1. A special declarants right created or reserved under this chapter may be transferred only by an instrument evidencing the transfer recorded in every county in which any portion of the common-interest community is located. Except as otherwise provided in subsection 3, the instrument is not effective unless executed by the transferee. 2. Upon transfer of any special declarants right, the liability of a transferor declarant is as follows: (a) A transferor is not relieved of any obligation or liability arising before the transfer and remains liable for warranties imposed upon the transferor by this chapter. Lack of privity does not deprive any units owner of standing to maintain an action to enforce any obligation of the transferor. (b) If a successor to any special declarants right is an affiliate of a declarant, the transferor is jointly and severally liable with the successor for any obligations or liabilities of the successor relating to the common-interest community. (c) If a transferor retains any special declarants rights, but transfers other special declarants rights to a successor who is not an affiliate of the declarant, the transferor is liable for any obligations or liabilities imposed on a declarant by this chapter or by the declaration relating to the retained special declarants rights and arising after the transfer. (d) A transferor has no liability for any act or omission or any breach of a contractual obligation or warranty arising from the exercise of a special declarants right by a successor declarant who is not an affiliate of the transferor. 3. Unless otherwise provided in a mortgage, deed of trust or other agreement creating a security interest, in case of foreclosure of a security interest, sale by a trustee under an agreement creating a security interest, tax sale, judicial sale or sale under the Bankruptcy Code or a receivership, of any units owned by a declarant or real estate in a common-interest community subject to developmental rights, a person acquiring title to all the property being foreclosed or sold succeeds to all special declarants rights related to that property held by that declarant and the instrument conveying title need not be executed by the transferee to be effective. If the person acquiring title to the property being foreclosed or sold pursuant to this section desires to succeed to some but not all of the special declarants rights or none of the special declarants rights, then the judgment or instrument conveying title may provide for transfer of only the special declarants rights requested, in which case the transferee shall succeed only to any special declarants rights requested and such judgment or instrument must be executed by the transferee to be effective. 4. Upon foreclosure of a security interest, sale by a trustee under an agreement creating a security interest, tax sale, judicial sale or sale under the Bankruptcy Code or a receivership of all interests in a common-interest community owned by a declarant: (a) The declarant ceases to have any special declarants rights; and (b) The period of declarants control ( NRS 116.31032 ) terminates unless the judgment or instrument conveying title provides for transfer of all special declarants rights held by that declarant to a successor declarant.
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