CHAPTER........
AN ACT relating to real property; revising certain provisions governing claims against
contractors for constructional defects in residences; revising the statutes of
limitation and statutes of repose relating to certain actions on real property;
requiring specified disclosures on the sale of certain residences; revising certain
provisions governing insurance for home protection; and providing other matters
properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Sec. 2.
Except as otherwise provided in this section and NRS 40.670:1. Notwithstanding the provisions of subsection 1 of NRS 40.680, a
claimant may commence an action in district court in a complex matter.
If the claimant commences an action in district court he shall:
(a) File and serve the summons and complaint as required by law;
and
(b) At the same time and in the same manner as the claimant serves
the summons and complaint upon the contractor, serve upon the
contractor a written notice specifying in reasonable detail to the extent
known the defects, and any damages or injuries to each residence or
appurtenance that is the subject of the claim. The notice must describe in
reasonable detail each defect, the specific location of each defect, and the
nature and extent that is known of the damage or injury resulting from
each defect. If an expert opinion has been rendered concerning the
existence or extent of the defects, a written copy of the opinion must
accompany the notice. An expert opinion that specifies each defect to the
extent known, the specific location of each defect to the extent known,
and the nature and extent that is known of the damage or injury
resulting from each defect, based on a valid and reliable representative
sample of the residences and appurtenances involved in the action,
satisfies the requirements of this section.
2. The contractor shall file and serve an answer to the complaint as
required by law.
3. Not later than 30 days after the date of service of the answer to the
complaint, the contractor and claimant shall meet to establish a schedule
for:
(a) The exchange of or reasonable access for the other party to all
relevant reports, photos, correspondence, plans, specifications,
warranties, contracts, subcontracts, work orders for repair, videotapes,
technical reports, soil and other engineering reports and other
documents or materials relating to the claim that are not privileged;
(b) The inspection of the residence or appurtenance that is the subject
of the claim to evaluate the defects set forth in the notice served pursuant
to subsection 1; and
(c) The conduct of any tests that are reasonably necessary to
determine the nature and cause of a defect or any damage or injury, and
the nature and extent of repairs necessary to remedy a defect or any
damage or injury. The party conducting the test shall provide reasonable
notice of the test to all other parties and conduct the test at a reasonable
time.
4. At the meeting held pursuant to subsection 3, the claimant and
contractor shall:
(a) Establish a schedule for the addition of any additional parties to
the complaint or to file any third-party complaint against an additional
party who may be responsible for all or a portion of the defects set forth
in the notice served pursuant to subsection 1;
(b) Unless the claimant and contractor agree otherwise in writing,
select a mediator and proceed with mediation as provided in subsections
2 to 6, inclusive, of NRS 40.680; and
(c) If the claimant and contractor agree, select a special master and
jointly petition the court for his appointment pursuant to subsection 7.
5. Each party added to the complaint or against whom a third-party
complaint is filed pursuant to subsection 4 shall file and serve an answer
as required by law.
6. If the claimant or contractor adds a party to the complaint or files
a third-party complaint, then not later than 60 days after the date
determined pursuant to paragraph (a) of subsection 4, the contractor,
claimant and each party added to the complaint or against whom a
third-party complaint is filed shall meet to establish a schedule for the
activities set forth in paragraphs (a), (b) and (c) of subsection 3.
7. If a special master has not been appointed, the contractor,
claimant or a party added to the complaint or against whom a third-party
complaint is filed may petition the court for the appointment of a special
master at any time after the meeting held pursuant to subsection 3. The
special master may:
(a) Take any action set forth in subsection 4 of NRS 40.680;
(b) Exercise any power set forth in Rule 53 of the Nevada Rules of
Civil Procedure; and
(c) Subject to the provisions of NRS 40.680, if the parties fail to
establish a schedule or determine a date as required in subsection 3, 4 or
6, establish the schedule or determine the date.
8. Unless the mediation required pursuant to paragraph (b) of
subsection 4 is completed or the contractor and claimant have agreed in
writing not to mediate the claim pursuant to paragraph (b) of subsection
4, a party shall not propound interrogatories or requests for admission,
take a deposition or file a motion that is dispositive of the action except:
(a) Upon agreement of the parties; o
(b) With the prior approval of the court or special master.
9. If a residence or appurtenance that is the subject of the claim is
covered by a homeowner’s warranty that is purchased by or on behalf of
a claimant pursuant to NRS 690B.100 to 690B.180, inclusive, a claimant
shall diligently pursue a claim under the contract.
10. Unless the parties agree otherwise, not less than 60 days before
the date of the mediation pursuant to paragraph (b) of subsection 4 is
convened, the contractor shall make a written response to the claimant
that meets the requirements set forth in subsection 3 of NRS 40.645.
11. If the claimant is a representative of a homeowner’s association,
the association shall submit any response made by the contractor to each
member of the association in writing not more than 30 days after the date
the claimant receives the response.
12. The claimant shall respond to the written response of the
contractor within 45 days after the response of the contractor is mailed to
the claimant.
Sec. 3.
Except as otherwise provided in NRS 40.670, if a contractorreceives written notice of a constructional defect that is not part of a
complex matter not more than 1 year after the close of escrow of the
initial purchase of the residence, the contractor shall make the repairs
within 45 days after the contractor receives the written notice unless
completion is delayed by the claimant or by other events beyond the
control of the contractor, or timely completion of repairs is not
reasonably possible. The contractor and claimant may agree in writing to
extend the period prescribed by this section. If the contractor fails to
comply with this section, he is immediately subject to discipline pursuant
to NRS 624.300.
(b) The provisions of NRS 40.600 to 40.695, inclusive, and sections 2
to 6, inclusive, of this act apply to the person after that date.
Sec. 5.
1. Notwithstanding the provisions of NRS 40.600 to 40.695,inclusive, and sections 2, 3, 4 and 6 of this act, a claimant may not
commence an action against a subdivider or master developer for a
constructional defect in an appurtenance constructed on behalf of the
subdivider or master developer in a planned unit development, to the
extent that the appurtenance was constructed by or through a licensed
general contractor, unless:
(a) The subdivider or master developer fails to provide to the claimant
the name, address and telephone number of each contractor hired by the
subdivider or master developer to construct the appurtenance within 30
days of the receipt by the subdivider or master developer of a request
from the claimant for such information; or
(b) After the claimant has made a good faith effort to obtain full
recovery from the contractors hired by the subdivider or master developer
to construct the appurtenance, the claimant has not obtained a full
recovery.
2. All statutes of limitation or repose applicable to a claim governed
by this section are tolled from the time the claimant notifies a contractor
hired by the subdivider or master developer of the claim until the earlier
of the date:
(a) A court determines that the claimant cannot obtain a full recovery
against those contractors; or
(b) The claimant receives notice that those contractors are bankrupt,
insolvent or dissolved.
Tolling pursuant to this subsection applies only to the subdivider or
master developer. Notwithstanding any applicable statute of limitation or
repose, the claimant may commence an action against the subdivider or
master developer for the claim within 1 year after the end of the tolling
described in this subsection.
3. Nothing in this section prohibits the commencement of an action
against a subdivider or master developer for a constructional defect in a
residence sold, designed or constructed by or on behalf of the subdivider
or master developer.
4. Nothing in this section prohibits a person other than the claimant
from commencing an action against a subdivider or master developer to
enforce his own rights.
5. The provisions of this section do not apply to a subdivider or
master developer who acts as a general contractor or uses his license as a
general contractor in the course of constructing the appurtenance that is
6. As used in this section:
(a) "Master developer" means a person who buys, sells or develops a
planned unit development, including, without limitation, a person who
enters into a development agreement pursuant to NRS 278.0201.
(b) "Planned unit development" has the meaning ascribed to it in
NRS 278A.065.
(c) "Subdivider" has the meaning ascribed to it in NRS 278.0185.
Sec. 6.
1. If a claimant attempts to sell a residence that is or hasbeen the subject of a claim governed by NRS 40.600 to 40.695, inclusive,
and sections 2 to 6, inclusive, of this act, he shall disclose, in writing, to
any prospective purchaser of the residence, not less than 30 days before
the close of escrow for the sale of the residence or, if escrow is to close
less than 30 days after the execution of the sales agreement, then
immediately upon the execution of the sales agreement or, if a claim is
initiated less than 30 days before the close of escrow, within 24 hours
after giving written notice to the contractor pursuant to subsection 1 of
NRS 40.645 or subsection 1 of section 2 of this act:
(a) All notices given by the claimant to the contractor pursuant to
NRS 40.600 to 40.695, inclusive, and sections 2 to 6, inclusive, of this act
that are related to the residence;
(b) All opinions the claimant has obtained from experts regarding a
constructional defect that is or has been the subject of the claim;
(c) The terms of any settlement, order or judgment relating to the
claim; and
(d) A detailed report of all repairs made to the residence by or on
behalf of the claimant as a result of a constructional defect that is or has
been the subject of the claim.
2. Before taking any action on a claim pursuant to NRS 40.600 to
40.695, inclusive, and sections 2 to 6, inclusive, of this act, the attorney
for a claimant shall notify the claimant in writing of the provisions of
this section.
Sec. 7. NRS 40.600 is hereby amended to read as follows:
and sections 2 toSec. 8. NRS 40.605 is hereby amended to read as follows:
1. "Appurtenance" means a structure, installation, facilitySec. 8.5. NRS 40.625 is hereby amended to read as follows:
The term includes a warranty contract issued by a risk retention group that
operates in compliance with chapter 695E of NRS and insures all or any
part of the liability of a contractor for the cost to repair a constructional
defect in a residence.
Sec. 9. NRS 40.645 is hereby amended to read as follows:
Sec. 10. NRS 40.650 is hereby amended to read as follows:
40.650 1. If a claimant unreasonably rejects a reasonable written
offer of settlement
made as part of a response made pursuant to NRS40.645
or section 2 of this act or does not permit the contractor orindependent contractor a reasonable opportunity to repair the defect
pursuant to an accepted offer of settlement and thereafter commences an
action governed by NRS 40.600 to 40.695, inclusive,
and sections 2 to 6,inclusive, of this act,
the court in which the action is commenced may:(a) Deny the claimant’s attorney’s fees and costs; and
(b) Award attorney’s fees and costs to the contractor.
Any sums paid under a homeowner’s warranty, other than sums paid in
satisfaction of claims that are collateral to any coverage issued to or by the
contractor, must be deducted from any recovery.
2. If a contractor fails to:
(a) Make an offer of settlement;
(b) Make a good faith response to the claim asserting no liability;
(c) Complete, in a good and workmanlike manner, the repairs specified
in an accepted offer;
(d) Agree to a mediator or accept the appointment of a mediator
pursuant to NRS 40.680
(e) Participate in mediation,
the limitations on damages and defenses to liability provided in NRS
40.600 to 40.695, inclusive,
and sections 2 to 6, inclusive, of this act donot apply and the claimant may commence an action without satisfying any
other requirement of NRS 40.600 to 40.695, inclusive
to 6, inclusive, of this act.
3. If coverage under a homeowner’s warranty is denied by an insurer in
bad faith, the homeowner and the contractor have a right of action for the
sums that would have been paid if coverage had been provided, plus
reasonable attorney’s fees and costs.
Sec. 11. NRS 40.660 is hereby amended to read as follows:
:Sec. 12. NRS 40.685 is hereby amended to read as follows:
Sec. 12.5. NRS 40.687 is hereby amended to read as follows:
1. A claimant shall, within 10 days after commencing an action against
a contractor, disclose to the contractor all information about any
homeowner’s warranty that is applicable to the claim.
2. The contractor shall, no later than 10 days after
a response is made pursuant to this chapter, disclose to the claimant any
information about insurance agreements that may be obtained by discovery
pursuant to rule 26(b)(2) of the Nevada Rules of Civil Procedure. Such
disclosure does not affect the admissibility at trial of the information
disclosed.
3. Except as otherwise provided in subsection 4, if either party fails to
provide the information required pursuant to subsection 1 or 2 within the
time allowed, the other party may petition the court to compel production of
the information. Upon receiving such a petition, the court may order the
party to produce the required information and may award the petitioning
party reasonable attorney’s fees and costs incurred in petitioning the court
pursuant to this subsection.
4. The parties may agree to an extension of time to produce the
information required pursuant to this section.
5. For the purposes of this section, "information about insurance
agreements" is limited to any declaration sheets, endorsements and
contracts of insurance issued to the contractor from the commencement of
construction of the residence of the claimant to the date on which the
request for the information is made and does not include information
concerning any disputes between the contractor and an insurer or
information concerning any reservation of rights by an insurer.
Sec. 13. NRS 40.690 is hereby amended to read as follows:
governed by NRS 40.600 to 40.695, inclusive,Sec. 14. NRS 40.695 is hereby amended to read as follows:
2. If none of the events described in subsection 1 occurs, the date of
substantial completion of an improvement to real property must be
determined by the rules of the common law.
Sec. 16. NRS 11.203 is hereby amended to read as follows:
Sec. 17.
NRS 11.204 is hereby amended to read as follows:Sec. 18. NRS 11.205 is hereby amended to read as follows:
Sec. 19. Chapter 113 of NRS is hereby amended by adding thereto a
new section to read as follows:
1. Upon signing a sales agreement with the initial purchaser of
residential property that was not occupied by the purchaser for more
than 120 days after substantial completion of the construction of the
residential property, the seller shall:
(a) Provide to the initial purchaser a copy of NRS 11.202 to 11.206,
inclusive, and section 15 of this act and NRS 40.600 to 40.695, inclusive,
and sections 2 to 6, inclusive, of this act;
(b) Notify the initial purchaser of any soil report prepared for the
residential property or for the subdivision in which the residential
property is located; and
(c) If requested in writing by the initial purchaser not later than 5
days after signing the sales agreement, provide to the purchaser without
cost each report described in paragraph (b) not later than 5 days after the
seller receives the written request.
2. Not later than 20 days after receipt of all reports pursuant to
paragraph (c) of subsection 1, the initial purchaser may rescind the sales
agreement.
3. The initial purchaser may waive his right to rescind the sales
agreement pursuant to subsection 2. Such a waiver is effective only if it is
made in a written document that is signed by the purchaser.
Sec. 20.
NRS 113.100 is hereby amended to read as follows:Sec. 21. NRS 624.300 is hereby amended to read as follows:
Sec. 22. NRS 690B.100 is hereby amended to read as follows:
Sec. 23. NRS 690B.140 is hereby amended to read as follows:
Sec. 24. NRS 690B.160 is hereby amended to read as follows:
Sec. 25. NRS 690B.180 is hereby amended to read as follows:
Sec. 26. The amendatory provisions of this act do not apply to a claim
initiated or an action commenced pursuant to NRS 40.600 to 40.695,
inclusive, and sections 2 to 6, inclusive, of this act, unless the claim was
initiated or the action was commenced on or after July 1, 1999.
Sec. 27. This act becomes effective on July 1, 1999.
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