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AB 324

Revises provisions governing housing. (BDR 10-1045)

2025 Regular Session Introduced by David Orentlicher

AB 324 lets HOAs opt to exclude interiors of units sharing common walls from association insurance; owners may need separate unit policies for coverage.

(Pursuant to Joint Standing Rule No. 14.3.1, no further action allowed.)
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Bill Summary · AB 324

AB 324 — Summary (Revises provisions governing housing; BDR 10‑1045)

Status: Introduced March 3, 2025. Referred to Committee on Judiciary. Legislative status entries indicate committee hearings were cancelled at the author’s request and, as of April 12, 2025, no further action allowed pursuant to the applicable Joint Standing Rule. Fiscal note: no effect on State or local government (per bill materials).

Purpose / intent

AB 324 amends NRS 116.3113 to change how property insurance required of a unit‑owners’ association (common‑interest community / homeowners association) treats the individual units in multi‑unit buildings. The bill removes the mandatory requirement that association property insurance include units that are divided by vertical boundaries (common walls), making coverage of those units optional for the association.

Key provisions

  • Retains existing association insurance requirements, including:
    • Property insurance on common elements (and, in planned communities, property that must become common elements) with coverage after deductibles of at least 80% of actual cash value (excluding land, foundations, etc.).
    • Commercial general liability insurance (amount set by executive board, but at least as specified in the declaration).
    • Crime insurance covering dishonest acts by board members, officers, employees and community managers (minimum amount: lesser of 3 months’ aggregate assessments plus reserves or $5,000,000).
    • Directors & officers (errors and omissions) insurance with minimum aggregate coverage of $1,000,000 naming the association as insured.
  • Modifies NRS 116.3113(2):
    • For buildings with units divided by horizontal boundaries (i.e., typical stacked units / condo levels), the association’s property insurance must continue to include the units (excluding owners’ improvements and betterments).
    • For buildings with units divided by vertical boundaries that comprise common walls between units (e.g., side‑by‑side units sharing common walls), the association’s property insurance may, but need not, include the units. Inclusion becomes an option for the association rather than a requirement.
  • Maintains requirement that if required insurance is not reasonably available the association must promptly notify unit owners.
  • Preserves unit owners’ right to obtain their own insurance even if the association maintains a policy.

Who is affected

  • Unit‑owners’ associations (HOAs, condo associations, planned communities): gain discretion whether to insure interiors of units in buildings with vertical (common‑wall) boundaries.
  • Unit owners in those buildings: may face increased need to purchase/maintain individual unit policies (HO‑6 or equivalent) to cover interiors, improvements, personal property and liability if the association elects not to insure units.
  • Insurers and insurance market: potential changes in demand for individual unit policies; association policy portfolios may change depending on board decisions.
  • Prospective buyers and lenders: potential impacts on loan/escrow requirements and owner costs if unit coverage is not provided by the association.

Practical implications / considerations

  • Shifts potential cost and risk from associations to individual owners where associations opt out of insuring units with vertical boundaries.
  • Association boards would need to consider exposure, reserve funding, and owner notification if they choose not to include units.
  • Owners should verify what the association policy covers before purchasing and consider maintaining individual unit insurance if association coverage is absent or limited.

Procedural notes

  • Introduced March 3, 2025 (Assemblymember Orentlicher). Committee hearings were set but repeatedly cancelled at the author’s request; legislative record shows no further action allowed under standing rule as of April 2025.

Compiled from official sources — confirm details with the bill’s official record.

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