sharpen. And only the disputes that truly require court proceed further.

Nevada Doesn’t Need to Reinvent the Wheel

Other HOA states are beginning to confront the same structural problems.

Florida lawmakers are now considering the creation of a specialized community association court after years of frustration with mediation-first systems that fail to produce neutral determinations.

Nevada does not need to go that far. It already built the mechanisms.

The choice before lawmakers is simple: activate the tool that exists — or risk the kind of escalation other states are now contemplating.

Why This Matters

Right now, the structure quietly favors the party with deeper pockets and greater risk tolerance.

When violations by associations get brushed under the rug or one side can block neutral review and force the other into costly litigation, the merits become secondary to leverage.

A Commission hearing or written referee determination changes that dynamic. It introduces accountability. It activates fiduciary decision-making. It forces both sides to confront substance before escalation.

This is not radical reform.

It is a modest correction to a damaged but repairable enforcement structure.

Conclusion

Nevada does not need a new court. It already has the mechanisms needed. Strengthen the regulatory path. Activate the referee path. Restore balance.

It is time to finish what lawmakers intended when they first sought.

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Read the Policy Paper

The full NVHOAReform policy paper documents the history, failures, and proposed fix in detail, with statutory analysis and legislative context. It is written for policymakers, regulators, and informed homeowners who want more than incremental tweaks.

If Nevada is serious about finishing the work it began in 2003, the question is no longer whether reform is needed — but whether lawmakers are willing to correct a system that fails precisely where neutrality matters most.

Read more: NVHOAReform post Dispute resolution (ADR) reform must be a Legislative priority