Insurance: Repair or replacement of damaged or destroyed portion of community.
1. Any portion of the common-interest community for which insurance is required under NRS 116.3113 which is damaged or destroyed must be repaired or replaced promptly by the association unless:
(a) The common-interest community is terminated, in which case NRS 116.2118, 116.21183 and 116.21185 apply;
(b) Repair or replacement would be illegal under any state or local statute or ordinance governing health or safety; or
(c) Eighty percent of the units’ owners, including every owner of a unit or assigned limited common element that will not be rebuilt, vote not to rebuild.
Ê The cost of repair or replacement in excess of insurance proceeds and reserves is a common expense.
2. If the entire common-interest community is not repaired or replaced, the proceeds attributable to the damaged common elements, must be used to restore the damaged area to a condition compatible with the remainder of the common-interest community, and except to the extent that other persons will be distributees (subparagraph 2 of paragraph (l) of subsection 1 of NRS 116.2105):
(a) The proceeds attributable to units and limited common elements that are not rebuilt must be distributed to the owners of those units and the owners of the units to which those limited common elements were allocated, or to lienholders, as their interests may appear; and
(b) The remainder of the proceeds must be distributed to all the units’ owners or lienholders, as their interests may appear, as follows:
(1) In a condominium, in proportion to the interests of all the units in the common elements; and
(2) In a cooperative or planned community, in proportion to the liabilities of all the units for common expenses.
3. If the units’ owners vote not to rebuild any unit, that unit’s allocated interests are automatically reallocated upon the vote as if the unit had been condemned under subsection 1 of NRS 116.1107, and the association promptly shall prepare, execute and record an amendment to the declaration reflecting the reallocations.
Last modified: February 27, 2006