Assembly Bill No. 482–Assemblymen Anderson, Manendo, Leslie, Parks, Freeman, Collins, Claborn, McClain, Koivisto, Ohrenschall and Carpenter

March 11, 1999

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Referred to Committee on Judiciary

 

SUMMARY—Makes various changes to provisions governing actions resulting from constructional defects. (BDR 3-1115)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: No.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

 

AN ACT relating to actions concerning property; requiring a contractor to cure a defect in certain homes within a certain period after receiving notice of the defect; eliminating the limitation on the liability of a contractor for constructional defects under certain circumstances; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. Chapter 40 of NRS is hereby amended by adding thereto a

1-2 new section to read as follows:

1-3 1. Except as otherwise provided in NRS 40.670, a contractor who

1-4 receives written notice of a constructional defect resulting from work

1-5 performed by the contractor or his agent, employee or subcontractor on a

1-6 residence or appurtenance on which construction was completed less

1-7 than 1 year before the date the contractor received the notice shall cure

1-8 the defect within 45 days after receiving the notice.

1-9 2. The contractor shall not cure the defect by:

1-10 (a) Making repairs for which the contractor is not licensed; or

1-11 (b) Causing repairs to be made by a person who is not licensed to

1-12 make the repairs.

1-13 3. If the contractor fails to cure the defect within 45 days after

1-14 receiving notice of the defect, the owner of the residence or appurtenance

1-15 may:

2-1 (a) Have the defect cured; and

2-2 (b) Recover from the contractor:

2-3 (1) The reasonable cost of the repairs;

2-4 (2) Reasonable attorney’s fees and costs; and

2-5 (3) Any other damages recoverable pursuant to any other law.

2-6 Sec. 2. NRS 40.600 is hereby amended to read as follows:

2-7 40.600 As used in NRS 40.600 to 40.695, inclusive, and section 1 of

2-8 this act, unless the context otherwise requires, the words and terms defined

2-9 in NRS 40.605 to 40.630, inclusive, have the meanings ascribed to them in

2-10 those sections.

2-11 Sec. 3. NRS 40.645 is hereby amended to read as follows:

2-12 40.645 Except as otherwise provided in this section and NRS 40.670

2-13 [:] and section 1 of this act:

2-14 1. At least 60 days before a claimant commences an action against a

2-15 contractor for damages arising from a constructional defect, the claimant

2-16 must give written notice by certified mail, return receipt requested, to the

2-17 contractor, at the contractor’s last known address, specifying in reasonable

2-18 detail the defects or any damages or injuries to each residence or each unit

2-19 within a multiple-unit residence that is the subject of the claim. The notice

2-20 must describe in reasonable detail the cause of the defects if the cause is

2-21 known, and the nature and extent that is known of the damage or injury

2-22 resulting from the defects. In a complex matter, an expert opinion

2-23 concerning the cause of the defects and the nature and extent of the

2-24 damage or injury resulting from the defects based on a representative

2-25 sample of the residences or of the units of each multiple-unit residence

2-26 involved in the action satisfies the requirements of this section. During the

2-27 35-day period after the contractor receives the notice, on his written

2-28 request, the contractor is entitled to inspect the property that is the subject

2-29 of the claim to determine the nature and cause of the defect, damage or

2-30 injury and the nature and extent of repairs necessary to remedy the defect.

2-31 The contractor shall, before making the inspection, provide reasonable

2-32 notice of the inspection and must make the inspection at a reasonable time.

2-33 The contractor may take reasonable steps to establish the existence of the

2-34 defect.

2-35 2. If the residence is covered by a homeowner’s warranty, a claimant

2-36 must diligently pursue a claim under the warranty or contract.

2-37 3. Within 45 days after the contractor receives the notice, the

2-38 contractor may make a written offer of settlement to the claimant. The

2-39 offer:

2-40 (a) Must be served to the claimant by certified mail, return receipt

2-41 requested, at the claimant’s last known address.

3-1 (b) Must respond to each constructional defect set forth in the

3-2 claimant’s notice, and describe in reasonable detail the cause of the defect,

3-3 if known, the nature and extent of the damage or injury resulting from the

3-4 defect, and, unless the offer is limited to a proposal for monetary

3-5 compensation, the method, adequacy and estimated cost of the proposed

3-6 repair.

3-7 (c) May include:

3-8 (1) A proposal for monetary compensation.

3-9 (2) If the contractor is licensed to make the repairs, an agreement by

3-10 the contractor to make the repairs.

3-11 (3) An agreement by the contractor to cause the repairs to be made, at

3-12 the contractor’s expense, by another contractor who is licensed to make the

3-13 repairs, bonded and insured.

3-14 The repairs must be made within 45 days after the contractor receives

3-15 written notice of acceptance of the offer, unless completion is delayed by

3-16 the claimant or by other events beyond the control of the contractor. The

3-17 claimant and the contractor may agree in writing to extend the periods

3-18 prescribed by this section.

3-19 4. The periods provided in subsections 1 and 3 must be extended by 60

3-20 days if the claim is a complex matter. The parties may stipulate to a further

3-21 extension.

3-22 5. Not later than 15 days before the mediation required pursuant to

3-23 NRS 40.680 and upon providing 15 days’ notice, each party shall provide

3-24 the other party, or shall make a reasonable effort to assist the other party to

3-25 obtain, all relevant reports, photos, correspondence, plans, specifications,

3-26 warranties, contracts, subcontracts, work orders for repair, videotapes and

3-27 soil and other engineering reports that are not privileged.

3-28 6. If the claimant is a representative of a homeowner’s association, the

3-29 association shall submit any offer of settlement made by the contractor to

3-30 each member of the association.

3-31 Sec. 4. NRS 40.655 is hereby amended to read as follows:

3-32 40.655 1. Except as otherwise provided in subsection 4 and NRS

3-33 40.650 [,] and section 1 of this act, in a claim governed by NRS 40.600 to

3-34 40.695, inclusive, the claimant may recover only the following damages to

3-35 the extent proximately caused by a constructional defect:

3-36 (a) Any reasonable attorney’s fees;

3-37 (b) The reasonable cost of any repairs already made that were necessary

3-38 and of any repairs yet to be made that are necessary to cure any

3-39 constructional defect that the contractor failed to cure and the reasonable

3-40 expenses of temporary housing reasonably necessary during the repair;

3-41 (c) The reduction in market value of the residence or accessory

3-42 structure, if any, to the extent the reduction is because of structural failure;

4-1 (d) The loss of the use of all or any part of the residence;

4-2 (e) The reasonable value of any other property damaged by the

4-3 constructional defect;

4-4 (f) Any additional costs reasonably incurred by the claimant, including,

4-5 but not limited to, any costs and fees incurred for the retention of experts

4-6 to:

4-7 (1) Ascertain the nature and extent of the constructional defects;

4-8 (2) Evaluate appropriate corrective measures to estimate the value of

4-9 loss of use; and

4-10 (3) Estimate the value of loss of use, the cost of temporary housing

4-11 and the reduction of market value of the residence; and

4-12 (g) Any interest provided by statute.

4-13 2. The amount of any attorney’s fees awarded pursuant to this section

4-14 must be approved by the court.

4-15 3. If a contractor complies with the provisions of NRS 40.600 to

4-16 40.695, inclusive, the claimant may not recover from the contractor, as a

4-17 result of the constructional defect, anything other than that which is

4-18 provided pursuant to NRS 40.600 to 40.695, inclusive.

4-19 4. The provisions of this section apply only if:

4-20 (a) The construction of the residence or appurtenance was directly

4-21 supervised by a general contractor licensed in this state; and

4-22 (b) The repairs performed to cure a constructional defect were

4-23 supervised by a person who had knowledge of the building codes that

4-24 were applicable to the residence or appurtenance.

4-25 5. As used in this section, "structural failure" means physical damage

4-26 to the load-bearing portion of a residence or appurtenance caused by a

4-27 failure of the load-bearing portion of the residence or appurtenance.

4-28 Sec. 5. The amendatory provisions of this act apply to a constructional

4-29 defect specified in section 1 of this act for which written notice is given on

4-30 or after October 1, 1999.

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