Study of reserves; duties of executive board regarding study; qualifications of person who conducts study; contents of study; submission of study to Commission; regulations regarding study; use of money credited against residential construction tax for upkeep of park facilities and related improvements identified in study.
1. The executive board of an association shall:
(a) Cause to be conducted, at least once every 5 years, a study of the reserves required to repair, replace and restore the major components of the common elements;
(b) Review the results of that study at least annually to determine if those reserves are sufficient; and
(c) Make any adjustments it deems necessary to maintain the required reserves.
2. The study of the reserves required by subsection 1 must be conducted by a person who is qualified by training and experience to conduct such a study, including, without limitation, a member of the executive board, a unit’s owner or a community manager who is so qualified. The study of the reserves must include, without limitation:
(a) A summary of an inspection of the major components of the common elements that the association is obligated to repair, replace or restore;
(b) An identification of the major components of the common elements that the association is obligated to repair, replace or restore which have a remaining useful life of less than 30 years;
(c) An estimate of the remaining useful life of each major component identified pursuant to paragraph (b);
(d) An estimate of the cost of repair, replacement or restoration of each major component identified pursuant to paragraph (b) during and at the end of its useful life; and
(e) An estimate of the total annual assessment that may be required to cover the cost of repairing, replacement or restoration of the major components identified pursuant to paragraph (b), after subtracting the reserves of the association as of the date of the study.
3. The results of the study of the reserves required by subsection 1 must be submitted to the Commission not later than 45 days after the date that the executive board of the association adopts the results of the study.
4. The Commission shall adopt by regulation the qualifications required for conducting the study of the reserves required by subsection 1.
5. If a common-interest community was developed as part of a planned unit development pursuant to chapter 278A of NRS and is subject to an agreement with a city or county to receive credit against the amount of the residential construction tax that is imposed pursuant to NRS 278.4983 and 278.4985, the association that is organized for the common-interest community may use the money from that credit for the repair, replacement or restoration of park facilities and related improvements if:
(a) The park facilities and related improvements are identified as major components of the common elements of the association; and
(b) The association is obligated to repair, replace or restore the park facilities and related improvements in accordance with the study of the reserves required by subsection 1.
Last modified: February 27, 2006