A.B. 477
Assembly Bill No. 477–Assemblyman Dini
March 19, 2001
____________
Referred to Committee on Commerce and Labor
SUMMARY—Revises procedures for resolving matters involving constructional defects. (BDR 54‑1250)
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 a claimant to present a claim of constructional defect to the state contractors’ board for review and investigation before commencing an action based upon the claim; revising provisions governing the duties of the state contractors’ board to require the board to review and investigate claims of constructional defects; revising the definition of a constructional defect; eliminating mandatory mediation in cases involving a constructional defect; and providing other matters properly relating thereto.
Whereas, The State of Nevada is the fastest growing state in the nation; and
Whereas, As a result, Nevada is experiencing an increase in new home construction to meet the demands of its increasing population; and
Whereas, Every resident of this state deserves to live in a safe home that is free from hazardous defects; and
Whereas, On occasion, during the course of new home construction, mistakes may be made resulting in construction defects; and
Whereas, The legislature wishes to encourage builders to repair identified construction defects in a timely and responsible manner; and
Whereas, To accomplish this goal, homeowners need to cooperate and allow builders an opportunity to repair identified defects; and
Whereas, The legislature further wishes to encourage homeowners and builders to resolve allegations of construction defects in a manner which avoids litigating in an overburdened court system; now, therefore,
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
1-1 Section 1. Chapter 624 of NRS is hereby amended by adding thereto
1-2 the provisions set forth as sections 2 to 11, inclusive, of this act.
2-1 Sec. 2. As used in sections 2 to 11, inclusive, of this act, unless the
2-2 context otherwise requires, the words and terms defined in sections 3, 4
2-3 and 5 of this act have the meanings ascribed to them in those sections.
2-4 Sec. 3. “Claimant” has the meaning ascribed to it in NRS 40.610.
2-5 Sec. 4. “Constructional defect” has the meaning ascribed to it in
2-6 NRS 40.615.
2-7 Sec. 5. “Contractor” has the meaning ascribed to it in NRS 40.620.
2-8 Sec. 6. 1. The board shall review each claim of a constructional
2-9 defect submitted to it pursuant to NRS 40.680.
2-10 2. A claim of a constructional defect is properly presented to the
2-11 board by submitting a copy of the written notice of constructional defects
2-12 provided to a contractor by a claimant pursuant to subsection 1 of NRS
2-13 40.645 or subsection 1 of NRS 40.682.
2-14 3. After a claimant has presented a claim to the board pursuant to
2-15 subsection 2, a contractor shall immediately provide a copy of his
2-16 response to the claimant’s written notice of defects that he prepared
2-17 pursuant to NRS 40.645 or 40.682, as applicable, to the board.
2-18 4. The board shall investigate each claim submitted to the board
2-19 pursuant to subsection 1. The investigation must be completed within 30
2-20 days after the claim is submitted to the board pursuant to subsection 2.
2-21 5. Upon completion of the investigation, the board shall issue an
2-22 advisory opinion concerning the claim of a constructional defect not
2-23 later than 2 weeks after the investigation is completed.
2-24 Sec. 7. As part of the investigation conducted pursuant to section 6
2-25 of this act, the board may hold a hearing on a claim of a constructional
2-26 defect submitted to the board pursuant to section 6 of this act after giving
2-27 notice of the time, place and nature of the hearing:
2-28 1. If the board, in its discretion, determines that a hearing is
2-29 necessary; or
2-30 2. Upon the written request of either party to the claim.
2-31 Sec. 8. 1. If the board issues an advisory opinion pursuant to
2-32 section 6 of this act that is, at least in part, favorable to the claimant, the
2-33 board may order the contractor to:
2-34 (a) Make repairs at the contractor’s expense, if the contractor is
2-35 licensed to make the repairs; or
2-36 (b) Cause the repairs to be made, at the contractor’s expense, by
2-37 another contractor who is licensed to make the repairs, bonded and
2-38 insured.
2-39 2. Except as otherwise provided in subsection 4, any repairs ordered
2-40 pursuant to this section must be completed within the time provided by
2-41 the board in the order.
2-42 3. A copy of the order must be served on each party to the claim
2-43 personally, or by registered or certified mail. The order is effective upon
2-44 such service, unless the board orders otherwise.
2-45 4. A contractor may petition the board, by written request supported
2-46 by an affidavit of the contractor, for an extension of the time for
2-47 completion of repairs if completion is delayed by the claimant or by other
2-48 events beyond the control of the contractor, or if timely completion of the
2-49 repairs is not reasonably possible.
3-1 5. An order of the board pursuant to this section is a final order as to
3-2 the contractor for the purpose of judicial review.
3-3 6. If the board orders a contractor to make repairs or cause repairs
3-4 to be made pursuant to this section, the claimant shall, upon reasonable
3-5 notice from the contractor, allow the contractor reasonable access to the
3-6 residence or appurtenance to make repairs or cause the repairs to be
3-7 made.
3-8 7. If a claimant prevents a contractor from making repairs which
3-9 have been ordered by the board pursuant to this section, the claimant
3-10 may not recover damages in any subsequent action filed pursuant to NRS
3-11 40.680:
3-12 (a) Associated with the defect that the contractor was prevented from
3-13 repairing; or
3-14 (b) For damage to other parts of the residence or appurtenance that is
3-15 the proximate result of the refusal of the claimant to allow a contractor
3-16 to make repairs pursuant to this section.
3-17 8. As used in this section:
3-18 (a) “Appurtenance” has the meaning ascribed to it in NRS 40.605.
3-19 (b) “Residence” has the meaning ascribed to it in NRS 40.630.
3-20 Sec. 9. The board shall adopt regulations to carry out the provisions
3-21 of sections 2 to 11, inclusive, of this act that must include, without
3-22 limitation:
3-23 1. The standards to be used in reviewing a claim of a constructional
3-24 defect;
3-25 2. The form in which the advisory opinion of the board concerning a
3-26 claim will be issued;
3-27 3. The procedures which the parties to a claim and the board must
3-28 follow during the review process, that are consistent with the provisions
3-29 of chapter 233B of NRS; and
3-30 4. Any other rules and procedures reasonably necessary for the
3-31 board to carry out its duties pursuant to sections 2 to 11, inclusive, of this
3-32 act.
3-33 Sec. 10. An advisory opinion and any order of the board requiring a
3-34 contractor to make repairs or cause repairs to be made are admissible in
3-35 any action concerning the claim of a constructional defect that is
3-36 subsequently filed in district court. No other evidence concerning the
3-37 board or its deliberations is admissible, and no member of the board may
3-38 be called to testify in any such action.
3-39 Sec. 11. The board and its members acting pursuant to sections 2 to
3-40 11, inclusive, of this act are immune from any civil liability for any
3-41 decision or action taken in good faith and without malicious intent in
3-42 response to a claim submitted to the board.
3-43 Sec. 12. NRS 624.020 is hereby amended to read as follows:
3-44 624.020 1. [For the purpose of] As used in this chapter, [“contractor”
3-45 is synonymous with “builder.”
3-46 2. Within the meaning of this chapter, a contractor is] unless the
3-47 context otherwise requires, “contractor”:
3-48 (a) Means any person, except a registered architect or a licensed
3-49 professional engineer, acting solely in his professional capacity, who in any
4-1 capacity other than as the employee of another with wages as the sole
4-2 compensation, undertakes to, or offers to undertake to, or purports to have
4-3 the capacity to undertake to, or submits a bid to, or does himself or by or
4-4 through others, construct, alter, repair, add to, subtract from, improve,
4-5 move, wreck or demolish any building, highway, road, railroad, excavation
4-6 or other structure, project, development or improvement, or to do any part
4-7 thereof, including the erection of scaffolding or other structures or works in
4-8 connection therewith.
4-9 (b) Is synonymous with “builder.”
4-10 2. Evidence of the securing of any permit from a governmental agency
4-11 or the employment of any person on a construction project must be
4-12 accepted by the board or any court of this state as prima facie evidence that
4-13 the person securing that permit or employing any person on a construction
4-14 project is acting in the capacity of a contractor pursuant to the provisions of
4-15 this chapter.
4-16 3. A contractor [within the meaning of this chapter] includes :
4-17 (a) A subcontractor or specialty contractor, but does not include anyone
4-18 who merely furnishes materials or supplies without fabricating them into,
4-19 or consuming them in the performance of, the work of a contractor.
4-20 [4. A contractor within the meaning of this chapter includes a]
4-21 (b) A construction manager who performs management and counseling
4-22 services on a construction project for a professional fee.
4-23 Sec. 13. NRS 624.302 is hereby amended to read as follows:
4-24 624.302 The following acts or omissions, among others, constitute
4-25 cause for disciplinary action pursuant to NRS 624.300:
4-26 1. Contracting, offering to contract or submitting a bid as a contractor
4-27 if the contractor’s license:
4-28 (a) Has been suspended or revoked pursuant to NRS 624.300; or
4-29 (b) Is inactive.
4-30 2. Failure to comply with a written citation issued pursuant to NRS
4-31 624.341 within the time permitted for compliance set forth in the citation
4-32 [,] or, if a hearing is held pursuant to NRS 624.291, within 15 business
4-33 days after the hearing.
4-34 3. Except as otherwise provided in subsection 2, failure to pay an
4-35 administrative fine imposed pursuant to this chapter within 30 days after:
4-36 (a) Receiving notice of the imposition of the fine; or
4-37 (b) The final administrative or judicial decision affirming the imposition
4-38 of the fine,
4-39 whichever occurs later.
4-40 4. The suspension, revocation or other disciplinary action taken by
4-41 another state against a contractor based on a license issued by that state if
4-42 the contractor is licensed in this state or applies for a license in this state. A
4-43 certified copy of the suspension, revocation or other disciplinary action
4-44 taken by another state against a contractor based on a license issued by that
4-45 state is conclusive evidence of that action.
4-46 5. Failure or refusal to respond to a written request from the board or
4-47 its designee to cooperate in the investigation of a complaint.
5-1 6. Failure or refusal to comply with a written request by the board or
5-2 its designee for information or records, or obstructing or delaying the
5-3 providing of such information or records.
5-4 7. Failure or refusal to comply with a written order issued pursuant
5-5 to section 8 of this act within the time required for completion of repairs
5-6 set forth in the order.
5-7 Sec. 14. NRS 40.615 is hereby amended to read as follows:
5-8 40.615 “Constructional defect” [includes a defect in the design,
5-9 construction, manufacture, repair or landscaping of a new residence, of an
5-10 alteration of or addition to an existing residence, or of an appurtenance.
5-11 The term includes physical damage to the] means a condition that
5-12 materially affects the value or use of a residence, an appurtenance or the
5-13 real property to which the residence or appurtenance is affixed [that is
5-14 proximately caused by a constructional defect.] in an adverse manner.
5-15 Sec. 15. NRS 40.635 is hereby amended to read as follows:
5-16 40.635 NRS 40.600 to 40.695, inclusive[:] , and sections 2 to 11,
5-17 inclusive, of this act:
5-18 1. Apply to any claim that arises before, on or after July 1, 1995, as the
5-19 result of a constructional defect, except a claim for personal injury or
5-20 wrongful death, if the claim is the subject of an action commenced on or
5-21 after July 1, 1995.
5-22 2. Prevail over any conflicting law otherwise applicable to the claim or
5-23 cause of action.
5-24 3. Do not bar or limit any defense otherwise available except as
5-25 otherwise provided in those sections.
5-26 4. Do not create a new theory upon which liability may be based.
5-27 Sec. 16. NRS 40.645 is hereby amended to read as follows:
5-28 40.645 Except as otherwise provided in this section and NRS 40.670:
5-29 1. For a claim that is not a complex matter, [at least 60 days] before a
5-30 claimant submits a claim of a constructional defect to the state
5-31 contractors’ board for review pursuant to NRS 40.680 and sections 2 to
5-32 11, inclusive, of this act and before a claimant commences an action
5-33 against a contractor for damages arising from a constructional defect, the
5-34 claimant must give written notice by certified mail, return receipt
5-35 requested, to the contractor, at the contractor’s last known address,
5-36 specifying in reasonable detail the defects or any damages or injuries to
5-37 each residence or appurtenance that is the subject of the claim. The notice
5-38 must describe in reasonable detail the cause of the defects if the cause is
5-39 known, the nature and extent that is known of the damage or injury
5-40 resulting from the defects and the location of each defect within each
5-41 residence or appurtenance to the extent known. An expert opinion
5-42 concerning the cause of the defects and the nature and extent of the damage
5-43 or injury resulting from the defects based on a representative sample of the
5-44 components of the residences and appurtenances involved in the action
5-45 satisfies the requirements of this section. During the 45-day period after the
5-46 contractor receives the notice, on his written request, the contractor [is
5-47 entitled to] may inspect the property that is the subject of the claim to
5-48 determine the nature and cause of the defect, damage or injury and the
5-49 nature and extent of repairs necessary to remedy the defect. The contractor
6-1 shall, before making the inspection, provide reasonable notice of the
6-2 inspection and shall make the inspection at a reasonable time. The
6-3 contractor may take reasonable steps to establish the existence of the
6-4 defect.
6-5 2. If a residence or appurtenance that is the subject of the claim is
6-6 covered by a homeowner’s warranty that is purchased by or on behalf of a
6-7 claimant pursuant to NRS 690B.100 to 690B.180, inclusive, a claimant
6-8 shall diligently pursue a claim under the contract.
6-9 3. Within 60 days after the contractor receives the notice, the
6-10 contractor shall make a written response to the claimant. The response:
6-11 (a) Must be served to the claimant by certified mail, return receipt
6-12 requested, at the claimant’s last known address.
6-13 (b) Must respond to each constructional defect set forth in the
6-14 claimant’s notice, and describe in reasonable detail the cause of the defect,
6-15 if known, the nature and extent of the damage or injury resulting from the
6-16 defect, and, unless the response is limited to a proposal for monetary
6-17 compensation, the method, adequacy and estimated cost of any proposed
6-18 repair.
6-19 (c) May include:
6-20 (1) A proposal for monetary compensation, which may include a
6-21 contribution from a subcontractor.
6-22 (2) If the contractor or his subcontractor is licensed to make the
6-23 repairs, an agreement by the contractor or subcontractor to make the
6-24 repairs.
6-25 (3) An agreement by the contractor to cause the repairs to be made, at
6-26 the contractor’s expense, by another contractor who is licensed to make the
6-27 repairs, bonded and insured.
6-28 The repairs must be made within 45 days after the contractor receives
6-29 written notice of acceptance of the response, unless completion is delayed
6-30 by the claimant or by other events beyond the control of the contractor, or
6-31 timely completion of the repairs is not reasonably possible. The claimant
6-32 and the contractor may agree in writing to extend the periods prescribed by
6-33 this section.
6-34 4. [Not later than 15 days before the mediation required pursuant to
6-35 NRS 40.680 and upon providing 15 days’ notice, each party shall provide
6-36 the other party, or shall make a reasonable effort to assist the other party to
6-37 obtain, all relevant reports, photos, correspondence, plans, specifications,
6-38 warranties, contracts, subcontracts, work orders for repair, videotapes,
6-39 technical reports, soil and other engineering reports and other documents or
6-40 materials relating to the claim that are not privileged.
6-41 5.] If the claimant is a representative of a homeowner’s association,
6-42 the association shall submit any response made by the contractor to each
6-43 member of the association.
6-44 [6.] 5. As used in this section, “subcontractor” means a contractor
6-45 who performs work on behalf of another contractor in the construction of a
6-46 residence or appurtenance.
6-47 Sec. 17. NRS 40.650 is hereby amended to read as follows:
6-48 40.650 1. If a claimant unreasonably rejects a reasonable written
6-49 offer of settlement made as part of a response made pursuant to NRS
7-1 40.645 or 40.682 or does not permit the contractor or independent
7-2 contractor a reasonable opportunity to repair the defect pursuant to an
7-3 accepted offer of settlement and thereafter commences an action governed
7-4 by NRS 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this
7-5 act, the court in which the action is commenced may:
7-6 (a) Deny the claimant’s attorney’s fees and costs; and
7-7 (b) Award attorney’s fees and costs to the contractor.
7-8 Any sums paid under a homeowner’s warranty, other than sums paid in
7-9 satisfaction of claims that are collateral to any coverage issued to or by the
7-10 contractor, must be deducted from any recovery.
7-11 2. If a contractor fails to:
7-12 (a) Make an offer of settlement;
7-13 (b) Make a good faith response to the claim asserting no liability; or
7-14 (c) Complete, in a good and workmanlike manner, the repairs specified
7-15 in an accepted offer , [;
7-16 (d) Agree to a mediator or accept the appointment of a mediator
7-17 pursuant to NRS 40.680 or subsection 4 of NRS 40.682; or
7-18 (e) Participate in mediation,]
7-19 the limitations on damages and defenses to liability provided in NRS
7-20 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act do
7-21 not apply . [and the claimant may commence an action without satisfying
7-22 any other requirement of NRS 40.600 to 40.695, inclusive.]
7-23 3. If coverage under a homeowner’s warranty is denied by an insurer
7-24 in bad faith, the homeowner and the contractor have a right of action for
7-25 the sums that would have been paid if coverage had been provided, plus
7-26 reasonable attorney’s fees and costs.
7-27 Sec. 18. NRS 40.655 is hereby amended to read as follows:
7-28 40.655 1. Except as otherwise provided in NRS 40.650[,] and
7-29 section 8 of this act, in a claim governed by NRS 40.600 to 40.695,
7-30 inclusive, and sections 2 to 11, inclusive, of this act, the claimant may
7-31 recover only the following damages to the extent proximately caused by a
7-32 constructional defect:
7-33 (a) Any reasonable attorney’s fees;
7-34 (b) The reasonable cost of any repairs already made that were necessary
7-35 and of any repairs yet to be made that are necessary to cure any
7-36 constructional defect that the contractor failed to cure and the reasonable
7-37 expenses of temporary housing reasonably necessary during the repair;
7-38 (c) The reduction in market value of the residence or accessory
7-39 structure, if any, to the extent the reduction is because of structural failure;
7-40 (d) The loss of the use of all or any part of the residence;
7-41 (e) The reasonable value of any other property damaged by the
7-42 constructional defect;
7-43 (f) Any additional costs reasonably incurred by the claimant, including,
7-44 but not limited to, any costs and fees incurred for the retention of experts
7-45 to:
7-46 (1) Ascertain the nature and extent of the constructional defects;
7-47 (2) Evaluate appropriate corrective measures to estimate the value of
7-48 loss of use; and
8-1 (3) Estimate the value of loss of use, the cost of temporary housing
8-2 and the reduction of market value of the residence; and
8-3 (g) Any interest provided by statute.
8-4 2. The amount of any attorney’s fees awarded pursuant to this section
8-5 must be approved by the court.
8-6 3. If a contractor complies with the provisions of NRS 40.600 to
8-7 40.695, inclusive, the claimant may not recover from the contractor, as a
8-8 result of the constructional defect, anything other than that which is
8-9 provided pursuant to NRS 40.600 to 40.695, inclusive.
8-10 4. As used in this section, “structural failure” means physical damage
8-11 to the load-bearing portion of a residence or appurtenance caused by a
8-12 failure of the load-bearing portion of the residence or appurtenance.
8-13 Sec. 19. NRS 40.668 is hereby amended to read as follows:
8-14 40.668 1. Notwithstanding the provisions of NRS 40.600 to 40.695,
8-15 inclusive, and sections 2 to 11, inclusive, of this act, a claimant may not
8-16 commence an action against a subdivider or master developer for a
8-17 constructional defect in an appurtenance constructed on behalf of the
8-18 subdivider or master developer in a planned unit development, to the extent
8-19 that the appurtenance was constructed by or through a licensed general
8-20 contractor, unless:
8-21 (a) The subdivider or master developer fails to provide to the claimant
8-22 the name, address and telephone number of each contractor hired by the
8-23 subdivider or master developer to construct the appurtenance within 30
8-24 days of the receipt by the subdivider or master developer of a request from
8-25 the claimant for such information; or
8-26 (b) After the claimant has made a good faith effort to obtain full
8-27 recovery from the contractors hired by the subdivider or master developer
8-28 to construct the appurtenance, the claimant has not obtained a full
8-29 recovery.
8-30 2. All statutes of limitation or repose applicable to a claim governed by
8-31 this section are tolled from the time the claimant notifies a contractor hired
8-32 by the subdivider or master developer of the claim until the earlier of the
8-33 date:
8-34 (a) A court determines that the claimant cannot obtain a full recovery
8-35 against those contractors; or
8-36 (b) The claimant receives notice that those contractors are bankrupt,
8-37 insolvent or dissolved.
8-38 Tolling pursuant to this subsection applies only to the subdivider or master
8-39 developer. Notwithstanding any applicable statute of limitation or repose,
8-40 the claimant may commence an action against the subdivider or master
8-41 developer for the claim within 1 year after the end of the tolling described
8-42 in this subsection.
8-43 3. Nothing in this section prohibits the commencement of an action
8-44 against a subdivider or master developer for a constructional defect in a
8-45 residence sold, designed or constructed by or on behalf of the subdivider or
8-46 master developer.
8-47 4. Nothing in this section prohibits a person other than the claimant
8-48 from commencing an action against a subdivider or master developer to
8-49 enforce his own rights.
9-1 5. The provisions of this section do not apply to a subdivider or master
9-2 developer who acts as a general contractor or uses his license as a general
9-3 contractor in the course of constructing the appurtenance that is the subject
9-4 of the action.
9-5 6. As used in this section:
9-6 (a) “Master developer” means a person who buys, sells or develops a
9-7 planned unit development, including, without limitation, a person who
9-8 enters into a development agreement pursuant to NRS 278.0201.
9-9 (b) “Planned unit development” has the meaning ascribed to it in NRS
9-10 278A.065.
9-11 (c) “Subdivider” has the meaning ascribed to it in NRS 278.0185.
9-12 Sec. 20. NRS 40.675 is hereby amended to read as follows:
9-13 40.675 1. A contractor who makes or provides for repairs under NRS
9-14 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act may
9-15 take reasonable steps to prove that the repairs were made and to have them
9-16 inspected.
9-17 2. The provisions of NRS 40.600 to 40.695, inclusive, and sections 2
9-18 to 11, inclusive, of this act regarding inspection and repair are in addition
9-19 to any rights of inspection and settlement provided by common law or by
9-20 another statute.
9-21 Sec. 21. NRS 40.680 is hereby amended to read as follows:
9-22 40.680 1. Except as otherwise provided in this chapter, before an
9-23 action based on a claim governed by NRS 40.600 to 40.695, inclusive, and
9-24 sections 2 to 11, inclusive, of this act may be commenced in court, the
9-25 matter must be submitted to [mediation, unless mediation is waived in
9-26 writing by the contractor and the claimant.
9-27 2. The claimant and contractor must select a mediator by agreement. If
9-28 the claimant and contractor fail to agree upon a mediator within 45 days
9-29 after a mediator is first selected by the claimant, either party may petition
9-30 the American Arbitration Association, the Nevada Arbitration Association,
9-31 Nevada Dispute Resolution Services or any other mediation service
9-32 acceptable to the parties for the appointment of a mediator. A mediator so
9-33 appointed may discover only those documents or records which are
9-34 necessary to conduct the mediation. The mediator shall convene the
9-35 mediation within 60 days after the matter is submitted to him, unless the
9-36 parties agree to extend the time. Except in a complex matter, the claimant
9-37 shall, before the mediation begins, deposit $50 with the mediation service
9-38 and the contractor shall deposit with the mediation service the remaining
9-39 amount estimated by the mediation service as necessary to pay the fees and
9-40 expenses of the mediator for the first session of mediation, and the
9-41 contractor shall deposit additional amounts demanded by the mediation
9-42 service as incurred for that purpose. In a complex matter, each party shall
9-43 share equally in the deposits estimated by the mediation service. Unless
9-44 otherwise agreed, the total fees for each day of mediation and the mediator
9-45 must not exceed $750 per day.
9-46 3. If the parties do not reach an agreement concerning the matter
9-47 during mediation or if the contractor fails to pay the required fees and
9-48 appear, the claimant may commence his action in court and:
10-1 (a) The reasonable costs and fees of the mediation are recoverable by
10-2 the prevailing party as costs of the action.
10-3 (b) Either party may petition the court in which the action is
10-4 commenced for the appointment of a special master.
10-5 4. A special master appointed pursuant to subsection 3 may:
10-6 (a) Review all pleadings, papers or documents filed with the court
10-7 concerning the action.
10-8 (b) Coordinate the discovery of any books, records, papers or other
10-9 documents by the parties, including the disclosure of witnesses and the
10-10 taking of the deposition of any party.
10-11 (c) Order any inspections on the site of the property by a party and any
10-12 consultants or experts of a party.
10-13 (d) Order settlement conferences and attendance at those conferences by
10-14 any representative of the insurer of a party.
10-15 (e) Require any attorney representing a party to provide statements of
10-16 legal and factual issues concerning the action.
10-17 (f) Refer to the judge who appointed him or to the presiding judge of the
10-18 court in which the action is commenced any matter requiring assistance
10-19 from the court.
10-20 The special master shall not, unless otherwise agreed by the parties,
10-21 personally conduct any settlement conferences or engage in any ex parte
10-22 meetings regarding the action.
10-23 5. Upon application by a party to the court in which the action is
10-24 commenced, any decision or other action taken by a special master
10-25 appointed pursuant to this section may be appealed to the court for a
10-26 decision.
10-27 6. A report issued by a mediator or special master that indicates that
10-28 either party has failed to appear before him or to mediate in good faith is
10-29 admissible in the action, but a statement or admission made by either party
10-30 in the course of mediation is not admissible.] the state contractors’ board
10-31 for review pursuant to sections 2 to 11, inclusive, of this act within 30
10-32 days after the expiration of the time for the:
10-33 (a) Contractor to provide a written response to the claimant’s written
10-34 notice of defects pursuant to NRS 40.645 or 40.682;
10-35 (b) Claimant to accept an offer made as part of a written response by
10-36 the contractor to the claimant’s written notice of defects pursuant to NRS
10-37 40.645 or 40.682, if such an offer is made; or
10-38 (c) Contractor to complete repairs made as part of a written response
10-39 by the contractor to the claimant’s written notice of defects pursuant to
10-40 NRS 40.645 or 40.682 that is accepted by the claimant, including,
10-41 without limitation, any extension of the period for completing repairs
10-42 which has been agreed to in writing by the claimant and
contractor,
10-43 whichever is later.
10-44 2. Any action involving a constructional defect that is filed without
10-45 satisfying the requirements of NRS 40.600 to 40.695, inclusive, and
10-46 sections 2 to 11, inclusive, of this act must be dismissed without prejudice
10-47 for failure to comply with this section.
11-1 3. After the state contractors’ board has issued an advisory opinion
11-2 concerning a claim of a constructional defect pursuant to the provisions
11-3 of section 6 of this act, a claimant may proceed to file an action based on
11-4 a claim governed by NRS 40.600 to 40.695, inclusive, and sections 2 to
11-5 11, inclusive, of this act.
11-6 Sec. 22. NRS 40.682 is hereby amended to read as follows:
11-7 40.682 Except as otherwise provided in this section and NRS 40.670:
11-8 1. [Notwithstanding the provisions of subsection 1 of NRS 40.680, a
11-9 claimant may commence an action in district court in a complex matter. If
11-10 the claimant commences an action in district court he shall:
11-11 (a) File and serve the summons and complaint as required by law; and
11-12 (b) At the same time and in the same manner as the claimant serves the
11-13 summons and complaint upon the contractor, serve upon the contractor]
11-14 For a claim that is a complex matter, before a claimant submits a claim
11-15 of a constructional defect to the state contractors’ board for review
11-16 pursuant to sections 2 to 11, inclusive, of this act and before a claimant
11-17 commences an action against a contractor for damages arising from a
11-18 constructional defect, the claimant must give a written notice by certified
11-19 mail, return receipt requested, to the contractor, at the contractor’s last
11-20 known address, specifying in reasonable detail, to the extent known, the
11-21 defects and any damages or injuries to each residence or appurtenance that
11-22 is the subject of the claim. The notice must describe in reasonable detail
11-23 each defect, the specific location of each defect, and the nature and extent
11-24 that is known of the damage or injury resulting from each defect. If an
11-25 expert opinion has been rendered concerning the existence or extent of the
11-26 defects, a written copy of the opinion must accompany the notice. An
11-27 expert opinion that specifies each defect to the extent known, the specific
11-28 location of each defect to the extent known, and the nature and extent that
11-29 is known of the damage or injury resulting from each defect, based on a
11-30 valid and reliable representative sample of the residences and
11-31 appurtenances involved in the action, satisfies the requirements of this
11-32 section.
11-33 2. [The contractor shall file and serve an answer to the complaint as
11-34 required by law.
11-35 3. Not later than 30 days after the date of service of the answer to the
11-36 complaint, the contractor and claimant shall meet to establish a schedule
11-37 for:
11-38 (a) The exchange of or reasonable access for the other party to all
11-39 relevant reports, photos, correspondence, plans, specifications, warranties,
11-40 contracts, subcontracts, work orders for repair, videotapes, technical
11-41 reports, soil and other engineering reports and other documents or
11-42 materials relating to the claim that are not privileged;
11-43 (b) The inspection of] During the 60 days after the contractor receives
11-44 the notice, on his written request, the contractor may:
11-45 (a) Inspect the residence or appurtenance that is the subject of the claim
11-46 to evaluate the defects set forth in the notice served pursuant to subsection
11-47 1; and
11-48 [(c) The conduct of]
12-1 (b) Conduct any tests that are reasonably necessary to determine the
12-2 nature and cause of a defect or any damage or injury, and the nature and
12-3 extent of repairs necessary to remedy a defect or any damage or injury. The
12-4 party conducting the test shall provide reasonable notice of the test to all
12-5 other parties and conduct the test at a reasonable time.
12-6 [4. At the meeting held pursuant to subsection 3, the claimant and
12-7 contractor shall:
12-8 (a) Establish a schedule for the addition of any additional parties to the
12-9 complaint or to file any third-party complaint against an additional party
12-10 who may be responsible for all or a portion of the defects set forth in the
12-11 notice served pursuant to subsection 1;
12-12 (b) Unless the claimant and contractor agree otherwise in writing, select
12-13 a mediator and proceed with mediation as provided in subsections 2 to 6,
12-14 inclusive, of NRS 40.680; and
12-15 (c) If the claimant and contractor agree, select a special master and
12-16 jointly petition the court for his appointment pursuant to subsection 7.
12-17 5. Each party added to the complaint or against whom a third-party
12-18 complaint is filed pursuant to subsection 4 shall file and serve an answer as
12-19 required by law.
12-20 6. If the claimant or contractor adds a party to the complaint or files a
12-21 third-party complaint, then not later than 60 days after the date determined
12-22 pursuant to paragraph (a) of subsection 4, the contractor, claimant and each
12-23 party added to the complaint or against whom a third-party complaint is
12-24 filed shall meet to establish a schedule for the activities set forth in
12-25 paragraphs (a), (b) and (c) of subsection 3.
12-26 7. If a special master has not been appointed, the contractor, claimant
12-27 or a party added to the complaint or against whom a third-party complaint
12-28 is filed may petition the court for the appointment of a special master at
12-29 any time after the meeting held pursuant to subsection 3. The special
12-30 master may:
12-31 (a) Take any action set forth in subsection 4 of NRS 40.680;
12-32 (b) Exercise any power set forth in Rule 53 of the Nevada Rules of Civil
12-33 Procedure; and
12-34 (c) Subject to the provisions of NRS 40.680, if the parties fail to
12-35 establish a schedule or determine a date as required in subsection 3, 4 or 6,
12-36 establish the schedule or determine the date.
12-37 8. Unless the mediation required pursuant to paragraph (b) of
12-38 subsection 4 is completed or the contractor and claimant have agreed in
12-39 writing not to mediate the claim pursuant to paragraph (b) of subsection 4,
12-40 a party shall not propound interrogatories or requests for admission, take a
12-41 deposition or file a motion that is dispositive of the action except:
12-42 (a) Upon agreement of the parties; or
12-43 (b) With the prior approval of the court or special master.
12-44 9.] 3. If a residence or appurtenance that is the subject of the claim is
12-45 covered by a homeowner’s warranty that is purchased by or on behalf of a
12-46 claimant pursuant to NRS 690B.100 to 690B.180, inclusive, a claimant
12-47 shall diligently pursue a claim under the contract.
13-1 [10. Unless the parties agree otherwise, not less than 60 days before
13-2 the date of the mediation pursuant to paragraph (b) of subsection 4 is
13-3 convened,]
13-4 4. Within 90 days after the contractor receives the notice, the
13-5 contractor shall make a written response to the claimant that meets the
13-6 requirements set forth in subsection 3 of NRS 40.645.
13-7 [11.] 5. If the claimant is a representative of a homeowner’s
13-8 association, the association shall submit any response made by the
13-9 contractor to each member of the association in writing not more than 30
13-10 days after the date the claimant receives the response.
13-11 [12.] 6. The claimant shall respond to the written response of the
13-12 contractor within 45 days after the response of the contractor is mailed to
13-13 the claimant.
13-14 7. If a claimant accepts an offer to repair made as a part of a written
13-15 response of a contractor pursuant to this section, the contractor shall
13-16 complete the repairs or cause the repairs to be completed within 90 days
13-17 after the contractor receives written notice of acceptance of the response,
13-18 unless completion is delayed by the claimant or by other events beyond
13-19 the control of the contractor, or timely completion of the repairs is not
13-20 reasonably possible. The claimant and the contractor may agree in
13-21 writing to extend the periods prescribed by this section.
13-22 Sec. 23. NRS 40.688 is hereby amended to read as follows:
13-23 40.688 1. If a claimant attempts to sell a residence that is or has been
13-24 the subject of a claim governed by NRS 40.600 to 40.695, inclusive, and
13-25 sections 2 to 11, inclusive, of this act, he shall disclose, in writing, to any
13-26 prospective purchaser of the residence, not less than 30 days before the
13-27 close of escrow for the sale of the residence or, if escrow is to close less
13-28 than 30 days after the execution of the sales agreement, then immediately
13-29 upon the execution of the sales agreement or, if a claim is initiated less
13-30 than 30 days before the close of escrow, within 24 hours after giving
13-31 written notice to the contractor pursuant to subsection 1 of NRS 40.645 or
13-32 subsection 1 of NRS 40.682:
13-33 (a) All notices given by the claimant to the contractor pursuant to NRS
13-34 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act that
13-35 are related to the residence;
13-36 (b) All opinions the claimant has obtained from experts regarding a
13-37 constructional defect that is or has been the subject of the claim;
13-38 (c) The terms of any settlement, order or judgment relating to the claim;
13-39 and
13-40 (d) A detailed report of all repairs made to the residence by or on behalf
13-41 of the claimant as a result of a constructional defect that is or has been the
13-42 subject of the claim.
13-43 2. Before taking any action on a claim pursuant to NRS 40.600 to
13-44 40.695, inclusive, and sections 2 to 11, inclusive, of this act, the attorney
13-45 for a claimant shall notify the claimant in writing of the provisions of this
13-46 section.
14-1 Sec. 24. NRS 40.689 is hereby amended to read as follows:
14-2 40.689 1. Upon petition by a party:
14-3 (a) The court shall give preference in setting a date for the trial of an
14-4 action commenced pursuant to NRS 40.600 to 40.695, inclusive[;] , and
14-5 sections 2 to 11, inclusive, of this act; and
14-6 (b) The court may assign an action commenced pursuant to NRS 40.600
14-7 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act to a senior
14-8 judge.
14-9 2. If the action is assigned to a senior judge upon petition by a party:
14-10 (a) Any additional expenses caused by the assignment must be borne
14-11 equally by each party involved; or
14-12 (b) The judge may distribute any additional expenses among the parties
14-13 as he deems appropriate.
14-14 Sec. 25. NRS 40.690 is hereby amended to read as follows:
14-15 40.690 1. A claim governed by NRS 40.600 to 40.695, inclusive,
14-16 and sections 2 to 11, inclusive, of this act may not be brought by a
14-17 claimant or contractor against a government, governmental agency or
14-18 political subdivision of a government[,] during the period in which a claim
14-19 for a constructional defect is being settled[, mediated] or otherwise
14-20 resolved pursuant to NRS 40.600 to 40.695, inclusive[.] , and sections 2 to
14-21 11, inclusive, of this act. The settlement of such a claim does not affect the
14-22 rights or obligations of the claimant or contractor in any action brought by
14-23 the claimant or contractor against a third party.
14-24 2. A contractor or claimant may require a party against whom the
14-25 contractor or claimant asserts a claim governed by NRS 40.600 to 40.695,
14-26 inclusive, and sections 2 to 11, inclusive, of this act to appear and
14-27 participate in proceedings held pursuant to those sections as if the party
14-28 were a contractor and the party requiring him to appear were a claimant.
14-29 The party must receive notice of the proceedings from the contractor or
14-30 claimant.
14-31 Sec. 26. NRS 40.692 is hereby amended to read as follows:
14-32 40.692 If, after complying with the procedural requirements of NRS
14-33 [40.645 and 40.680, or NRS 40.682,] 40.600 to 40.695, inclusive, and
14-34 sections 2 to 11, inclusive, of this act, a claimant proceeds with an action
14-35 for damages arising from a constructional defect:
14-36 1. The claimant and each contractor who is named in the original
14-37 complaint when the action is commenced are not required, while the action
14-38 is pending, to comply with the requirements of NRS [40.645 or 40.680, or
14-39 NRS 40.682,] 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive,
14-40 of this act for any constructional defect that the claimant includes in an
14-41 amended complaint, if the constructional defect:
14-42 (a) Is attributable, in whole or in part, to such a contractor;
14-43 (b) Is located on the same property described in the original complaint;
14-44 and
14-45 (c) Was not discovered before the action was commenced provided that
14-46 a good faith effort had been undertaken by the claimant.
14-47 2. The claimant is not required to give written notice of a defect
14-48 pursuant to subsection 1 of NRS 40.645 or subsection 1 of NRS 40.682 to
15-1 any person who is joined to or intervenes in the action as a party after it is
15-2 commenced. If such a person becomes a party to the action:
15-3 (a) For the purposes of subsection 1 of NRS 40.645 or subsection 1 of
15-4 NRS 40.682, the person shall be deemed to have been given notice of the
15-5 defect by the claimant on the date on which the person becomes a party to
15-6 the action; and
15-7 (b) The provisions of NRS 40.600 to 40.695, inclusive, and sections 2
15-8 to 11, inclusive, of this act apply to the person after that date.
15-9 Sec. 27. NRS 40.695 is hereby amended to read as follows:
15-10 40.695 1. Except as otherwise provided in subsection 2, statutes of
15-11 limitation or repose applicable to a claim based on a constructional defect
15-12 governed by NRS 40.600 to 40.695, inclusive, and sections 2 to 11,
15-13 inclusive, of this act are tolled from the time notice of the claim is given,
15-14 until [30] :
15-15 (a) Thirty days after [mediation is concluded or waived in writing
15-16 pursuant to NRS 40.680 or subsection 4 of NRS 40.682.] an advisory
15-17 opinion is rendered by the state contractors’ board pursuant to sections 2
15-18 to 11, inclusive, of this act; or
15-19 (b) If the state contractors’ board issues an order requiring a
15-20 contractor to repair a constructional defect pursuant to section 8 of this
15-21 act, 45 days after the expiration of the time provided by the board for the
15-22 completion of repairs,
15-23 whichever is later.
15-24 2. Tolling under this section applies[:
15-25 (a) Only to a claim that is not a complex matter.
15-26 (b) To] to a third party regardless of whether the party is required to
15-27 appear in the proceeding.
15-28 Sec. 28. NRS 113.135 is hereby amended to read as follows:
15-29 113.135 1. Upon signing a sales agreement with the initial purchaser
15-30 of residential property that was not occupied by the purchaser for more
15-31 than 120 days after substantial completion of the construction of the
15-32 residential property, the seller shall:
15-33 (a) Provide to the initial purchaser a copy of NRS 11.202 to 11.206,
15-34 inclusive, and 40.600 to 40.695, inclusive[;] , and sections 2 to 11,
15-35 inclusive, of this act;
15-36 (b) Notify the initial purchaser of any soil report prepared for the
15-37 residential property or for the subdivision in which the residential property
15-38 is located; and
15-39 (c) If requested in writing by the initial purchaser not later than 5 days
15-40 after signing the sales agreement, provide to the purchaser , without cost ,
15-41 each report described in paragraph (b) not later than 5 days after the seller
15-42 receives the written request.
15-43 2. Not later than 20 days after receipt of all reports pursuant to
15-44 paragraph (c) of subsection 1, the initial purchaser may rescind the sales
15-45 agreement.
15-46 3. The initial purchaser may waive his right to rescind the sales
15-47 agreement pursuant to subsection 2. Such a waiver is effective only if it is
15-48 made in a written document that is signed by the purchaser.
16-1 Sec. 29. The amendatory provisions of this act do not apply to a claim
16-2 initiated or an action commenced pursuant to NRS 40.600 to 40.695,
16-3 inclusive, before October 1, 2001.
16-4 H