(REPRINTED WITH ADOPTED AMENDMENTS)
SECOND REPRINT A.B. 133
Assembly Bill No. 133–Assemblyman Dini
February 14, 2001
____________
Referred to Committee on Judiciary
SUMMARY—Makes various changes concerning construction, constructional defects and common-interest communities. (BDR 3‑667)
FISCAL NOTE: Effect on Local Government: No.
~
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 real property; requiring a claimant to provide notice concerning constructional defects to a contractor and allow the contractor to make repairs before commencing an action against the contractor; requiring an affidavit in support of an action for professional negligence against a design professional; imposing certain restrictions to prevent property managers from being encouraged to file a claim for a constructional defect; requiring a contractor to provide certain information to the initial purchaser of a residence; 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
1-2 the provisions set forth as sections 2 to 11, inclusive, of this act.
1-3 Sec. 2. “Design professional” means a person who holds a
1-4 professional license or certificate issued pursuant to chapter 623, 623A
1-5 or 625 of NRS.
1-6 Sec. 3. “Subcontractor” means a contractor who performs work on
1-7 behalf of another contractor in the construction of a residence or
1-8 appurtenance.
1-9 Sec. 4. “Supplier” means a person who provides materials,
1-10 equipment or other supplies for the construction of a residence or
1-11 appurtenance.
1-12 Sec. 5. Except as otherwise provided in NRS 40.670 and subsection
1-13 1 of section 9 of this act:
1-14 1. Before a claimant may commence an action against a contractor
1-15 for damages arising from a constructional defect, the claimant must give
1-16 written notice by certified mail, return receipt requested, to the
1-17 contractor, at the contractor’s last address listed in the records of the
1-18 state contractors’ board, or at the contractor’s last known address if his
2-1 address is not listed in the records of the state contractors’ board,
2-2 specifying in reasonable detail the defects or any damages or injuries to
2-3 each residence or appurtenance that is the subject of the claim. The
2-4 notice must describe in reasonable detail the cause of the defects if the
2-5 cause is known, the nature and extent that is known of the damage or
2-6 injury resulting from the defects and the location of each defect within
2-7 each residence or appurtenance to the extent known. An expert opinion
2-8 concerning the cause of the defects and the nature and extent of the
2-9 damage or injury resulting from the defects based on a representative
2-10 sample of the components of the residences and appurtenances involved
2-11 in the action satisfies the requirements of this subsection.
2-12 2. Within 15 days after receiving a notice pursuant to subsection 1, a
2-13 contractor shall forward a copy of the notice by certified mail, return
2-14 receipt requested, to each subcontractor, supplier and design
2-15 professional who the contractor reasonably believes is responsible for a
2-16 defect specified in the notice and include with the copy of the notice the
2-17 specific defect for which the contractor believes the subcontractor,
2-18 supplier or design professional is responsible.
2-19 3. The claimant shall, upon reasonable notice, allow the contractor
2-20 and a subcontractor, supplier or design professional who received the
2-21 notice pursuant to subsection 2 to access the residence or appurtenance
2-22 that is the subject of the notice to determine the nature and extent of a
2-23 defect and the nature and extent of repairs necessary to remedy the
2-24 defect.
2-25 4. Within 15 days after a subcontractor, supplier or design
2-26 professional receives a copy of a notice pursuant to subsection 2, he shall
2-27 provide the contractor with a statement indicating:
2-28 (a) Whether the subcontractor, supplier or design professional will
2-29 repair the defect for which the contractor believes the subcontractor,
2-30 supplier or design professional is responsible; and
2-31 (b) If the subcontractor, supplier or design professional decides to
2-32 repair the defect, an estimate of the length of time required for the repair,
2-33 and at least two proposed dates on and times at which the subcontractor,
2-34 supplier or design professional can begin making the repair.
2-35 Sec. 6. Except as otherwise provided in NRS 40.670:
2-36 1. Except as otherwise provided in NRS 40.672, a contractor who
2-37 receives notice of a constructional defect pursuant to subsection 1 of
2-38 section 5 of this act may make the repairs necessary to remedy the defects
2-39 and repair any damage or injury to the residence or appurtenance
2-40 described in the notice or arrange to have such repairs made by a
2-41 subcontractor, supplier or design professional to whom the contractor
2-42 forwarded notice of the defect pursuant to subsection 2 of section 5 of
2-43 this act. The contractor shall ensure that any such repairs are completed
2-44 within a reasonable time, but in any event:
2-45 (a) If the constructional defect is not part of a complex matter, not
2-46 later than 45 days after receiving the notice; or
2-47 (b) If the constructional defect is part of a complex matter, not later
2-48 than 90 days after receiving the notice,
3-1 unless the claimant and the contractor negotiate in good faith and agree
3-2 in writing to extend reasonably the time for completing the repairs in
3-3 which case the repairs must be completed not later than the time set forth
3-4 in the agreement.
3-5 2. In making repairs pursuant to subsection 1, the contractor or a
3-6 subcontractor, supplier or design professional who is responsible for
3-7 making the repairs shall:
3-8 (a) Make the repairs at reasonable times that are agreed to in advance
3-9 by the claimant, or by the owner of the residence or appurtenance if the
3-10 claimant is a representative of a homeowner’s association;
3-11 (b) Ensure that all of the work to make the repairs is completed by
3-12 contractors and subcontractors who are properly licensed, bonded and
3-13 insured;
3-14 (c) Take any action necessary to prevent a mechanic’s lien from being
3-15 obtained on the property of the claimant on which the repairs are being
3-16 made, to remove such a mechanic’s lien if one is obtained, and to
3-17 indemnify the claimant against any expenses incurred by the claimant
3-18 concerning such a mechanic’s lien; and
3-19 (d) Provide to the claimant a written report of each repair made, the
3-20 method used to make the repair and the parts replaced in making such
3-21 repairs within 10 days after the repairs are made.
3-22 3. The claimant shall allow the contractor and a subcontractor,
3-23 supplier or design professional who is responsible for making repairs
3-24 pursuant to subsection 1 a reasonable opportunity to make repairs
3-25 pursuant to subsection 1.
3-26 4. If the claimant is not satisfied with the repairs made pursuant to
3-27 subsection 1 or NRS 40.672 or the contractor does not make the repairs
3-28 or have the repairs made within the time set forth in subsection 1 or
3-29 within the time agreed to in writing by the claimant and the contractor,
3-30 the claimant may commence an action governed by NRS 40.600 to
3-31 40.695, inclusive, and sections 2 to 11, inclusive, of this act against the
3-32 contractor for a constructional defect or any damages or injuries that
3-33 were specified in the notice provided to the contractor pursuant to section
3-34 5 of this act. A claimant who is not satisfied with the repairs is not
3-35 required to give additional notice pursuant to NRS 40.645 or 40.682
3-36 before commencing such an action.
3-37 Sec. 7. 1. Except as otherwise provided in subsection 3, a
3-38 contractor who does not provide a subcontractor, supplier or design
3-39 professional with notice of a constructional defect pursuant to subsection
3-40 2 of section 5 of this act who the contractor reasonably believes is
3-41 responsible for a defect specified in the notice provided to the contractor
3-42 pursuant to subsection 1 of section 5 of this act, may not recover
3-43 attorney’s fees, costs, fees for expert witnesses or fees for consultants
3-44 from the subcontractor, supplier or design professional that are incurred
3-45 by the contractor in defending an action against the contractor for the
3-46 constructional defect pursuant to NRS 40.600 to 40.695, inclusive, and
3-47 sections 2 to 11, inclusive, of this act.
3-48 2. Except as otherwise provided in subsection 3, after a claimant files
3-49 a claim against a contractor that is governed by NRS 40.600 to 40.695,
4-1 inclusive, and sections 2 to 11, inclusive, of this act, a subcontractor,
4-2 supplier or design professional who is responsible for a constructional
4-3 defect involved in the claim and who did not receive notice of the defect
4-4 pursuant to subsection 2 of section 5 of this act may present directly to
4-5 the claimant an offer to repair the defect. If the claimant accepts the
4-6 offer, the subcontractor, supplier or design professional repairs the
4-7 defect to the satisfaction of the claimant and the claimant provides a
4-8 statement in writing to the subcontractor, supplier or design professional
4-9 indicating that the defect was repaired to his satisfaction, the contractor
4-10 against whom the claim was filed may not pursue any claim related to the
4-11 defect that was repaired against the subcontractor, supplier or design
4-12 professional who repaired the defect.
4-13 3. The provisions of this section do not apply to a contractor who did
4-14 not give notice of the constructional defect to the subcontractor, supplier
4-15 or design professional if the contractor could not, after a good faith
4-16 effort, identify the subcontractor, supplier or design professional who
4-17 may have been responsible for the defect within the time set forth for
4-18 providing a notice to the subcontractor, supplier or design professional.
4-19 Sec. 8. 1. A contractor, subcontractor, supplier or design
4-20 professional who receives notice of a constructional defect pursuant to
4-21 section 5 of this act may present the notice to an insurer who issued a
4-22 policy of insurance covering all or part of the conduct or business of the
4-23 contractor, subcontractor, supplier or design professional.
4-24 2. A notice provided to an insurer pursuant to subsection 1:
4-25 (a) Constitutes the making of a claim under the policy by the
4-26 contractor, subcontractor, supplier or design professional; and
4-27 (b) Requires the contractor, subcontractor, supplier or design
4-28 professional and the insurer to perform any obligations or duties
4-29 required by the policy upon the making of a claim.
4-30 Sec. 9. 1. A claimant is not required to provide a contractor with
4-31 notice pursuant to section 5 of this act before commencing an action
4-32 against the contractor for damages arising from a constructional defect
4-33 if:
4-34 (a) The contractor has threatened or initiated legal proceedings
4-35 against the claimant at any time;
4-36 (b) The claimant has been sued by a third party or the contractor in
4-37 connection with or resulting from a constructional defect and the
4-38 claimant is filing a third-party complaint or cross-complaint against the
4-39 contractor concerning that constructional defect; or
4-40 (c) The contractor has threatened to commit or committed an act of
4-41 violence or a criminal offense against the claimant or the property of the
4-42 claimant, or the claimant has a reasonable belief that the contractor
4-43 intends to commit an act of violence or a criminal offense against the
4-44 claimant or the property of the claimant.
4-45 2. Nothing in sections 5 to 9, inclusive, of this act affects the ability
4-46 of claimants to maintain a class action for constructional defects against
4-47 a contractor.
4-48 3. Nothing in sections 5 to 9, inclusive, of this act affects the ability
4-49 of a claimant, contractor, subcontractor, supplier or design professional
5-1 to pursue any remedy available through the state contractors’ board
5-2 pursuant to chapter 624 of NRS.
5-3 Sec. 10. 1. Except as otherwise provided in subsection 2, in an
5-4 action pursuant to NRS 40.600 to 40.695, inclusive, and sections 2 to 11,
5-5 inclusive, of this act for the professional negligence of a design
5-6 professional or a person primarily engaged in the practice of
5-7 professional engineering, land surveying, architecture or landscape
5-8 architecture, concurrently with the service of the first pleading in an
5-9 action, the attorney for the complainant shall file an affidavit with the
5-10 court stating that the attorney:
5-11 (a) Has reviewed the facts of the case;
5-12 (b) Has consulted with an expert;
5-13 (c) Reasonably believes the expert who was consulted is
5-14 knowledgeable in the relevant discipline involved in the action; and
5-15 (d) Has concluded on the basis of his review and the consultation with
5-16 the expert that the action has a reasonable basis in law and fact.
5-17 2. The attorney for the complainant may file the affidavit required
5-18 pursuant to subsection 1 at a later time if he could not consult with an
5-19 expert and prepare the affidavit before filing the action without causing
5-20 the action to be impaired or barred by the statute of limitations or repose,
5-21 or other limitations prescribed by law. If the attorney must submit the
5-22 affidavit late, he shall file an affidavit concurrently with the service of
5-23 the first pleading in the action stating his reason for failing to comply
5-24 with subsection 1 and the attorney shall consult with an expert and file
5-25 the affidavit required pursuant to subsection 1 not later than 45 days
5-26 after filing the action.
5-27 3. In addition to the statement included in the affidavit pursuant to
5-28 subsection 1, a report must be attached to the affidavit. Except as
5-29 otherwise provided in subsection 4, the report must be prepared by the
5-30 expert consulted by the attorney and include, without limitation:
5-31 (a) The resumé of the expert;
5-32 (b) A statement that the expert is experienced in each discipline which
5-33 is the subject of the report;
5-34 (c) A copy of each nonprivileged document reviewed by the expert in
5-35 preparing his report, including, without limitation, each record, report
5-36 and related document that the expert has determined is relevant to the
5-37 allegations of negligent conduct that are the basis for the action;
5-38 (d) The conclusions of the expert and the basis for the conclusions;
5-39 and
5-40 (e) A statement that the expert has concluded that there is a
5-41 reasonable basis for filing the action.
5-42 4. In an action brought by a claimant in which an affidavit is
5-43 required to be filed pursuant to subsection 1:
5-44 (a) The report required pursuant to subsection 3 is not required to
5-45 include the information set forth in paragraphs (c) and (d) of subsection
5-46 3 if the claimant or his attorney files an affidavit, at the time that the
5-47 affidavit is filed pursuant to subsection 1, stating that he made
5-48 reasonable efforts to obtain the nonprivileged documents described in
6-1 paragraph (c) of subsection 3, but was unable to obtain such documents
6-2 before filing the action;
6-3 (b) The claimant or his attorney shall amend the report required
6-4 pursuant to subsection 3 to include any documents and information
6-5 required pursuant to paragraph (c) or (d) of subsection 3 as soon as
6-6 reasonably practicable after receiving the document or information; and
6-7 (c) The court may dismiss the action if the claimant and his attorney
6-8 fail to comply with the requirements of paragraph (b).
6-9 5. An expert consulted by an attorney to prepare an affidavit
6-10 pursuant to this section must not be a party to the action.
6-11 6. As used in this section, “expert” means a person who:
6-12 (a) Is licensed in a state to engage in the practice of professional
6-13 engineering, land surveying, architecture or landscape architecture; or
6-14 (b) Teaches or has taught at an accredited college or university in a
6-15 discipline relevant to the action.
6-16 Sec. 11. 1. The court shall dismiss an action filed pursuant to NRS
6-17 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act for
6-18 the professional negligence of a design professional or a person
6-19 primarily engaged in the practice of professional engineering, land
6-20 surveying, architecture or landscape architecture if the attorney for a
6-21 complainant fails to:
6-22 (a) File an affidavit required pursuant to section 10 of this act;
6-23 (b) File a report required pursuant to subsection 3 of section 10 of this
6-24 act; or
6-25 (c) Name the expert consulted in the affidavit required pursuant to
6-26 subsection 1 of section 10 of this act.
6-27 2. The fact that an attorney for a complainant has complied or failed
6-28 to comply with the provisions of section 10 of this act is admissible in the
6-29 action.
6-30 Sec. 12. NRS 40.600 is hereby amended to read as follows:
6-31 40.600 As used in NRS 40.600 to 40.695, inclusive, and sections 2 to
6-32 11, inclusive, of this act, unless the context otherwise requires, the words
6-33 and terms defined in NRS 40.605 to 40.630, inclusive, and sections 2 to
6-34 11, inclusive, of this act have the meanings ascribed to them in those
6-35 sections.
6-36 Sec. 13. NRS 40.645 is hereby amended to read as follows:
6-37 40.645 Except as otherwise provided in this section and NRS 40.670:
6-38 1. For a claim that is not a complex matter, if a contractor does not
6-39 take action to make repairs or attempt to make repairs pursuant to
6-40 subsection 1 of section 6 of this act within the time set forth in subsection
6-41 1 of section 6 of this act or within the time agreed to in writing by the
6-42 claimant and the contractor, at least 60 days before a claimant commences
6-43 an action against a contractor for damages arising from a constructional
6-44 defect, the claimant must give written notice by certified mail, return
6-45 receipt requested, to the contractor, at the contractor’s last known address,
6-46 specifying in reasonable detail the defects or any damages or injuries to
6-47 each residence or appurtenance that is the subject of the claim. The notice
6-48 must describe in reasonable detail the cause of the defects if the cause is
6-49 known, the nature and extent that is known of the damage or injury
7-1 resulting from the defects and the location of each defect within each
7-2 residence or appurtenance to the extent known. An expert opinion
7-3 concerning the cause of the defects and the nature and extent of the damage
7-4 or injury resulting from the defects based on a representative sample of the
7-5 components of the residences and appurtenances involved in the action
7-6 satisfies the requirements of this section. During the 45-day period after the
7-7 contractor receives the notice, on his written request, the contractor is
7-8 entitled to inspect the property that is the subject of the claim to determine
7-9 the nature and cause of the defect, damage or injury and the nature and
7-10 extent of repairs necessary to remedy the defect. The contractor shall,
7-11 before making the inspection, provide reasonable notice of the inspection
7-12 and shall make the inspection at a reasonable time. The contractor may
7-13 take reasonable steps to establish the existence of the defect.
7-14 2. If a residence or appurtenance that is the subject of the claim is
7-15 covered by a homeowner’s warranty that is purchased by or on behalf of a
7-16 claimant pursuant to NRS 690B.100 to 690B.180, inclusive, a claimant
7-17 shall diligently pursue a claim under the contract.
7-18 3. Within 60 days after the contractor receives [the notice,] notice
7-19 pursuant to subsection 1, the contractor shall make a written response to
7-20 the claimant. The response:
7-21 (a) Must be served to the claimant by certified mail, return receipt
7-22 requested, at the claimant’s last known address.
7-23 (b) Must respond to each constructional defect set forth in the
7-24 claimant’s notice, and describe in reasonable detail the cause of the defect,
7-25 if known, the nature and extent of the damage or injury resulting from the
7-26 defect, and, unless the response is limited to a proposal for monetary
7-27 compensation, the method, adequacy and estimated cost of any proposed
7-28 repair.
7-29 (c) May include[:
7-30 (1) A] a proposal for monetary compensation, which may include a
7-31 contribution from a subcontractor.
7-32 [(2) If the contractor or his subcontractor is licensed to make the
7-33 repairs, an agreement by the contractor or subcontractor to make the
7-34 repairs.
7-35 (3) An agreement by the contractor to cause the repairs to be made, at
7-36 the contractor’s expense, by another contractor who is licensed to make the
7-37 repairs, bonded and insured.
7-38 The repairs must be made within 45 days after the contractor receives
7-39 written notice of acceptance of the response, unless completion is delayed
7-40 by the claimant or by other events beyond the control of the contractor, or
7-41 timely completion of the repairs is not reasonably possible. The claimant
7-42 and the contractor may agree in writing to extend the periods prescribed by
7-43 this section.]
7-44 4. Not later than 15 days before the mediation required pursuant to
7-45 NRS 40.680 and upon providing 15 days’ notice, each party shall provide
7-46 the other party, or shall make a reasonable effort to assist the other party to
7-47 obtain, all relevant reports, photos, correspondence, plans, specifications,
7-48 warranties, contracts, subcontracts, work orders for repair, videotapes,
8-1 technical reports, soil and other engineering reports and other documents or
8-2 materials relating to the claim that are not privileged.
8-3 5. If the claimant is a representative of a homeowner’s association, the
8-4 association shall submit any response made by the contractor to each
8-5 member of the association.
8-6 [6. As used in this section, “subcontractor” means a contractor who
8-7 performs work on behalf of another contractor in the construction of a
8-8 residence or appurtenance.]
8-9 Sec. 14. NRS 40.650 is hereby amended to read as follows:
8-10 40.650 1. If a claimant unreasonably rejects a reasonable written
8-11 offer of settlement made as part of a response made pursuant to NRS
8-12 40.645 or 40.682 or does not permit the contractor or independent
8-13 contractor a reasonable opportunity to repair the defect pursuant to [an
8-14 accepted offer of settlement] section 6 of this act and thereafter
8-15 commences an action governed by NRS 40.600 to 40.695, inclusive, and
8-16 sections 2 to 11, inclusive, of this act, the court in which the action is
8-17 commenced may:
8-18 (a) Deny the claimant’s attorney’s fees and costs; and
8-19 (b) Award attorney’s fees and costs to the contractor.
8-20 Any sums paid under a homeowner’s warranty, other than sums paid in
8-21 satisfaction of claims that are collateral to any coverage issued to or by the
8-22 contractor, must be deducted from any recovery.
8-23 2. If a contractor fails to:
8-24 (a) Make an offer of settlement;
8-25 (b) Make a good faith response to the claim asserting no liability;
8-26 (c) Complete, in a good and workmanlike manner, the repairs [specified
8-27 in an accepted offer;] he makes pursuant to section 6 of this act;
8-28 (d) Agree to a mediator or accept the appointment of a mediator
8-29 pursuant to NRS 40.680 or subsection 4 of NRS 40.682; or
8-30 (e) Participate in mediation,
8-31 the limitations on damages and defenses to liability provided in NRS
8-32 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act do
8-33 not apply and the claimant may commence an action without satisfying any
8-34 other requirement of NRS 40.600 to 40.695, inclusive [.] , and sections 2
8-35 to 11, inclusive, of this act.
8-36 3. If coverage under a homeowner’s warranty is denied by an insurer
8-37 in bad faith, the homeowner and the contractor have a right of action for
8-38 the sums that would have been paid if coverage had been provided, plus
8-39 reasonable attorney’s fees and costs.
8-40 Sec. 15. NRS 40.667 is hereby amended to read as follows:
8-41 40.667 1. Except as otherwise provided in subsection 2, a written
8-42 waiver or settlement agreement executed by a claimant after a contractor
8-43 has corrected or otherwise repaired a constructional defect does not bar a
8-44 claim for the constructional defect if it is determined that the contractor
8-45 failed to correct or repair the defect properly.
8-46 2. The provisions of subsection 1 do not apply to any written waiver or
8-47 settlement agreement described in subsection 1, unless:
8-48 (a) The claimant has obtained the opinion of an expert concerning the
8-49 constructional defect;
9-1 (b) The claimant has provided the contractor with a written notice of the
9-2 defect pursuant to NRS 40.645 [or 40.682] , 40.682 or section 5 of this act
9-3 and a copy of the expert’s opinion; and
9-4 (c) The claimant and the contractor have complied with the
9-5 requirements for inspection and repair as provided in NRS 40.600 to
9-6 40.695, inclusive [.] , and sections 2 to 11, inclusive, of this act.
9-7 3. If a claimant does not prevail in any action which is not barred
9-8 pursuant to this section, the court may:
9-9 (a) Deny the claimant’s attorney’s fees, fees for an expert witness or
9-10 costs; and
9-11 (b) Award attorney’s fees and costs to the contractor.
9-12 Sec. 16. NRS 40.682 is hereby amended to read as follows:
9-13 40.682 Except as otherwise provided in this section and NRS 40.670:
9-14 1. Notwithstanding the provisions of subsection 1 of NRS 40.680, a
9-15 claimant may commence an action in district court in a complex matter. If
9-16 the claimant commences an action in district court he shall:
9-17 (a) File and serve the summons and complaint as required by law; and
9-18 (b) [At] If a contractor does not take action to make repairs or attempt
9-19 to make repairs pursuant to subsection 1 of section 6 of this act within
9-20 the time set forth in subsection 1 of section 6 of this act or within the time
9-21 agreed to in writing by the claimant and the contractor, at the same time
9-22 and in the same manner as the claimant serves the summons and complaint
9-23 upon the contractor, serve upon the contractor a written notice specifying
9-24 in reasonable detail, to the extent known, the defects and any damages or
9-25 injuries to each residence or appurtenance that is the subject of the claim.
9-26 The notice must describe in reasonable detail each defect, the specific
9-27 location of each defect, and the nature and extent that is known of the
9-28 damage or injury resulting from each defect. If an expert opinion has been
9-29 rendered concerning the existence or extent of the defects, a written copy
9-30 of the opinion must accompany the notice. An expert opinion that specifies
9-31 each defect to the extent known, the specific location of each defect to the
9-32 extent known, and the nature and extent that is known of the damage or
9-33 injury resulting from each defect, based on a valid and reliable
9-34 representative sample of the residences and appurtenances involved in the
9-35 action, satisfies the requirements of this section.
9-36 2. The contractor shall file and serve an answer to the complaint as
9-37 required by law.
9-38 3. Not later than 30 days after the date of service of the answer to the
9-39 complaint, the contractor and claimant shall meet to establish a schedule
9-40 for:
9-41 (a) The exchange of or reasonable access for the other party to all
9-42 relevant reports, photos, correspondence, plans, specifications, warranties,
9-43 contracts, subcontracts, work orders for repair, videotapes, technical
9-44 reports, soil and other engineering reports and other documents or
9-45 materials relating to the claim that are not privileged;
9-46 (b) The inspection of the residence or appurtenance that is the subject of
9-47 the claim to evaluate the defects set forth in the notice served pursuant to
9-48 subsection 1; and
10-1 (c) The conduct of any tests that are reasonably necessary to determine
10-2 the nature and cause of a defect or any damage or injury, and the nature
10-3 and extent of repairs necessary to remedy a defect or any damage or injury.
10-4 The party conducting the test shall provide reasonable notice of the test to
10-5 all other parties and conduct the test at a reasonable time.
10-6 4. At the meeting held pursuant to subsection 3, the claimant and
10-7 contractor shall:
10-8 (a) Establish a schedule for the addition of any additional parties to the
10-9 complaint or to file any third-party complaint against an additional party
10-10 who may be responsible for all or a portion of the defects set forth in the
10-11 notice served pursuant to subsection 1;
10-12 (b) Unless the claimant and contractor agree otherwise in writing, select
10-13 a mediator and proceed with mediation as provided in subsections 2 to 6,
10-14 inclusive, of NRS 40.680; and
10-15 (c) If the claimant and contractor agree, select a special master and
10-16 jointly petition the court for his appointment pursuant to subsection 7.
10-17 5. Each party added to the complaint or against whom a third-party
10-18 complaint is filed pursuant to subsection 4 shall file and serve an answer as
10-19 required by law.
10-20 6. If the claimant or contractor adds a party to the complaint or files a
10-21 third-party complaint, then not later than 60 days after the date determined
10-22 pursuant to paragraph (a) of subsection 4, the contractor, claimant and each
10-23 party added to the complaint or against whom a third-party complaint is
10-24 filed shall meet to establish a schedule for the activities set forth in
10-25 paragraphs (a), (b) and (c) of subsection 3.
10-26 7. If a special master has not been appointed, the contractor, claimant
10-27 or a party added to the complaint or against whom a third-party complaint
10-28 is filed may petition the court for the appointment of a special master at
10-29 any time after the meeting held pursuant to subsection 3. The special
10-30 master may:
10-31 (a) Take any action set forth in subsection 4 of NRS 40.680;
10-32 (b) Exercise any power set forth in Rule 53 of the Nevada Rules of Civil
10-33 Procedure; and
10-34 (c) Subject to the provisions of NRS 40.680, if the parties fail to
10-35 establish a schedule or determine a date as required in subsection 3, 4 or 6,
10-36 establish the schedule or determine the date.
10-37 8. Unless the mediation required pursuant to paragraph (b) of
10-38 subsection 4 is completed or the contractor and claimant have agreed in
10-39 writing not to mediate the claim pursuant to paragraph (b) of subsection 4,
10-40 a party shall not propound interrogatories or requests for admission, take a
10-41 deposition or file a motion that is dispositive of the action except:
10-42 (a) Upon agreement of the parties; or
10-43 (b) With the prior approval of the court or special master.
10-44 9. If a residence or appurtenance that is the subject of the claim is
10-45 covered by a homeowner’s warranty that is purchased by or on behalf of a
10-46 claimant pursuant to NRS 690B.100 to 690B.180, inclusive, a claimant
10-47 shall diligently pursue a claim under the contract.
10-48 10. Unless the parties agree otherwise, not less than 60 days before the
10-49 date of the mediation pursuant to paragraph (b) of subsection 4 is
11-1 convened, the contractor shall make a written response to the claimant that
11-2 meets the requirements set forth in subsection 3 of NRS 40.645.
11-3 11. If the claimant is a representative of a homeowner’s association,
11-4 the association shall submit any response made by the contractor to each
11-5 member of the association in writing not more than 30 days after the date
11-6 the claimant receives the response.
11-7 12. The claimant shall respond to the written response of the contractor
11-8 within 45 days after the response of the contractor is mailed to the
11-9 claimant.
11-10 Sec. 17. NRS 40.688 is hereby amended to read as follows:
11-11 40.688 1. If a claimant attempts to sell a residence that is or has been
11-12 the subject of a claim governed by NRS 40.600 to 40.695, inclusive, and
11-13 sections 2 to 11, inclusive, of this act or the subject of a notice given
11-14 pursuant to section 5 of this act, he shall disclose, in writing, to any
11-15 prospective purchaser of the residence, not less than 30 days before the
11-16 close of escrow for the sale of the residence or, if escrow is to close less
11-17 than 30 days after the execution of the sales agreement, then immediately
11-18 upon the execution of the sales agreement or, if a claim is initiated or a
11-19 notice is given less than 30 days before the close of escrow, within 24
11-20 hours after giving written notice to the contractor pursuant to section 5 of
11-21 this act, subsection 1 of NRS 40.645 or subsection 1 of NRS 40.682:
11-22 (a) All notices given by the claimant to the contractor pursuant to NRS
11-23 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act that
11-24 are related to the residence;
11-25 (b) All opinions the claimant has obtained from experts regarding a
11-26 constructional defect that is or has been the subject of the claim;
11-27 (c) The terms of any settlement, order or judgment relating to the claim;
11-28 and
11-29 (d) A detailed report of all repairs made to the residence by or on behalf
11-30 of the claimant as a result of a constructional defect that is or has been the
11-31 subject of the claim.
11-32 2. Before taking any action on a claim pursuant to NRS 40.600 to
11-33 40.695, inclusive, and sections 2 to 11, inclusive, of this act or giving
11-34 notice pursuant to section 5 of this act, the attorney for a claimant shall
11-35 notify the claimant in writing of the provisions of this section.
11-36 Sec. 18. NRS 40.692 is hereby amended to read as follows:
11-37 40.692 If, after complying with the procedural requirements of section
11-38 5 of this act and NRS 40.645 and 40.680, or NRS 40.682, a claimant
11-39 proceeds with an action for damages arising from a constructional defect:
11-40 1. The claimant and each contractor who is named in the original
11-41 complaint when the action is commenced are not required, while the action
11-42 is pending, to comply with the requirements of section 5 of this act, NRS
11-43 40.645 or 40.680, or NRS 40.682, for any constructional defect that the
11-44 claimant includes in an amended complaint, if the constructional defect:
11-45 (a) Is attributable, in whole or in part, to such a contractor;
11-46 (b) Is located on the same property described in the original complaint;
11-47 and
11-48 (c) Was not discovered before the action was commenced provided that
11-49 a good faith effort had been undertaken by the claimant.
12-1 2. The claimant is not required to give written notice of a defect
12-2 pursuant to subsection 1 of NRS 40.645 or subsection 1 of NRS 40.682 to
12-3 any person who is joined to or intervenes in the action as a party after it is
12-4 commenced. If such a person becomes a party to the action:
12-5 (a) For the purposes of subsection 1 of NRS 40.645 or subsection 1 of
12-6 NRS 40.682, the person shall be deemed to have been given notice of the
12-7 defect by the claimant on the date on which the person becomes a party to
12-8 the action; and
12-9 (b) The provisions of NRS 40.600 to 40.695, inclusive, apply to the
12-10 person after that date.
12-11 Sec. 19. NRS 40.695 is hereby amended to read as follows:
12-12 40.695 1. Except as otherwise provided in subsection 2, statutes of
12-13 limitation or repose applicable to a claim based on a constructional defect
12-14 governed by NRS 40.600 to 40.695, inclusive, and sections 2 to 11,
12-15 inclusive, of this act are tolled from the time notice of the claim is given[,]
12-16 or notice of a defect, damage or injury is given pursuant to section 5 of
12-17 this act, until 30 days after mediation is concluded or waived in writing
12-18 pursuant to NRS 40.680 or subsection 4 of NRS 40.682.
12-19 2. Tolling under this section applies [:
12-20 (a) Only to a claim that is not a complex matter.
12-21 (b) To] to a third party regardless of whether the party is required to
12-22 appear in the proceeding.
12-23 Sec. 20. Chapter 113 of NRS is hereby amended by adding thereto a
12-24 new section to read as follows:
12-25 1. Each contractor who develops, constructs or landscapes a new
12-26 residence shall, within 30 days after the close of escrow of the initial
12-27 purchase of the residence, provide in writing to the initial purchaser of
12-28 the residence:
12-29 (a) The name, license number, business address and telephone
12-30 number of each subcontractor who performed any work related to the
12-31 development, construction or landscaping of the residence; and
12-32 (b) A brief description so the work performed by each subcontractor
12-33 identified pursuant to paragraph (a).
12-34 2. As used in this section, “subcontractor” has the meaning ascribed
12-35 to it in section 3 of this act.
12-36 Sec. 21. Chapter 116 of NRS is hereby amended by adding thereto a
12-37 new section to read as follows:
12-38 1. A person shall not provide or offer to provide anything of
12-39 monetary value to a property manager of an association or to a member
12-40 or officer of an executive board to induce the property manager, member
12-41 or officer to encourage or discourage the association to file a claim for
12-42 damages arising from a constructional defect.
12-43 2. A property manager shall not accept anything of value given to
12-44 him in exchange for encouraging or discouraging the association that he
12-45 manages to file a claim for damages arising from a constructional defect.
12-46 3. A member or officer of an executive board shall not accept
12-47 anything of value given to him in exchange for encouraging or
12-48 discouraging the association of which he is a member or officer of the
13-1 executive board to file a claim for damages arising from a constructional
13-2 defect.
13-3 4. If a property manager violates the provisions of this section:
13-4 (a) The real estate division of the department of business and industry
13-5 shall suspend or revoke his permit to engage in property management
13-6 issued pursuant to chapter 645 of NRS, if he has been issued such a
13-7 permit; and
13-8 (b) The real estate commission shall suspend or revoke his certificate
13-9 issued pursuant to NRS 116.31139, if he has been issued such a
13-10 certificate.
13-11 5. If a member or officer of an executive board violates the
13-12 provisions of this section, the executive board shall remove the officer or
13-13 member from the board.
13-14 6. Any person who willfully violates the provisions of this section is
13-15 guilty of a misdemeanor.
13-16 7. As used in this section, “constructional defect” has the meaning
13-17 ascribed to it in NRS 40.615.
13-18 Sec. 22. NRS 116.1203 is hereby amended to read as follows:
13-19 116.1203 1. Except as otherwise provided in subsection 2, if a
13-20 planned community contains no more than 12 units and is not subject to
13-21 any developmental rights, it is subject only to NRS 116.1105, 116.1106
13-22 and 116.1107 unless the declaration provides that this entire chapter is
13-23 applicable.
13-24 2. Except for NRS 116.3104, 116.31043, 116.31046 and 116.31138,
13-25 [NRS] 116.3101 to 116.3119, and section 21 of this act inclusive, and
13-26 116.110305 to 116.110393, inclusive, to the extent necessary in construing
13-27 any of those sections, apply to a residential planned community containing
13-28 more than six units.
13-29 Sec. 23. NRS 116.31139 is hereby amended to read as follows:
13-30 116.31139 1. An association may employ a person engaged in
13-31 property management for the common-interest community.
13-32 2. Except as otherwise provided in this section, a person engaged in
13-33 property management for a common-interest community must:
13-34 (a) Hold a permit to engage in property management that is issued
13-35 pursuant to the provisions of chapter 645 of NRS; or
13-36 (b) Hold a certificate issued by the real estate commission pursuant to
13-37 subsection 3.
13-38 3. The real estate commission shall provide by regulation for the
13-39 issuance of certificates for the management of common-interest
13-40 communities to persons who are not otherwise authorized to engage in
13-41 property management pursuant to the provisions of chapter 645 of NRS.
13-42 The regulations:
13-43 (a) Must establish the qualifications for the issuance of such a
13-44 certificate, including the education and experience required to obtain such
13-45 a certificate;
13-46 (b) May require applicants to pass an examination in order to obtain a
13-47 certificate;
13-48 (c) Must establish standards of practice for persons engaged in property
13-49 management for a common-interest community;
14-1 (d) Must establish the grounds for initiating disciplinary action against a
14-2 person to whom a certificate has been issued, including, without limitation,
14-3 the grounds for placing conditions, limitations or restrictions on a
14-4 certificate and for the suspension or revocation of a certificate; and
14-5 (e) Must establish rules of practice and procedure for conducting
14-6 disciplinary hearings.
14-7 The real estate division of the department of business and industry may
14-8 investigate the property managers to whom certificates have been issued to
14-9 ensure their compliance with section 21 of this act and the standards of
14-10 practice adopted pursuant to this subsection and collect a fee for the
14-11 issuance of a certificate by the commission in an amount not to exceed the
14-12 administrative costs of issuing the certificate.
14-13 4. The provisions of subsection 2 do not apply to:
14-14 (a) A person who is engaged in property management for a common-
14-15 interest community on October 1, 1999, and is granted an exemption from
14-16 the requirements of subsection 2 by the administrator upon demonstration
14-17 that he is qualified and competent to engage in property management for a
14-18 common-interest community.
14-19 (b) A financial institution.
14-20 (c) An attorney licensed to practice in this state.
14-21 (d) A trustee.
14-22 (e) An employee of a corporation who manages only the property of the
14-23 corporation.
14-24 (f) A declarant.
14-25 (g) A receiver.
14-26 5. As used in this section, “property management” means the physical,
14-27 administrative or financial maintenance and management of real property,
14-28 or the supervision of those activities for a fee, commission or other
14-29 compensation or valuable consideration.
14-30 Sec. 24. NRS 116.3115 is hereby amended to read as follows:
14-31 116.3115 1. Until the association makes an assessment for common
14-32 expenses, the declarant shall pay all common expenses. After an
14-33 assessment has been made by the association, assessments must be made at
14-34 least annually, based on a budget adopted at least annually by the
14-35 association in accordance with the requirements set forth in NRS
14-36 116.31151. Except for an association for a time-share project governed by
14-37 the provisions of chapter 119A of NRS, and unless the declaration imposes
14-38 more stringent standards, the budget must include a budget for the daily
14-39 operation of the association and the money for the reserve required by
14-40 paragraph (b) of subsection 2.
14-41 2. Except for assessments under subsections 4 to 7, inclusive:
14-42 (a) All common expenses, including a reserve, must be assessed against
14-43 all the units in accordance with the allocations set forth in the declaration
14-44 pursuant to subsections 1 and 2 of NRS 116.2107.
14-45 (b) The association shall establish an adequate reserve, funded on a
14-46 reasonable basis, for the repair, replacement and restoration of the major
14-47 components of the common elements. The reserve may be used only for
14-48 those purposes, including, without limitation, repairing, replacing and
15-1 restoring roofs, roads and sidewalks, and must not be used for daily
15-2 maintenance.
15-3 3. Any past due assessment for common expenses or installment
15-4 thereof bears interest at the rate established by the association not
15-5 exceeding 18 percent per year.
15-6 4. To the extent required by the declaration:
15-7 (a) Any common expense associated with the maintenance, repair,
15-8 restoration or replacement of a limited common element must be assessed
15-9 against the units to which that limited common element is assigned,
15-10 equally, or in any other proportion the declaration provides;
15-11 (b) Any common expense or portion thereof benefiting fewer than all of
15-12 the units must be assessed exclusively against the units benefited; and
15-13 (c) The costs of insurance must be assessed in proportion to risk and the
15-14 costs of utilities must be assessed in proportion to usage.
15-15 5. Assessments to pay a judgment against the association may be made
15-16 only against the units in the common-interest community at the time the
15-17 judgment was entered, in proportion to their liabilities for common
15-18 expenses.
15-19 6. If any common expense is caused by the misconduct of any unit’s
15-20 owner, the association may assess that expense exclusively against his unit.
15-21 7. The association of a common-interest community created before
15-22 January 1, 1992, is not required to make an assessment against a vacant lot
15-23 located within the community that is owned by the declarant.
15-24 8. If liabilities for common expenses are reallocated, assessments for
15-25 common expenses and any installment thereof not yet due must be
15-26 recalculated in accordance with the reallocated liabilities.
15-27 9. The association shall provide written notice to the owner of each
15-28 unit of a meeting at which an assessment for a capital improvement or the
15-29 commencement of a civil action is to be considered or action is to be taken
15-30 on such an assessment at least 21 calendar days before the meeting. Except
15-31 as otherwise provided in this subsection, the association may commence a
15-32 civil action only upon a vote or written agreement of the owners of units to
15-33 which at least a majority of the votes of the members of the association are
15-34 allocated. The provisions of this subsection do not apply to a civil action
15-35 that is commenced:
15-36 (a) By an association for a time-share project governed by the
15-37 provisions of chapter 119A of NRS;
15-38 (b) To enforce the payment of an assessment;
15-39 (c) To enforce the declaration, bylaws or rules of the association;
15-40 (d) To proceed with a counterclaim; or
15-41 (e) To protect the [health, safety and welfare of the members of the
15-42 association.] action against the running of the statute of limitations or
15-43 repose. If a civil action is commenced pursuant to this paragraph without
15-44 the required vote or agreement, the action must be ratified within 90 days
15-45 after the commencement of the action by a vote or written agreement of the
15-46 owners of the units to which at least a majority of votes of the members of
15-47 the association are allocated. If the association, after making a good faith
15-48 effort, cannot obtain the required vote or agreement to commence or ratify
15-49 such a civil action, the association may thereafter seek to dismiss the action
16-1 without prejudice for that reason only if a vote or written agreement of the
16-2 owners of the units to which at least a majority of votes of the members of
16-3 the association are allocated was obtained at the time the approval to
16-4 commence or ratify the action was sought.
16-5 10. At least 10 days before an association commences or seeks to
16-6 ratify the commencement of a civil action, the association shall provide a
16-7 written statement to all units’ owners that includes:
16-8 (a) A reasonable estimate of the costs of the civil action, including
16-9 reasonable attorney’s fees;
16-10 (b) An explanation of the potential benefits of the civil action and the
16-11 potential adverse consequences if the association does not commence the
16-12 action or if the outcome of the action is not favorable to the association;
16-13 and
16-14 (c) All disclosures that are required to be made upon the sale of the
16-15 property.
16-16 11. No person other than a unit’s owner may request the dismissal of a
16-17 civil action commenced by the association on the ground that the
16-18 association failed to comply with any provision of this section.
16-19 Sec. 25. NRS 119A.165 is hereby amended to read as follows:
16-20 119A.165 1. If a matter governed by this chapter is also governed by
16-21 chapter 116 of NRS, compliance with the provisions of chapter 116 of
16-22 NRS governing the matter which are in addition to or different from the
16-23 provisions in this chapter governing the same matter is not required. In the
16-24 event of a conflict between provisions of this chapter and chapter 116 of
16-25 NRS, the provisions of this chapter prevail.
16-26 2. Without limiting the generality of subsection 1, the provisions of
16-27 NRS 116.11145, 116.12065, 116.3103, 116.31031, 116.31034, 116.3106,
16-28 116.31065, 116.3108 to 116.311, inclusive, 116.31139, 116.31145 to
16-29 116.31158, inclusive, 116.31162, 116.31175, 116.31177, 116.41095 and
16-30 116.4117 and section 21 of this act do not apply to a time share or a time-
16-31 share project.
16-32 Sec. 26. The amendatory provisions of this act do not apply to a claim
16-33 initiated or an action commenced pursuant to NRS 40.600 to 40.695,
16-34 inclusive, and sections 2 to 11, inclusive, of this act, unless the claim was
16-35 initiated or the action was commenced on or after October 1, 2001.
16-36 H