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Community Managers Beware! You Maybe Charging too Much for Resale Documents and YOU are responsible!

Updated: Aug 17, 2023

If you are in the community management industry in Nevada, you are familiar with NRS 116, but how well do you know NRS.116.4109, the section pertaining to Resale Documents?


I have been in the HOA Resale Document industry for over a decade and the entire time there has been a cap on what can be charged for resale documents in Nevada. GetDocsNow literally started the online resale document industry and being a Nevada-based company we have always advised our clients to honor the Nevada Laws regarding governing documents and have never charged more than what is allowed. However, the other online providers have an attitude that the NRS applies to the “unit’s owner or his or her authorized agent”, not them, so their fees can go "on top" of the regulated amount. The fee-on-top method is certainly not a new idea as it has been debated since even before I joined the industry full-time in 2011. In fact, it has been a topic of conversation with many of our clients over the years and we have never chosen to utilize this Loophole because we believe this would be putting profit over our commitment to protect our clients and do right by the document buyer.


While this was a topic of debate and an often-used "loophole" by our competitors, this all changed during the 2021 Nevada Legislative Session. Because other online resale document sellers were taking advantage of the ambiguity of the language in NRS.116.4109, the legislatures added paragraph 8 to clarify exactly what can, and more importantly, cannot be changed. The new paragraph reads as follows:


"In preparing, copying, furnishing, or expediting or otherwise providing any document or other item pursuant to this section, an association, or entity related to or acting on behalf of an association, shall not charge a unit’s owner, the authorized agent of a unit’s owner, a purchaser or, pursuant to subsection 7, the holder of a security interest on a unit, any fee: (a) Not authorized in this section; or (b) In an amount which exceeds any limit set forth in this section."

The verbiage of this new section clearly states that an entity acting on behalf of the association cannot charge an amount that exceeds this statute. There is no longer a question of can the online resale document provider put their fee or any other fees on top of what is allowed by law.


Now here is the concerning part for you as a manager. Ultimately, you are liable as the licensed individual who is regulated by NRED and the Ombudsman’s office. Remember the first part of this statute which states, “a unit’s owner or his or her authorized agent shall furnish to a purchaser a resale package”? As the manager of an association, you are the authorized agent and ultimately responsible for upholding this law. This makes YOU responsible for the actions of YOUR authorized agents, your resale document provider. The State of Nevada Department of Business and Industry Real Estate Division took the enforcement of this so seriously that they created a form to help the document buyer file a complaint. You can click here for a copy of the form.


It is inconceivable that as of the writing of this, July 2023, two years after this change became effective, the online document sellers are still operating in the following ways.

1. “You will make more money with us.”

We usually see that they are putting all of their fees “on top” of what is allowed, thereby giving the management company all of what is allowed by law and adding an additional $30 to $40 above the legal limit. As we have already established the debate over the legitimacy of this loophole was decisively settled by the Nevada legislature over two years ago.


2. “Our fee is included in the cost of the documents.”

The “service” or “provider” fee is included, but they add a “convenience” or “credit card” fee that adds an additional $5 - $10 above the legal limit. Once again this potential loophole was clearly closed by the Nevada legislature in the very first line of the 2021 additions to paragraph 8 which again states, "In preparing, copying, furnishing, or expediting or otherwise providing”. This line clearly deems ANY charges related to the purchasing of resale documents that is over the set limit a violation of this Act.

Earlier I mentioned that at GetDocsNow we have never used the potential loophole options to maximize profits by putting our clients at risk. Today this is more important than ever as any debate over the legality of these options has been clearly settled. With that being said, our philosophy is simply this:


Our fee is included in the document fee AND we don’t charge any above that.

We have stuck to our founding principle of taking care of the management company and their document buyers above all else. This means going the extra mile at our own expense to ensure our clients are legally compliant, not just in this but in all aspects of the resale document process.


Now that you are familiar with section 4109 of NRS 116, how can you as a manager protect yourself from coming under scrutiny from the Ombudsman office and facing potential fines, or even losing your license? It's simple really. If your management company is processing resale documents yourself in-house be sure to review your policies, procedures, and charges to ensure you are compliant. If you have decided to utilize an online service, review all of their policies, procedures, charges, and fees to ensure you are compliant.


If you’re interested in discussing this further or learning more about how we at GetDocsNow handle this issue please reach out. I can be reached at bgreene@getdocsnow.com or to schedule a conversation click here.

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