Nevada’s HOA dispute resolution process is being looked at right now for “potential improvements” by the Nevada Real Estate Division, a spokesperson said.

Homeowners who have a dispute with an HOA must currently go through the state’s dispute resolution process before they’re allowed to file a civil suit, Teri Williams, a spokesperson for the Department of Business and Industry, said in an email, acknowledging the Nevada Real Estate Division is looking into ways to make the process more efficient.

However, none of the steps within the dispute resolution process right now — mediation, referee program and arbitration — are binding, and detractors of the current system say it’s both a costly process and favors HOAs over homeowners due to deeper pockets.

Nevada has one of the highest concentrations of homeowners’ associations in the country, particularly in Las Vegas and Reno metro areas, Williams said. “As the number of HOAs increases, the potential for disputes also grows,” she said.

A recent study by the National Association of Realtors found the number of HOAs across the country is “booming” — however, more than half of people (57 percent) who live under an HOA don’t like it.

Numbers provided to the Las Vegas Review-Journal show the alternative dispute resolution filings in Nevada hit a high watermark most recently in 2024 with 419, and dropped 47 percent to 223 last year. For reference, there were 332 filings in 2021, 285 in 2022 and 313 in 2023.

David Edelblute, a government relations attorney, said the dispute resolution process is mandatory but does not require a decision and the default path for most parties is mediation, however it often yields no results.

“As a practitioner who has gone through this process, the most common path in this mandatory program is mediation. The referee program is quicker and cheaper, but many HOAs decline to participate because it can be unilaterally blocked,” he said. “This leaves homeowners with a choice between mediation and arbitration, so most choose the cheaper option, which is mediation. Mediation does not require either party to accept the outcome, so parties often view this as a procedural mechanism and not an actual method of resolving disputes.”

Edelblute added HOAs often have deeper pockets and legal resources than homeowners and are more willing to go to court to resolve the dispute.

Williams said any changes to the alternative dispute resolution program would require legislative action. The task force could submit draft language to the Nevada Legislature in 2027.

How did we get here?

In 2013, the Nevada Legislature changed the law regarding alternative dispute resolution. The state previously required disputes about covenants, conditions and restrictions or governing documents go through mediation or arbitration before filing lawsuits, said Barbara Holland, a supervisory community manager who writes about HOA issues for the Las Vegas Review-Journal.

Holland explained before 2013, the framework allowed for mediation, a referee program or binding arbitration. The courts were required to dismiss any lawsuit filed before the mandatory ADR process was completed.

Prior to 2013, parties filing for ADR were automatically placed into non-binding arbitration, unless all parties agreed to either mediation or binding arbitration. Since 2013, parties filing ADR are automatically placed into mediation, unless the parties all agree to arbitration or a referee.

Adam Clarkson, an attorney with Clarkson McAlonis & O’Connor and chair of Community Associations Institute’s Nevada Legislative Action Committee, has been actively working to change the dispute resolution process. He said the committee does not believe the current process works for either side because only about 20 percent of the mediations result in resolution, according to the records of the real estate division.

Clarkson said one of the problems with the current process is it pushes parties into mediation instead of non-binding arbitration. Clarkson said a lot of homeowners come to mediation and argue their case to the mediator with the expectation that the mediator will decide, however that is arbitration, not mediation.

“(Before 2013), Nevada had an ADR process requiring non-binding arbitration first, so if you wanted to sue, one side or the other, you had to go in and file for non-binding arbitration or agree to engage in mediation or binding arbitration,” he said.

However, Clarkson said the non-binding arbitration process in place before 2013 was generally a quick process and homeowners could feasibly represent themselves. He said the rules were largely changed in 2013 because some homeowners complained the associations were winning too frequently and the process was too expensive.

Clarkson said he doesn’t have specific numbers regarding case results before 2013, however estimates it was somewhere between a little over 50 percent percent in favor of associations and the remaining a little less than 50 percent for homeowners. Further, as an alternative to formal litigation in court, the non-binding arbitration process was very cost effective.

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