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).

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

1-2 the provisions set forth as sections 2 to 6, inclusive, of this act.

1-3 Sec. 2. Except as otherwise provided in this section and NRS 40.670:

1-4 1. Notwithstanding the provisions of subsection 1 of NRS 40.680, a

1-5 claimant may commence an action in district court in a complex matter.

1-6 If the claimant commences an action in district court he shall:

1-7 (a) File and serve the summons and complaint as required by law;

1-8 and

1-9 (b) At the same time and in the same manner as the claimant serves

1-10 the summons and complaint upon the contractor, serve upon the

1-11 contractor a written notice specifying in reasonable detail the defects or

1-12 any damages or injuries to each residence that is the subject of the claim.

1-13 The notice must describe in reasonable detail each defect to the extent

1-14 known, the specific location of each defect to the extent known, and the

1-15 nature and extent that is known of the damage or injury resulting from

1-16 each defect. If an expert opinion has been rendered concerning the

2-1 existence or extent of the defects, a written copy of the opinion must

2-2 accompany the notice. An expert opinion that specifies each defect to the

2-3 extent known, the specific location of each defect to the extent known,

2-4 and the nature and extent that is known of the damage or injury

2-5 resulting from each defect, based on a representative sample of the

2-6 residences involved in the action, satisfies the requirements of this

2-7 section.

2-8 2. The contractor shall file and serve an answer to the complaint as

2-9 required by law.

2-10 3. Not later than 30 days after the date of service of the answer to the

2-11 complaint, the contractor and claimant shall meet to establish a schedule

2-12 for:

2-13 (a) The exchange of or reasonable access for the other party to all

2-14 relevant reports, photos, correspondence, plans, specifications,

2-15 warranties, contracts, subcontracts, work orders for repair, videotapes,

2-16 technical reports, soil and other engineering reports and other

2-17 documents or materials relating to the claim that are not privileged;

2-18 (b) The inspection of the residence that is the subject of the claim to

2-19 evaluate the defects set forth in the notice served pursuant to subsection

2-20 1; and

2-21 (c) The conduct of any tests that are reasonably necessary to

2-22 determine the nature and cause of a defect or any damage or injury, and

2-23 the nature and extent of repairs necessary to remedy a defect or any

2-24 damage or injury. The party conducting the test shall provide reasonable

2-25 notice of the test to all other parties and conduct the test at a reasonable

2-26 time.

2-27 4. At the meeting held pursuant to subsection 3, the claimant and

2-28 contractor shall:

2-29 (a) Determine a date by which each party must add any additional

2-30 parties to the complaint or file any third-party complaint against an

2-31 additional party who may be responsible for all or a portion of the defects

2-32 set forth in the notice served pursuant to subsection 1;

2-33 (b) Unless the claimant and contractor agree otherwise in writing,

2-34 select a mediator and proceed with mediation as provided in subsections

2-35 2 to 6, inclusive, of NRS 40.680; and

2-36 (c) If the claimant and contractor agree, select a special master and

2-37 jointly petition the court for his appointment pursuant to subsection 7.

2-38 5. Each party added to the complaint or against whom a third-party

2-39 complaint is filed pursuant to subsection 4 shall file and serve an answer

2-40 as required by law.

2-41 6. If the claimant or contractor adds a party to the complaint or files

2-42 a third-party complaint, then not later than 60 days after the date

2-43 determined pursuant to paragraph (a) of subsection 4, the contractor,

3-1 claimant and each party added to the complaint or against whom a

3-2 third-party complaint is filed shall meet to establish a schedule for the

3-3 activities set forth in paragraphs (a), (b) and (c) of subsection 3.

3-4 7. If a special master has not been appointed, the contractor,

3-5 claimant or a party added to the complaint or against whom a third-party

3-6 complaint is filed may petition the court for the appointment of a special

3-7 master at any time after the meeting held pursuant to subsection 3. The

3-8 special master may:

3-9 (a) Take any action set forth in subsection 4 of NRS 40.680;

3-10 (b) Exercise any power set forth in Rule 53 of the Nevada Rules of

3-11 Civil Procedure; and

3-12 (c) If the parties fail to establish a schedule or determine a date as

3-13 required in subsection 3, 4 or 6, establish the schedule or determine the

3-14 date.

3-15 8. Unless the mediation required pursuant to paragraph (b) of

3-16 subsection 4 is completed or the contractor and claimant have agreed in

3-17 writing not to mediate the claim pursuant to paragraph (b) of subsection

3-18 4, a party shall not propound interrogatories or requests for admission,

3-19 take a deposition or file a motion that is dispositive of the action except:

3-20 (a) Upon agreement of the parties; or

3-21 (b) With the prior approval of the court or special master.

3-22 9. If a residence that is the subject of the claim is covered by a

3-23 homeowner’s warranty that is purchased by a claimant pursuant to NRS

3-24 690B.100 to 690B.180, inclusive, a claimant shall diligently pursue a

3-25 claim under the contract.

3-26 10. Unless the parties agree otherwise, not less than 45 days before

3-27 the date of the mediation pursuant to paragraph (b) of subsection 4 is

3-28 convened, the contractor shall make a written offer of settlement to the

3-29 claimant that meets the requirements set forth in subsection 3 of NRS

3-30 40.645.

3-31 11. If the claimant is a representative of a homeowner’s association,

3-32 the association shall submit any offer of settlement made by the

3-33 contractor to each member of the association in writing not more than 30

3-34 days after the date the claimant receives the offer of settlement.

3-35 12. The claimant shall respond to the written offer of settlement

3-36 within 45 days after the offer is mailed to the claimant.

3-37 Sec. 3. Except as otherwise provided in NRS 40.670, if a contractor

3-38 receives written notice of a constructional defect that is not part of a

3-39 complex matter not more than 1 year after the close of escrow of the

3-40 initial purchase of the residence, the contractor shall make the repairs

3-41 within 45 days after the contractor receives the written notice unless

3-42 completion is delayed by the claimant or by other events beyond the

3-43 control of the contractor, or timely completion of repairs is not

4-1 reasonably possible. The contractor and claimant may agree in writing to

4-2 extend the period prescribed by this section. If the contractor fails to

4-3 comply with this section, he is immediately subject to discipline pursuant

4-4 to NRS 624.300.

4-5 Sec. 4. If, after complying with the procedural requirements of NRS

4-6 40.645 and 40.680, or section 2 of this act, a claimant proceeds with an

4-7 action for damages arising from a constructional defect:

4-8 1. The claimant and each contractor who is named in the original

4-9 complaint when the action is commenced are not required, while the

4-10 action is pending, to comply with the requirements of NRS 40.645 or

4-11 40.680, or section 2 of this act, for any constructional defect that the

4-12 claimant includes in an amended complaint, if the constructional defect:

4-13 (a) Is attributable, in whole or in part, to such a contractor;

4-14 (b) Is located on the same property described in the original

4-15 complaint; and

4-16 (c) Was not discovered before the action was commenced provided

4-17 that a good faith effort had been undertaken by the claimant.

4-18 2. The claimant is not required to give written notice of a defect

4-19 pursuant to subsection 1 of NRS 40.645 or subsection 1 of section 2 of

4-20 this act to any person who is joined to or intervenes in the action as a

4-21 party after it is commenced. If such a person becomes a party to the

4-22 action:

4-23 (a) For the purposes of subsection 1 of NRS 40.645 or subsection 1 of

4-24 section 2 of this act, the person shall be deemed to have been given notice

4-25 of the defect by the claimant on the date on which the person becomes a

4-26 party to the action; and

4-27 (b) The provisions of NRS 40.600 to 40.695, inclusive, and sections 2

4-28 to 6, inclusive, of this act apply to the person after that date.

4-29 Sec. 5. 1. Notwithstanding the provisions of NRS 40.600 to 40.695,

4-30 inclusive, and sections 2, 3, 4 and 6 of this act, an action may not be

4-31 commenced against a subdivider or master developer for a constructional

4-32 defect in an appurtenance constructed on behalf of the subdivider or

4-33 master developer in a planned unit development, to the extent that the

4-34 appurtenance was constructed by or through a licensed contractor,

4-35 unless, after the claimant has made a good faith effort to obtain full

4-36 recovery from the contractors hired by the subdivider or master developer

4-37 to construct the appurtenance, the claimant has not obtained a full

4-38 recovery.

4-39 2. All statutes of limitation or repose applicable to a claim governed

4-40 by this section are tolled from the time the claimant notifies a contractor

4-41 hired by the subdivider or master developer of the claim until the earlier

4-42 of the date:

5-1 (a) A court determines that the claimant cannot obtain a full recovery

5-2 against those contractors; or

5-3 (b) The claimant receives notice that those contractors are bankrupt,

5-4 insolvent or dissolved.

5-5 Tolling pursuant to this subsection applies only to the subdivider or

5-6 master developer. Notwithstanding any applicable statute of limitation or

5-7 repose, the claimant may commence an action against the subdivider or

5-8 master developer for the claim within 1 year after the end of the tolling

5-9 described in this subsection.

5-10 3. Nothing in this section prohibits the commencement of an action

5-11 against a subdivider or master developer for a constructional defect in a

5-12 residence sold, designed or constructed by or on behalf of the subdivider

5-13 or master developer.

5-14 4. As used in this section

5-15 (a) "Master developer" means a person who buys, sells, develops or

5-16 acts as a broker for a planned unit development pursuant to an

5-17 agreement for development of land entered into pursuant to NRS

5-18 278.0201.

5-19 (b) "Planned unit development" has the meaning ascribed to it in

5-20 NRS 278A.065.

5-21 (c) "Subdivider" has the meaning ascribed to it in NRS 278.0185.

5-22 Sec. 6. 1. If a claimant attempts to sell a residence that has been

5-23 the subject of a claim governed by NRS 40.600 to 40.695, inclusive, and

5-24 sections 2 to 6, inclusive, of this act, he shall disclose, in writing, to any

5-25 prospective purchaser of the residence, not less than 30 days before the

5-26 close of escrow for the sale of the residence or, if escrow is to close less

5-27 than 30 days after the execution of the sales agreement, then immediately

5-28 upon the execution of the sales agreement or, if a claim is initiated less

5-29 than 30 days before the close of escrow, within 24 hours after giving

5-30 written notice to the contractor pursuant to subsection 1 of NRS 40.645

5-31 or subsection 1 of section 2 of this act:

5-32 (a) All notices given by the claimant to the contractor pursuant to

5-33 NRS 40.600 to 40.695, inclusive, and sections 2 to 6, inclusive, of this act

5-34 that are related to the residence;

5-35 (b) All opinions the claimant has obtained from experts regarding a

5-36 constructional defect that has been the subject of the claim;

5-37 (c) The terms of any settlement, order or judgment relating to the

5-38 claim; and

5-39 (d) A detailed report of all repairs made to the residence by or on

5-40 behalf of the claimant as a result of a constructional defect that has been

5-41 the subject of the claim.

5-42 2. Before taking any action on a claim pursuant to NRS 40.600 to

5-43 40.695, inclusive, and sections 2 to 6, inclusive, of this act, the attorney

6-1 for a claimant shall notify the claimant in writing of the provisions of

6-2 this section.

6-3 Sec. 7. NRS 40.600 is hereby amended to read as follows:

6-4 40.600 As used in NRS 40.600 to 40.695, inclusive, and sections 2 to

6-7 ascribed to them in those sections.

6-8 Sec. 8. NRS 40.605 is hereby amended to read as follows:

6-9 40.605 1. "Appurtenance" means a structure, installation, facility [or]

6-16 associated with [a residence.] or benefiting one or more residences.

6-17 2. As used in this section:

6-18 (a) "Common elements" has the meaning ascribed to it in NRS

6-19 116.110318.

6-20 (b) "Limited common element" has the meaning ascribed to it in NRS

6-21 116.110355.

6-22 Sec. 9. NRS 40.645 is hereby amended to read as follows:

6-23 40.645 Except as otherwise provided in this section and NRS 40.670:

6-43 shall, before making the inspection, provide reasonable notice of the

7-1 inspection and [must] shall make the inspection at a reasonable time. The

7-2 contractor may take reasonable steps to establish the existence of the

7-3 defect.

7-4 2. If [the] a residence that is the subject of the claim is covered by a

7-5 homeowner’s warranty [,] that is purchased by a claimant pursuant to

7-6 NRS 690B.100 to 690B.180, inclusive, a claimant [must] shall diligently

7-7 pursue a claim under the [warranty or] contract.

7-8 3. Within 45 days after the contractor receives the notice, the

7-9 contractor may make a written offer of settlement to the claimant. The

7-10 offer:

7-11 (a) Must be served to the claimant by certified mail, return receipt

7-12 requested, at the claimant’s last known address.

7-13 (b) Must respond to each constructional defect set forth in the claimant’s

7-14 notice, and describe in reasonable detail the cause of the defect, if known,

7-15 the nature and extent of the damage or injury resulting from the defect, and,

7-16 unless the offer is limited to a proposal for monetary compensation, the

7-17 method, adequacy and estimated cost of the proposed repair.

7-18 (c) May include:

7-19 (1) A proposal for monetary compensation.

7-20 (2) If the contractor is licensed to make the repairs, an agreement by

7-21 the contractor to make the repairs.

7-22 (3) An agreement by the contractor to cause the repairs to be made, at

7-23 the contractor’s expense, by another contractor who is licensed to make the

7-24 repairs, bonded and insured.

7-25 The repairs must be made within 45 days after the contractor receives

7-26 written notice of acceptance of the offer, unless completion is delayed by

7-27 the claimant or by other events beyond the control of the contractor. The

7-28 claimant and the contractor may agree in writing to extend the periods

7-29 prescribed by this section.

7-30 4. [The periods provided in subsections 1 and 3 must be extended by

7-31 60 days if the claim is a complex matter. The parties may stipulate to a

7-32 further extension.

7-33 5.] Not later than 15 days before the mediation required pursuant to

7-34 NRS 40.680 and upon providing 15 days’ notice, each party shall provide

7-35 the other party, or shall make a reasonable effort to assist the other party to

7-36 obtain, all relevant reports, photos, correspondence, plans, specifications,

7-37 warranties, contracts, subcontracts, work orders for repair, videotapes [and]

7-38 , technical reports, soil and other engineering reports and other documents

7-39 or materials relating to the claim that are not privileged.

7-40 [6.] 5. If the claimant is a representative of a homeowner’s association,

7-41 the association shall submit any offer of settlement made by the contractor

7-42 to each member of the association.

8-1 Sec. 10. NRS 40.650 is hereby amended to read as follows:

8-2 40.650 1. If a claimant unreasonably rejects a reasonable written

8-30 reasonable attorney’s fees and costs.

8-31 Sec. 11. NRS 40.660 is hereby amended to read as follows:

8-32 40.660 An offer of settlement that is not accepted within :

8-39 settlement under this section may be filed with the court.

8-40 Sec. 12. NRS 40.685 is hereby amended to read as follows:

8-41 40.685 1. Except as otherwise provided in subsection 2, a written

8-43 has corrected or otherwise repaired a constructional defect does not bar a

9-1 claim for the constructional defect if it is determined that the contractor

9-2 failed to correct or repair the defect properly.

9-3 2. The provisions of subsection 1 do not apply to any written waiver or

9-4 settlement agreement described in subsection 1, unless:

9-5 (a) The claimant has obtained the opinion of an expert concerning the

9-6 constructional defect;

9-7 (b) The claimant has provided the contractor with a written notice of the

9-8 defect pursuant to NRS 40.645 or section 2 of this act and a copy of the

9-9 expert’s opinion; and

9-10 (c) The claimant and the contractor have complied with the

9-11 requirements for inspection and repair as provided in NRS 40.600 to

9-12 40.695, inclusive [.] , and sections 2 to 6, inclusive, of this act.

9-13 3. If a claimant does not prevail in any action which is not barred

9-14 pursuant to this section, the court may:

9-15 (a) Deny the claimant’s attorney’s fees, fees for an expert witness or

9-16 costs; and

9-17 (b) Award attorney’s fees and costs to the contractor.

9-18 Sec. 13. NRS 40.690 is hereby amended to read as follows:

9-19 40.690 1. A claim governed by NRS 40.600 to 40.695, inclusive,

9-36 were a contractor [.] and the party requiring him to appear were a

9-37 claimant. The party must receive notice of the proceedings from the

9-38 contractor or claimant.

9-39 Sec. 14. NRS 40.695 is hereby amended to read as follows:

9-40 40.695 1. [All] Except as otherwise provided in subsection 2,

9-43 sections 2 to 6, inclusive, of this act are tolled from the time notice of the

10-1 claim is given, until 30 days after mediation is concluded or waived in

10-2 writing pursuant to NRS 40.680 [.] or subsection 4 of section 2 of this act.

10-3 2. Tolling under this section applies [to] :

10-4 (a) Only to a claim that is not a complex matter.

10-5 (b) To a third party regardless of whether the party is required to appear

10-6 in the proceeding.

10-7 Sec. 15. Chapter 11 of NRS is hereby amended by adding thereto a

10-8 new section to read as follows:

10-9 1. Except as otherwise provided in subsection 2, for the purposes of

10-10 this section and NRS 11.202 to 11.206, inclusive, the date of substantial

10-11 completion of an improvement to real property shall be deemed to be the

10-12 date on which:

10-13 (a) The final building inspection of the improvement is conducted;

10-14 (b) A notice of completion is issued for the improvement; or

10-15 (c) A certificate of occupancy is issued for the improvement,

10-16 whichever occurs later.

10-17 2. If none of the events described in subsection 1 occurs, the date of

10-18 substantial completion of an improvement to real property must be

10-19 determined by the rules of the common law.

10-20 Sec. 16. NRS 11.203 is hereby amended to read as follows:

10-21 11.203 1. Except as otherwise provided in this section and NRS

10-40 substantial completion of the improvement.

10-41 3. The provisions of this section do not apply to a claim for

10-42 indemnity or contribution.

11-1 Sec. 17. NRS 11.204 is hereby amended to read as follows:

11-2 11.204 1. Except as otherwise provided in this section and NRS

11-25 deficiency which is not apparent by reasonable inspection.

11-26 Sec. 18. NRS 11.205 is hereby amended to read as follows:

11-27 11.205 1. Except as otherwise provided in this section and NRS

11-43 such injury or damages for breach of contract may be commenced within 2

12-1 years after the date of such injury, irrespective of the date of death, but in

12-2 no event may an action be commenced more than 8 years after the

12-3 substantial completion of the improvement.

12-4 3. The provisions of this section do not apply to a claim for

12-5 indemnity or contribution.

12-6 4. For the purposes of this section, "patent deficiency" means a

12-7 deficiency which is apparent by reasonable inspection.

12-8 Sec. 19. Chapter 113 of NRS is hereby amended by adding thereto a

12-9 new section to read as follows:

12-10 1. Upon signing a sales agreement with the initial purchaser of

12-11 residential property that was not occupied by the purchaser for more

12-12 than 120 days after substantial completion of the construction of the

12-13 residential property, the seller shall:

12-14 (a) Provide to the initial purchaser a copy of NRS 11.202 to 11.206,

12-15 inclusive, and section 15 of this act and NRS 40.600 to 40.695, inclusive,

12-16 and sections 2 to 6, inclusive, of this act;

12-17 (b) Notify the initial purchaser of any soil report prepared for the

12-18 residential property or for the subdivision in which the residential

12-19 property is located; and

12-20 (c) If requested in writing by the initial purchaser not later than 5

12-21 days after signing the sales agreement, provide to the purchaser without

12-22 cost each report described in paragraph (b) not later than 5 days after the

12-23 seller receives the written request.

12-24 2. Not later than 20 days after receipt of all reports pursuant to

12-25 paragraph (c) of subsection 1, the initial purchaser may rescind the sales

12-26 agreement.

12-27 3. The initial purchaser may waive his right to rescind the sales

12-28 agreement pursuant to subsection 2. Such a waiver is effective only if it is

12-29 made in a written document that is signed by the purchaser and

12-30 notarized.

12-31 Sec. 20. NRS 113.100 is hereby amended to read as follows:

12-32 113.100 As used in NRS 113.100 to 113.150, inclusive, and section

12-43 affixed not less than one nor more than four dwelling units.

13-1 5. "Seller" means a person who sells or intends to sell any residential

13-2 property.

13-3 Sec. 21. NRS 624.300 is hereby amended to read as follows:

13-4 624.300 1. Except as otherwise provided in subsection 6, the board

13-42 settled, mediated or otherwise resolved pursuant to NRS 40.600 to 40.695,

14-1 inclusive, and sections 2 to 6, inclusive, of this act, unless the disciplinary

14-2 action is necessary to protect the public health or safety.

14-3 7. If discipline is imposed pursuant to this section, the costs of the

14-4 proceeding, including investigative costs and attorney’s fees, may be

14-5 recovered by the board.

14-6 Sec. 22. NRS 690B.100 is hereby amended to read as follows:

14-7 690B.100 As used in NRS 690B.100 to 690B.180, inclusive, unless

14-23 insures against any consequential losses caused by the defects or failures.

14-24 Sec. 23. NRS 690B.140 is hereby amended to read as follows:

14-25 690B.140 An insurer who issues policies of insurance for home

14-32 regulation.

14-33 Sec. 24. NRS 690B.160 is hereby amended to read as follows:

14-34 690B.160 1. A contract of insurance for home protection must

14-42 conditions of his performance.

15-1 (e) The copayment, service fee or deductible charge, if any, to be

15-2 charged [for his services.] to the insured.

15-3 (f) All limitations regarding the performance of services, including any

15-4 restrictions as to the time during or geographical area within which services

15-5 may be requested or will be performed.

15-6 (g) That [services will be performed upon a telephoned request to] the

15-7 insurer will commence an investigation of a claim upon a request from

15-8 the insured by telephone, without any requirement that claim forms or

15-9 applications be filed before the [performance of service.] commencement

15-10 of the investigation.

15-11 (h) That services will be initiated by or under the direction of the insurer

15-12 within 48 hours after [proper request is made for services.] the conclusion

15-13 of an investigation of a claim.

15-14 (i) Other conditions and provisions pertaining to the coverage as

15-15 required by the insurance laws of this state or regulations adopted by the

15-16 commissioner.

15-17 2. Insurance for home protection may not be canceled during the term

15-18 for which it is issued, except:

15-19 (a) For nonpayment of the fee for the contract.

15-20 (b) For fraud or misrepresentation of facts material to the issuance or

15-21 renewal of the contract.

15-22 (c) Insurance which provides coverage before the home is sold if the

15-23 sale is not made. The cancellation must be made in accordance with the

15-24 contract provisions.

15-25 3. Insurance for home protection is not renewable unless its terms

15-26 provide otherwise.

15-27 Sec. 25. NRS 690B.180 is hereby amended to read as follows:

15-28 690B.180 An insurer who issues policies of insurance for home

15-32 2. Assume] assume reinsurance from any other insurer.

15-33 Sec. 26. The amendatory provisions of this act do not apply to a claim

15-34 initiated or an action commenced pursuant to NRS 40.600 to 40.695,

15-35 inclusive, and sections 2 to 6, inclusive, of this act, unless the claim was

15-36 initiated or the action was commenced on or after July 1, 1999.

15-37 Sec. 27. This act becomes effective on July 1, 1999.