A.B. 366
Assembly Bill No. 366–Committee on Government Affairs
March 14, 2001
____________
Referred to Committee on Judiciary
SUMMARY—Revises various provisions governing claims and transactions relating to real property. (BDR 10‑911)
FISCAL NOTE: Effect on Local Government: No.
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EXPLANATION
– Matter in bolded italics is new; matter
between brackets [omitted material] is material to be omitted.
Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).
AN ACT relating to real property; requiring disclosures of certain information by the seller of a new residence; providing for the tolling of statutes of limitation and repose for certain causes of action relating to real property in certain circumstances; specifying that a claim for a constructional defect does not limit, preclude or abate disciplinary action against a contractor; revising provisions governing the recovery of damages in a constructional defect matter; 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 113 of NRS is hereby amended by adding thereto a
1-2 new section to read as follows:
1-3 1. At the time the initial purchaser signs a contract for the purchase
1-4 and sale of a previously unsold residence, the seller shall disclose to the
1-5 purchaser in writing:
1-6 (a) The terms of any settlement, order or judgment relating to a claim
1-7 or action for a constructional defect pursuant to NRS 40.600 to 40.695,
1-8 inclusive, or concerning a sale of real property pursuant to this chapter
1-9 which has been asserted against a person who participated in any
1-10 manner in the development, construction or sale of the residence;
1-11 (b) A description of any complaint filed with the state contractors’
1-12 board relating to a constructional defect pursuant to NRS 40.600 to
1-13 40.695, inclusive, or concerning a sale of real property pursuant to this
1-14 chapter which has been asserted against a person who participated in
1-15 any manner in the development, construction or sale of the residence and
1-16 the disposition of any such complaint;
1-17 (c) A summary of any insurance policies carried by the seller that
1-18 provide coverage for the repair of a constructional defect in the
1-19 residence;
2-1 (d) To the extent that the information is not otherwise provided to a
2-2 purchaser pursuant to NRS 624.600, the name, license number, business
2-3 address and telephone number of each person who participated in any
2-4 manner in the development, construction or sale of the residence; and
2-5 (e) A statement describing any deviation from any applicable building
2-6 code in effect at the time of the development or construction of the
2-7 residence. As used in this paragraph, “building code” means ordinances,
2-8 plans, regulations or rulings adopted by a governmental body to regulate
2-9 and specify the soundness of construction of structures.
2-10 2. A seller who fails substantially to comply with the requirements of
2-11 subsection 1 is liable for a civil penalty of $1,000 which is payable to the
2-12 state contractors’ board for deposit in the account established pursuant
2-13 to NRS 624.470.
2-14 3. The civil penalty provided for in this section is in addition to any
2-15 other remedy or penalty provided by law.
2-16 4. As used in this section, “constructional defect” has the meaning
2-17 ascribed to it in NRS 40.615.
2-18 Sec. 2. Chapter 11 of NRS is hereby amended by adding thereto a new
2-19 section to read as follows:
2-20 1. The statutes of limitation or repose set forth in chapter 11 of NRS
2-21 which are applicable to an action described in NRS 11.203, 11.204 or
2-22 11.205 are tolled during any period after the substantial completion of an
2-23 improvement to real property in which the person who performed or
2-24 furnished the design, planning, supervision or observation of the
2-25 construction, or the construction of an improvement, including, without
2-26 limitation, a residence or an improvement within a common-interest
2-27 community:
2-28 (a) Owned or otherwise controlled the improvement or the common-
2-29 interest community;
2-30 (b) Performed or furnished repairs to the improvement; or
2-31 (c) Agreed to perform or furnish repairs to the improvement,
2-32 regardless of whether the person:
2-33 (1) Actually performed or furnished the repairs; or
2-34 (2) Owned or otherwise controlled the improvement or the
2-35 common-interest community at the time he agreed to perform or furnish
2-36 the repairs.
2-37 2. The provisions of this section do not apply to a cause of action
2-38 against an owner or occupier of real property who did not perform or
2-39 furnish the design, planning, supervision or observation of the
2-40 construction, or the construction of an improvement to real property.
2-41 3. As used in this section:
2-42 (a) “Common-interest community” means any real property that is
2-43 subject to the provisions of chapter 116 or 117 of NRS.
2-44 (b) “Residence” means any real property that is subject to the
2-45 provisions of NRS 40.600 to 40.695, inclusive.
2-46 Sec. 3. NRS 11.203 is hereby amended to read as follows:
2-47 11.203 1. Except as otherwise provided in NRS 11.202 and 11.206,
2-48 and section 2 of this act, no action may be commenced against the owner,
2-49 occupier or any person performing or furnishing the design, planning,
3-1 supervision or observation of construction, or the construction of an
3-2 improvement to real property more than 10 years after the substantial
3-3 completion of such an improvement, for the recovery of damages for:
3-4 (a) Any deficiency in the design, planning, supervision or observation
3-5 of construction or the construction of such an improvement which is
3-6 known or through the use of reasonable diligence should have been known
3-7 to him;
3-8 (b) Injury to real or personal property caused by any such deficiency; or
3-9 (c) Injury to or the wrongful death of a person caused by any such
3-10 deficiency.
3-11 2. Notwithstanding the provisions of NRS 11.190 and subsection 1 of
3-12 this section, if an injury occurs in the 10th year after the substantial
3-13 completion of such an improvement, an action for damages for injury to
3-14 property or person, damages for wrongful death resulting from such injury
3-15 or damages for breach of contract may be commenced within 2 years after
3-16 the date of such injury, irrespective of the date of death, but in no event
3-17 may an action be commenced more than 12 years after the substantial
3-18 completion of the improvement.
3-19 3. The provisions of this section do not apply to a claim for indemnity
3-20 or contribution.
3-21 Sec. 4. NRS 11.204 is hereby amended to read as follows:
3-22 11.204 1. Except as otherwise provided in NRS 11.202, 11.203 and
3-23 11.206, and section 2 of this act, no action may be commenced against the
3-24 owner, occupier or any person performing or furnishing the design,
3-25 planning, supervision or observation of construction, or the construction[,]
3-26 of an improvement to real property more than 8 years after the substantial
3-27 completion of such an improvement, for the recovery of damages for:
3-28 (a) Any latent deficiency in the design, planning, supervision or
3-29 observation of construction or the construction of such an improvement;
3-30 (b) Injury to real or personal property caused by any such deficiency; or
3-31 (c) Injury to or the wrongful death of a person caused by any such
3-32 deficiency.
3-33 2. Notwithstanding the provisions of NRS 11.190 and subsection 1 of
3-34 this section, if an injury occurs in the eighth year after the substantial
3-35 completion of such an improvement, an action for damages for injury to
3-36 property or person, damages for wrongful death resulting from such injury
3-37 or damages for breach of contract may be commenced within 2 years after
3-38 the date of such injury, irrespective of the date of death, but in no event
3-39 may an action be commenced more than 10 years after the substantial
3-40 completion of the improvement.
3-41 3. The provisions of this section do not apply to a claim for indemnity
3-42 or contribution.
3-43 4. For the purposes of this section, “latent deficiency” means a
3-44 deficiency which is not apparent by reasonable inspection.
3-45 Sec. 5. NRS 11.205 is hereby amended to read as follows:
3-46 11.205 1. Except as otherwise provided in NRS 11.202, 11.203 and
3-47 11.206, and section 2 of this act, no action may be commenced against the
3-48 owner, occupier or any person performing or furnishing the design,
3-49 planning, supervision or observation of construction, or the construction of
4-1 an improvement to real property more than 6 years after the substantial
4-2 completion of such an improvement, for the recovery of damages for:
4-3 (a) Any patent deficiency in the design, planning, supervision or
4-4 observation of construction or the construction of such an improvement;
4-5 (b) Injury to real or personal property caused by any such deficiency; or
4-6 (c) Injury to or the wrongful death of a person caused by any such
4-7 deficiency.
4-8 2. Notwithstanding the provisions of NRS 11.190 and subsection 1 of
4-9 this section, if an injury occurs in the sixth year after the substantial
4-10 completion of such an improvement, an action for damages for injury to
4-11 property or person, damages for wrongful death resulting from such injury
4-12 or damages for breach of contract may be commenced within 2 years after
4-13 the date of such injury, irrespective of the date of death, but in no event
4-14 may an action be commenced more than 8 years after the substantial
4-15 completion of the improvement.
4-16 3. The provisions of this section do not apply to a claim for indemnity
4-17 or contribution.
4-18 4. For the purposes of this section, “patent deficiency” means a
4-19 deficiency which is apparent by reasonable inspection.
4-20 Sec. 6. NRS 11.2055 is hereby amended to read as follows:
4-21 11.2055 1. Except as otherwise provided in subsection 2, for the
4-22 purposes of NRS 11.202 to 11.206, inclusive, and section 2 of this act, the
4-23 date of substantial completion of an improvement to real property shall be
4-24 deemed to be the date on which:
4-25 (a) The final building inspection of the improvement is conducted;
4-26 (b) A notice of completion is issued for the improvement; or
4-27 (c) A certificate of occupancy is issued for the
improvement,
4-28 whichever occurs later.
4-29 2. If none of the events described in subsection 1 occurs, the date of
4-30 substantial completion of an improvement to real property must be
4-31 determined by the rules of the common law.
4-32 Sec. 7. NRS 40.635 is hereby amended to read as follows:
4-33 40.635 NRS 40.600 to 40.695, inclusive:
4-34 1. Apply to any claim that arises before, on or after July 1, 1995, as the
4-35 result of a constructional defect, except a claim for personal injury or
4-36 wrongful death, if the claim is the subject of an action commenced on or
4-37 after July 1, 1995.
4-38 2. Prevail over any conflicting law otherwise applicable to the claim or
4-39 cause of action.
4-40 3. Do not bar or limit any defense otherwise available except as
4-41 otherwise provided in those sections.
4-42 4. Do not create a new theory upon which liability may be based.
4-43 5. Do not limit, preclude or abate a disciplinary proceeding against a
4-44 contractor pursuant to chapter 624 of NRS.
4-45 Sec. 8. NRS 40.655 is hereby amended to read as follows:
4-46 40.655 1. Except as otherwise provided in NRS 40.650, in a claim
4-47 governed by NRS 40.600 to 40.695, inclusive, the claimant may recover
5-1 only the following damages to the extent proximately caused by a
5-2 constructional defect:
5-3 (a) Any reasonable attorney’s fees;
5-4 (b) The reasonable cost of any repairs already made that were necessary
5-5 and of any repairs yet to be made that are necessary to cure any
5-6 constructional defect that the contractor failed to cure and the reasonable
5-7 expenses of temporary housing reasonably necessary during the repair;
5-8 (c) The reduction in market value of the residence or accessory
5-9 structure, if any, to the extent the reduction is because of structural failure;
5-10 (d) The reduction in market value of the residence or accessory
5-11 structure, if any, to the extent the reduction is the result of a disclosure
5-12 required pursuant to NRS 40.688;
5-13 (e) The loss of the use of all or any part of the residence;
5-14 [(e)] (f) The reasonable value of any other property damaged by the
5-15 constructional defect;
5-16 [(f)] (g) Any additional costs reasonably incurred by the claimant,
5-17 including, but not limited to, any costs and fees incurred for the retention
5-18 of experts to:
5-19 (1) Ascertain the nature and extent of the constructional defects;
5-20 (2) Evaluate appropriate corrective measures to estimate the value of
5-21 loss of use; and
5-22 (3) Estimate the value of loss of use, the cost of temporary housing
5-23 and the reduction of market value of the residence; and
5-24 [(g)] (h) Any interest provided by statute.
5-25 2. The amount of any attorney’s fees awarded pursuant to this section
5-26 must be approved by the court.
5-27 3. [If] Except as otherwise provided in NRS 11.202 and chapter 116
5-28 of NRS, if a contractor complies with the provisions of NRS 40.600 to
5-29 40.695, inclusive, the claimant may not recover from the contractor, as a
5-30 result of the constructional defect, anything other than that which is
5-31 provided pursuant to NRS 40.600 to 40.695, inclusive.
5-32 4. As used in this section, “structural failure” means physical damage
5-33 to the load-bearing portion of a residence or appurtenance caused by a
5-34 failure of the load-bearing portion of the residence or appurtenance.
5-35 Sec. 9. NRS 624.300 is hereby amended to read as follows:
5-36 624.300 1. Except as otherwise provided in subsection 3, the board
5-37 may:
5-38 (a) Suspend or revoke licenses already issued;
5-39 (b) Refuse renewals of licenses;
5-40 (c) Impose limits on the field, scope and monetary limit of the license;
5-41 (d) Impose an administrative fine of not more than $10,000;
5-42 (e) Order a licensee to repay to the account established pursuant to NRS
5-43 624.470, any amount paid out of the account pursuant to NRS 624.510 as a
5-44 result of an act or omission of that licensee;
5-45 (f) Order the licensee to take action to correct a condition resulting from
5-46 an act which constitutes a cause for disciplinary action, at the licensee’s
5-47 cost, that may consist of requiring the licensee to:
5-48 (1) Perform the corrective work himself;
5-49 (2) Hire and pay another licensee to perform the corrective work; or
6-1 (3) Pay to the owner of the construction project a specified sum to
6-2 correct the condition; or
6-3 (g) Reprimand or take other less severe disciplinary action, including,
6-4 without limitation, increasing the amount of the surety bond or cash deposit
6-5 of the licensee,
6-6 if the licensee commits any act which constitutes a cause for disciplinary
6-7 action.
6-8 2. If the board suspends or revokes the license of a contractor for
6-9 failure to establish financial responsibility, the board may, in addition to
6-10 any other conditions for reinstating or renewing the license, require that
6-11 each contract undertaken by the licensee for a period to be designated by
6-12 the board, not to exceed 12 months, be separately covered by a bond or
6-13 bonds approved by the board and conditioned upon the performance of and
6-14 the payment of labor and materials required by the contract.
6-15 3. If a licensee violates the provisions of NRS 624.3014 or subsection
6-16 3 of NRS 624.3015, the board may impose an administrative fine of not
6-17 more than $20,000.
6-18 4. If a licensee commits a fraudulent act which is a cause for
6-19 disciplinary action under NRS 624.3016, the correction of any condition
6-20 resulting from the act does not preclude the board from taking disciplinary
6-21 action.
6-22 5. If the board finds that a licensee has engaged in repeated acts that
6-23 would be cause for disciplinary action, the correction of any resulting
6-24 conditions does not preclude the board from taking disciplinary action
6-25 pursuant to this section.
6-26 6. The expiration of a license by operation of law or by order or
6-27 decision of the board or a court, or the voluntary surrender of a license by a
6-28 licensee, does not deprive the board of jurisdiction to proceed with any
6-29 investigation of, or action or disciplinary proceeding against, the licensee
6-30 or to render a decision suspending or revoking the license.
6-31 7. A claim or action pursuant to NRS 40.600 to 40.695, inclusive,
6-32 against a licensee does not:
6-33 (a) Preclude or limit the board from taking disciplinary action
6-34 pursuant to this section; or
6-35 (b) Deprive the board of jurisdiction to proceed with any investigation
6-36 of, or action or disciplinary proceeding against, the licensee or to render
6-37 a decision suspending or revoking the license of a licensee.
6-38 8. If discipline is imposed pursuant to this section, including any
6-39 discipline imposed pursuant to a stipulated settlement, the costs of the
6-40 proceeding, including investigative costs and attorney’s fees, may be
6-41 recovered by the board.
6-42 Sec. 10. NRS 624.3016 is hereby amended to read as follows:
6-43 624.3016 The following acts or omissions, among others, constitute
6-44 cause for disciplinary action [under] pursuant to NRS 624.300:
6-45 1. Any fraudulent or deceitful act committed in the capacity of a
6-46 contractor.
6-47 2. A conviction of a violation of NRS 624.730 or a felony or a crime
6-48 involving moral turpitude.
7-1 3. Knowingly making a false statement in or relating to the recording
7-2 of a notice of lien pursuant to the provisions of NRS 108.226.
7-3 4. Failure to give a notice required by NRS 108.245 or 108.246.
7-4 5. Failure to comply with NRS 597.713, 597.716 or 597.719 or any
7-5 regulations of the board governing contracts for the construction of
7-6 residential pools and spas.
7-7 6. Failure to comply with NRS 624.600[.] or section 1 of this act.
7-8 7. Misrepresentation or the omission of a material fact, or the
7-9 commission of any other fraudulent or deceitful act, to obtain a license.
7-10 8. Failure to pay a civil penalty imposed pursuant to section 1 of this
7-11 act or an assessment required pursuant to NRS 624.470.
7-12 Sec. 11. NRS 624.470 is hereby amended to read as follows:
7-13 624.470 1. Except as otherwise provided in subsection 3, in addition
7-14 to the annual fee for a license required pursuant to NRS 624.280, a
7-15 residential contractor shall pay to the board an annual assessment in the
7-16 following amount, if the monetary limit on his license is:
7-17 Not more than $1,000,000............................ $100
7-18 More than $1,000,000 but limited.................... 250
7-19 Unlimited....................................................... 500
7-20 2. The board shall administer and account separately for the money
7-21 received from the annual assessments collected pursuant to subsection 1[.]
7-22 and from any money collected from civil penalties imposed pursuant to
7-23 section 1 of this act. The board may refer to the money in the account as
7-24 the “recovery fund.”
7-25 3. The board shall suspend the collection of assessments pursuant to
7-26 subsection 1 when the balance in the account from assessments reaches
7-27 150 percent of the largest balance in the account from assessments during
7-28 the previous fiscal year.
7-29 4. Except as otherwise provided in NRS 624.540, the money in the
7-30 account must be used to pay claims made by owners who are damaged by
7-31 the failure of a residential contractor to perform qualified services
7-32 adequately, as provided in NRS 624.400 to 624.560, inclusive.
7-33 Sec. 12. 1. The amendatory provisions of section 1 of this act do not
7-34 apply to a contract or agreement for the purchase and sale of a previously
7-35 unsold residence entered into before October 1, 2001.
7-36 2. The amendatory provisions of sections 2 to 8, inclusive, of this act
7-37 do not apply to an action filed before October 1, 2001.
7-38 H