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Artemis Exploration Co. v. Ruby Lake Estates Homeowner's Association

Supreme Court of Nevada

October 3, 2019

ARTEMIS EXPLORATION COMPANY, A NEVADA CORPORATION; HAROLD WYATT; AND MARY WYATT, Appellants,
v.
RUBY LAKE ESTATES HOMEOWNER'S ASSOCIATION, Respondent.

          Appeal from a final judgment in a real property action. Fourth Judicial District Court, Elko County; Alvin R. Kacin, Judge.

          Gerber Law Offices, LLP, and Travis W. Gerber and Zachary A. Gerber, Elko, for Appellants.

          Leach Kern Gruchow Anderson Song and Karen M. Ayarbe, Reno, for Respondent.

          BEFORE PICKERING, PARRAGUIRRE and CADISH, JJ.

          OPINION

          CADISH, J.

         In 1991, the Nevada Legislature adopted the Uniform Common-Interest Ownership Act, as codified in NRS Chapter 116. See 1991 Nev. Stat., ch. 245, §§ 1-128, at 535-79; NRS 116.001. NRS Chapter 116 defines what constitutes a "common-interest community," see NRS 116.021, and also authorizes the creation of a "unit-owners' association" to govern the common-interest community, see NRS 116.011; NRS 116.3101. As relevant to this appeal, a unit-owners' association is authorized to impose assessments on unit owners for the unit owners' association to maintain "common elements," which, generally speaking, comprise real estate within the common-interest community that is owned by the unit-owners' association but that benefits all unit owners. See NRS 116.017.

         Appellants own property in Ruby Lake Estates (RLE), a neighborhood which was created in 1989. In the underlying declaratory relief action, they challenged respondent Ruby Lake Estates Homeowner's Association's (RLEHOA) authority to impose assessments on them. In particular, appellants argued that RLE was not a validly created "common-interest community* because the recorded Declaration that created RLE did not expressly state that RLE's residents would be responsible for paying assessments for the maintenance of common elements or other real estate aside from their individual units, which appellants contend is required under NRS 116.021. Alternatively, appellants contended that RLEHOA was not a validly created "unit-owners' association" because it was not organized until 2006, while NRS 116.3101 requires a unit-owners' association to be created before the first lot in the common-interest community is conveyed. The district court granted summary judgment for RLEHOA, thereby affirming RLEHOA's authority to impose assessments on appellants.

         We agree with the district court's determination that RLEHOA is authorized to impose assessments. First, we conclude that RLE is a common-interest community within the meaning of NRS 116.021 because RLE's Declaration contained an implied payment obligation for the common elements and other real estate that appellants had notice of by virtue of the Declaration when they purchased their lots. Second, we conclude that NRS 116.3101(1) does not apply to common-interest communities formed before 1992 and that, consequently, RLEHOA did not need to be organized before the first lot in RLE was conveyed.

         FACTS AND PROCEDURAL HISTORY

         RLE is a rural subdivision in Elko County, Nevada. Developers Stephen and Mavis Wright (the Wrights) filed an official Plat Map for the community on September 15, 1989. The first sheet of the Plat Map reads in relevant part:

At a regularly held meeting at the Board of Commissioners of Elko County, State of Nevada, held on the 5th day of July 1989, this Plat was approved as a Final Plat pursuant to NRS 278.380. The Board does hereby reject on behalf of the public all streets or roadways for maintenance purposes and does hereby accept all streets and easements therein offered for utility, drainage, and access purposes only as dedicated for public use.

(Emphasis added.)

         Subsequently, the Wrights recorded the Declaration for the community on October 25, 1989.[1] As relevant here, the Declaration provided this:

The real property affected hereby is subjected to the imposition of the covenants, conditions, restrictions and reservations specified herein to provide for the development and maintenance of an aesthetically pleasing and harmonious community of residential dwellings for the purpose of preserving a high quality of use and appearance and maintaining the value of each and every lot and parcel of said property.

(Emphasis added.) The Declaration further provided for the creation of an Architectural ...


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