Transfer of special declarant’s right.
1. A special declarant’s right created or reserved under this chapter may be transferred only by an instrument evidencing the transfer recorded in every county in which any portion of the common-interest community is located. The instrument is not effective unless executed by the transferee.
2. Upon transfer of any special declarant’s right, the liability of a transferor declarant is as follows:
(a) A transferor is not relieved of any obligation or liability arising before the transfer and remains liable for warranties imposed upon him by this chapter. Lack of privity does not deprive any unit’s owner of standing to maintain an action to enforce any obligation of the transferor.
(b) If a successor to any special declarant’s right is an affiliate of a declarant, the transferor is jointly and severally liable with the successor for any obligations or liabilities of the successor relating to the common-interest community.
(c) If a transferor retains any special declarant’s rights, but transfers other special declarant’s rights to a successor who is not an affiliate of the declarant, the transferor is liable for any obligations or liabilities imposed on a declarant by this chapter or by the declaration relating to the retained special declarant’s rights and arising after the transfer.
(d) A transferor has no liability for any act or omission or any breach of a contractual obligation or warranty arising from the exercise of a special declarant’s right by a successor declarant who is not an affiliate of the transferor.
3. Unless otherwise provided in a mortgage, deed of trust or other agreement creating a security interest, in case of foreclosure of a security interest, sale by a trustee under an agreement creating a security interest, tax sale, judicial sale or sale under the Bankruptcy Code or a receivership, of any units owned by a declarant or real estate in a common-interest community subject to developmental rights, a person acquiring title to all the property being foreclosed or sold, but only upon his request, succeeds to all special declarant’s rights related to that property held by that declarant, or only to any rights reserved in the declaration pursuant to NRS 116.2115 and held by that declarant to maintain models, offices for sales and signs. The judgment or instrument conveying title must provide for transfer of only the special declarant’s rights requested.
4. Upon foreclosure of a security interest, sale by a trustee under an agreement creating a security interest, tax sale, judicial sale or sale under the Bankruptcy Code or a receivership of all interests in a common-interest community owned by a declarant:
(a) The declarant ceases to have any special declarant’s rights; and
(b) The period of declarant’s control (NRS 116.31032) terminates unless the judgment or instrument conveying title provides for transfer of all special declarant’s rights held by that declarant to a successor declarant.
Last modified: February 27, 2006