Assembly Bill No. 81–Committee on Judiciary
February 9, 2001
____________
Referred to Committee on Judiciary
SUMMARY—Revises provisions governing claims for
constructional defects, dissolution of corporations and limited-liability
companies and common-interest community associations. (BDR 3‑989)
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; revising provisions governing the enforceability of
arbitration agreements relating to constructional defect matters; revising
provisions governing offers to repair and repair of constructional defects;
revising provisions governing the recovery of damages for constructional
defects; revising provisions governing the dissolution of corporations and
limited-liability companies; prohibiting contractual clauses which require
arbitration in certain circumstances; revising provisions governing the
commencement of a civil action by a common-interest community association; 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. NRS 38.035 is
hereby amended to read as follows:
1-2 38.035 [A] Except as otherwise provided in sections
11 and 13 of this
1-3 act, a written agreement to submit any existing controversy to arbitration
1-4 or a provision in a written
contract to submit to arbitration any controversy
1-5 thereafter arising between
the parties is valid, enforceable and irrevocable,
1-6 save upon such grounds as
exist at law or in equity for the revocation of
1-7 any contract. NRS 38.015 to
38.205, inclusive, also apply to arbitration
1-8 agreements between employers
and employees or between their respective
1-9 representatives unless
otherwise provided in the agreement.
1-10 Sec. 2. NRS 38.045 is hereby amended to read as follows:
1-11 38.045 1. On application of a party showing an
agreement described
1-12 in NRS 38.035, and the
opposing party’s refusal to arbitrate, the court shall
1-13 order the parties to proceed
with arbitration, but if the opposing party
1-14 denies the existence of the
agreement to arbitrate, the court shall proceed
1-15 summarily to the
determination of the issue so raised and shall order
2-1 arbitration if found for the
moving party; otherwise, the application shall be
2-2 denied.
2-3 2. On application, the
court may stay an arbitration proceeding
2-4 commenced or threatened on a
showing that there is no agreement to
2-5 arbitrate [.] or that an agreement to arbitrate is
void pursuant to section
2-6 11 or 13 of this act. Such an issue, when in substantial and bona fide
2-7 dispute, shall be forthwith
and summarily tried and the stay ordered if
2-8 found for the moving party.
If found for the opposing party, the court shall
2-9 order the parties to proceed
to arbitration.
2-10 3. If an issue referable to
arbitration under the alleged agreement is
2-11 involved in an action or
proceeding pending in a court having jurisdiction
2-12 to hear applications under
subsection 1, the application shall be made
2-13 therein. Otherwise and
subject to NRS 38.195, the application may be
2-14 made in any court of
competent jurisdiction.
2-15 4. Any action or proceeding
involving an issue subject to arbitration
2-16 shall be stayed if an order
for arbitration or an application therefor has been
2-17 made under this section or,
if the issue is severable, the stay may be with
2-18 respect thereto only. When
the application is made in such action or
2-19 proceeding, the order for
arbitration shall include such stay.
2-20 5. An order for arbitration
shall not be refused on the ground that the
2-21 claim in issue lacks merit
or bona fides or because any fault or grounds for
2-22 the claim sought to be
arbitrated have not been shown.
2-23 Sec. 3. NRS 38.145 is hereby amended to read as follows:
2-24 38.145 1. Upon application of a party, the court shall
vacate an
2-25 award where:
2-26 (a) The award was procured by corruption, fraud or other undue
means;
2-27 (b) There was evident partiality by an arbitrator appointed as a
neutral
2-28 or corruption in any of the
arbitrators or misconduct substantially
2-29 prejudicing the rights of
any party;
2-30 (c) The arbitrators exceeded their powers;
2-31 (d) The arbitrators refused to postpone the hearing upon sufficient
cause
2-32 being shown therefor or
refused to hear evidence material to the
2-33 controversy or otherwise so
conducted the hearing, contrary to the
2-34 provisions of NRS 38.075, as
to prejudice substantially the rights of a
2-35 party; or
2-36 (e) There was no arbitration agreement or the arbitration agreement
2-37 was void pursuant to section 11 or 13 of this act, and the issue was not
2-38 adversely determined in
proceedings under NRS 38.045 and the party did
2-39 not participate in the
arbitration hearing without raising the objection.
2-40 But the fact that the relief
was such that it could not or would not be
2-41 granted by a court of law or
equity is not ground for vacating or refusing to
2-42 confirm the award.
2-43 2. An application under
this section shall be made within 90 days after
2-44 delivery of a copy of the
award to the applicant, except that, if predicated
2-45 upon corruption, fraud or
other undue means, it shall be made within 90
2-46 days after such grounds are
known or should have been known.
2-47 3. In vacating the award on
grounds other than stated in paragraph (e)
2-48 of subsection 1 the court
may order a rehearing before new arbitrators
2-49 chosen as provided in the
agreement, or in the absence thereof, by the court
3-1 in accordance with NRS
38.055, or, if the award is vacated on grounds set
3-2 forth in paragraphs (c) and
(d) of subsection 1, the court may order a
3-3 rehearing before the
arbitrators who made the award or their successors
3-4 appointed in accordance with
NRS 38.055. The time within which the
3-5 agreement requires the award
to be made is applicable to the rehearing and
3-6 commences from the date of
the order.
3-7 4. If the application to
vacate is denied and no motion to modify or
3-8 correct the award is
pending, the court shall confirm the award.
3-9 Sec. 4. NRS 40.645 is hereby amended to read as
follows:
3-10 40.645 Except as otherwise
provided in this section and NRS 40.670:
3-11 1. For a claim that is not
a complex matter, at least 60 days before a
3-12 claimant commences an action
against a contractor for damages arising
3-13 from a constructional
defect, the claimant must give written notice by
3-14 certified mail, return
receipt requested, to the contractor, at the contractor’s
3-15 last known address,
specifying in reasonable detail the defects or any
3-16 damages or injuries to each
residence or appurtenance that is the subject of
3-17 the claim. The notice must
describe in reasonable detail the cause of the
3-18 defects if the cause is
known, the nature and extent that is known of the
3-19 damage or injury resulting
from the defects and the location of each defect
3-20 within each residence or
appurtenance to the extent known. An expert
3-21 opinion concerning the cause
of the defects and the nature and extent of the
3-22 damage or injury resulting
from the defects based on a representative
3-23 sample of the components of
the residences and appurtenances involved in
3-24 the action satisfies the
requirements of this section. During the 45-day
3-25 period after the contractor
receives the notice, on his written request, the
3-26 contractor is entitled to
inspect the property that is the subject of the claim
3-27 to determine the nature and
cause of the defect, damage or injury and the
3-28 nature and extent of repairs
necessary to remedy the defect. The contractor
3-29 shall, before making the
inspection, provide reasonable notice of the
3-30 inspection and shall make
the inspection at a reasonable time. The
3-31 contractor may take
reasonable steps to establish the existence of the
3-32 defect.
3-33 2. If a residence or
appurtenance that is the subject of the claim is
3-34 covered by a homeowner’s
warranty that is purchased by or on behalf of a
3-35 claimant pursuant to NRS
690B.100 to 690B.180, inclusive, a claimant
3-36 shall diligently pursue a
claim under the contract.
3-37 3. Within 60 days after the
contractor receives the notice, the
3-38 contractor shall make a
written response to the claimant. The response:
3-39 (a) Must be served to the claimant by certified mail, return receipt
3-40 requested, at the claimant’s
last known address.
3-41 (b) Must respond to each constructional defect set forth in the
3-42 claimant’s notice, and
describe in reasonable detail the cause of the defect,
3-43 if known, the nature and
extent of the damage or injury resulting from the
3-44 defect, and, unless the
response is limited to a proposal for monetary
3-45 compensation, the method,
adequacy and estimated cost of any proposed
3-46 repair.
3-47 (c) May include:
3-48 (1) A proposal for monetary compensation, which may include a
3-49 contribution from a
subcontractor.
4-1 (2) If the contractor or his subcontractor is licensed to make
the
4-2 repairs, an agreement by the
contractor or subcontractor to make the
4-3 repairs.
4-4 (3) An agreement by the contractor to cause the repairs to be
made, at
4-5 the [contractor’s expense,]
expense of the contractor, by
another
4-6 contractor who is licensed
to make the repairs, bonded and insured.
4-7 The repairs must be made within
45 days after the contractor receives
4-8 written notice of acceptance
of the response, unless completion is delayed
4-9 by the claimant or by other
events beyond the control of the contractor, or
4-10 timely completion of the
repairs is not reasonably possible. The claimant
4-11 and the contractor may agree
in writing to extend the periods prescribed by
4-12 this section.
4-13 4. A contractor who repairs or causes repairs to be made of a
4-14 constructional defect pursuant to this section shall:
4-15 (a) Pay for an independent
person to supervise and inspect any such
4-16 repair. The independent person must be selected by the claimant and
4-17 must have the appropriate license and qualifications.
4-18 (b) Provide a payment bond
and a performance bond to the claimant
4-19 in an amount not less than 1 1/2 times the market value of the
proposed
4-20 repair. The market value of any proposed repair must be determined
by
4-21 averaging three bids for the proposed repair which are obtained by
the
4-22 contractor from independent contractors who are appropriately
licensed,
4-23 bonded and insured to perform the proposed repair.
4-24 5. Not later than 15 days before the mediation required
pursuant to
4-25 NRS 40.680 and upon
providing 15 days’ notice, each party shall provide
4-26 the other party, or shall
make a reasonable effort to assist the other party to
4-27 obtain, all relevant
reports, photos, correspondence, plans, specifications,
4-28 warranties, contracts,
subcontracts, work orders for repair, videotapes,
4-29 technical reports, soil and
other engineering reports and other documents or
4-30 materials relating to the
claim that are not privileged.
4-31 [5.] 6. If the claimant is a representative of a
homeowner’s association,
4-32 the association shall submit
any response made by the contractor to each
4-33 member of the association.
4-34 [6.] 7. As used in this section, “subcontractor”
means a contractor who
4-35 performs work on behalf of
another contractor in the construction of a
4-36 residence or appurtenance.
4-37 Sec. 5. NRS 40.655 is hereby amended to read as follows:
4-38 40.655 1. Except as otherwise provided in NRS 40.650 [,] and
4-39 40.667, in a claim governed by NRS 40.600 to 40.695, inclusive, the
4-40 claimant may recover only
the following damages to the extent
4-41 proximately caused by a
constructional defect:
4-42 (a) Any reasonable attorney’s fees;
4-43 (b) The reasonable cost of any repairs already made that were
necessary
4-44 and of any repairs yet to be
made that are necessary to cure any
4-45 constructional defect that
the contractor failed to cure and the reasonable
4-46 expenses of temporary
housing reasonably necessary during the repair;
4-47 (c) The reduction in market value of the residence or accessory
4-48 structure, if any, to the
extent the reduction is because of structural failure;
4-49 (d) The loss of the use of all or any part of the residence;
5-1 (e) The reasonable value of any other property damaged by the
5-2 constructional defect;
5-3 (f) Any additional costs reasonably incurred by the claimant,
including,
5-4 but not limited to, any
costs and fees incurred for the retention of experts
5-5 to:
5-6 (1) Ascertain the nature and extent of the constructional
defects;
5-7 (2) Evaluate appropriate corrective measures to estimate the
value of
5-8 loss of use; and
5-9 (3) Estimate the value of loss of use, the cost of temporary
housing
5-10 and the reduction of market
value of the residence; and
5-11 (g) Any interest provided by statute.
5-12 2. The amount of any
attorney’s fees awarded pursuant to this section
5-13 must be approved by the
court.
5-14 3. [If] Except as otherwise provided in NRS 11.202 and chapter 116
5-15 of NRS, if a contractor complies with the provisions of NRS 40.600 to
5-16 40.695, inclusive, the
claimant may not recover from the contractor, as a
5-17 result of the constructional
defect, anything other than that which is
5-18 provided pursuant to NRS
40.600 to 40.695, inclusive.
5-19 4. No contract or agreement may limit or alter the damages that
may
5-20 be recovered pursuant to this section. Any provision of a contract
or
5-21 agreement that conflicts with the provisions of this subsection is
void.
5-22 5. As used in this section,
“structural failure” means physical damage
5-23 to the load-bearing portion
of a residence or appurtenance caused by a
5-24 failure of the load-bearing
portion of the residence or appurtenance.
5-25 Sec. 6. NRS 40.667 is hereby amended to read as follows:
5-26 40.667 1. Except as otherwise provided in subsection 2,
a written
5-27 waiver or settlement
agreement executed by a claimant after a contractor
5-28 has corrected or otherwise
repaired a constructional defect does not bar a
5-29 claim for the constructional
defect if it is determined that the contractor
5-30 failed to correct or repair
the defect properly.
5-31 2. The provisions of
subsection 1 do not apply to any written waiver or
5-32 settlement agreement
described in subsection 1, unless:
5-33 (a) The claimant has obtained the opinion of an expert concerning
the
5-34 constructional defect;
5-35 (b) The claimant has provided the contractor with a written notice
of the
5-36 defect pursuant to NRS
40.645 or 40.682 and a copy of the expert’s
5-37 opinion; and
5-38 (c) The claimant and the contractor have complied with the
5-39 requirements for inspection
and repair as provided in NRS 40.600 to
5-40 40.695, inclusive.
5-41 3. If a claimant does not
prevail in any action which is not barred
5-42 pursuant to this section,
the court may:
5-43 (a) Deny the claimant’s attorney’s fees, fees for an expert witness
or
5-44 costs; and
5-45 (b) Award attorney’s fees and costs to the contractor.
5-46 4. If the court determines in an action which is
not barred pursuant
5-47 to this section that a contractor failed to correct or repair a
5-48 constructional defect properly:
6-1 (a) The limitation on
damages provided in NRS 40.655 does not apply
6-2 and the claimant may recover the damages described in NRS 40.655 in
6-3 addition to any other damages to which he may be entitled;
6-4 (b) The court shall revoke
the license of the contractor and notify the
6-5 state contractors’ board of the revocation; and
6-6 (c) The contractor is liable
to the claimant for damages in an amount
6-7 equal to three times the reasonable cost of repairs necessary to
cure the
6-8 constructional defect that the contractor failed to correct or
repair
6-9 properly.
6-10 Sec. 7. NRS 40.670 is hereby amended to read as follows:
6-11 40.670 1. A contractor who receives written notice of a
6-12 constructional defect
resulting from work performed by the contractor or
6-13 his agent, employee or
subcontractor which creates an imminent threat to
6-14 the health or safety of the
inhabitants of the residence shall take reasonable
6-15 steps to cure the defect as
soon as practicable. The contractor shall not cure
6-16 the defect by making any
repairs for which he is not licensed or by causing
6-17 any repairs to be made by a
person who is not licensed to make those
6-18 repairs. [If]
6-19 2. Except as otherwise provided in subsection 3
or 4, if the
contractor
6-20 fails to cure the defect in
a reasonable time, the owner of the residence may
6-21 have the defect cured and
may recover from the contractor the reasonable
6-22 cost of the repairs plus
reasonable attorney’s fees and costs in addition to
6-23 any other damages
recoverable under any other law.
6-24 [2. A]
6-25 3. Except as otherwise provided in subsection 4,
a contractor
who
6-26 does not cure a defect
pursuant to this section because he has determined,
6-27 in good faith and after a
reasonable inspection, that there is not an
6-28 imminent threat to the
health or safety of the inhabitants is not liable for
6-29 the cost of repairs, attorney’s fees and costs , or other damages relating to
6-30 the defect pursuant to [this section, except that
if a building inspector
6-31 employed by a governmental body with jurisdiction certifies that
there is
6-32 an imminent threat to the health and safety of the inhabitants of
the
6-33 residence, the contractor is subject to the provisions of subsection
1.]
6-34 subsection 2.
6-35 4. If an architect or residential designer
registered pursuant to
6-36 chapter 623 of NRS, or a professional engineer licensed pursuant to
6-37 chapter 625 of NRS, certifies that the defect creates an imminent
threat
6-38 to the health or safety of the inhabitants of the residence, and if
the trier
6-39 of fact determines that the contractor refused to correct the
defect in a
6-40 timely manner and was not acting in good faith, the owner of the
6-41 residence is entitled to recover from the contractor, in addition
to
6-42 reasonable attorney’s fees and costs, treble the reasonable cost of
the
6-43 repairs and other damages.
6-44 Sec. 8. NRS 78.585 is hereby amended to read as follows:
6-45 78.585 [The]
6-46 1. Except as otherwise provided in subsection 2,
the dissolution
of a
6-47 corporation does not impair
any claim, remedy or
cause of action available
6-48 to or against it or its
directors, officers or shareholders arising before its
6-49 dissolution and commenced
within 2 years after the date of the dissolution.
7-1 It continues as a body
corporate for the purpose of prosecuting and
7-2 defending suits, actions,
proceedings and claims of any kind or character
7-3 by or against it and of
enabling it gradually to settle and close its business,
7-4 to collect and discharge its
obligations, to dispose of and convey its
7-5 property, and to distribute
its assets, but not for the purpose of continuing
7-6 the business for which it
was established.
7-7 2. The dissolution of a corporation does not
impair any claim,
7-8 remedy or cause of action available to or against it or its
directors,
7-9 officers or shareholders arising pursuant to NRS 40.600 to 40.695,
7-10 inclusive, before or after its dissolution and commenced before the
7-11 expiration of a statute of limitation or repose applicable to the
claim,
7-12 remedy or cause of action.
7-13 Sec. 9. NRS 78.615 is hereby amended to read as follows:
7-14 78.615 [If]
7-15 1. Except as otherwise provided in subsection 2,
if any corporation
7-16 organized [under]
pursuant to this
chapter becomes dissolved by the
7-17 expiration of its charter or
otherwise, before final judgment obtained in any
7-18 action pending or commenced
in any court of record of this state against
7-19 the corporation, the action [shall not abate by reason thereof,] must
not
7-20 abate because of the dissolution of the corporation, but the dissolution of
7-21 the corporation being
suggested upon the record, and the names of the
7-22 trustees or receivers of the
corporation being entered upon the record, and
7-23 notice thereof served upon
the trustees or receivers, or ,
if such service [be]
7-24 is impracticable ,
upon the counsel of record in such case, the action [shall]
7-25 must proceed to final judgment against the trustees or receivers [by] in the
7-26 name of the corporation.
7-27 2. A pending action or proceeding for a claim,
remedy or cause of
7-28 action arising pursuant to NRS 40.600 to 40.695, inclusive, against
a
7-29 corporation organized pursuant to this chapter, whether commenced
7-30 before or after the corporation becomes dissolved, must not abate
7-31 because of the dissolution of the corporation, but must proceed
against
7-32 the trustees or receivers in the name of the corporation.
7-33 Sec. 10. NRS 86.505
is hereby amended to read as follows:
7-34 86.505 [The]
7-35 1. Except as otherwise provided in subsection 2,
the dissolution
of a
7-36 limited-liability company
does not impair any claim,
remedy or cause of
7-37 action available to or
against it or its managers or members arising before
7-38 its dissolution and
commenced within 2 years after the date of the
7-39 dissolution. A dissolved
company continues as a company for the purpose
7-40 of prosecuting and defending
suits, actions, proceedings and claims of any
7-41 kind or nature by or against
it and of enabling it gradually to settle and
7-42 close its business, to
collect and discharge its obligations, to dispose of and
7-43 convey its property, and to
distribute its assets, but not for the purpose of
7-44 continuing the business for
which it was established.
7-45 2. The dissolution of a limited-liability
company does not impair any
7-46 claim, remedy or cause of action available to or against it or its
managers
7-47 or members arising pursuant to NRS 40.600 to 40.695, inclusive,
before
7-48 or after its dissolution and commenced before the expiration of a
statute
7-49 of limitation or repose applicable to the claim, remedy or cause of
action.
8-1 Sec. 11. Chapter 113 of NRS is hereby amended by adding thereto a
8-2 new section to read as
follows:
8-3 1. A seller shall not include in a contract for
the purchase and sale
8-4 of real property in this state that is entered into on or after
October 1,
8-5 2001, a provision requiring binding or nonbinding arbitration of a
claim
8-6 involving a constructional defect which is governed by NRS 40.600
to
8-7 40.695, inclusive.
8-8 2. A provision of a contract that conflicts with
the provisions of
8-9 subsection 1 is void.
8-10 3. The provisions of this section do not:
8-11 (a) Prohibit parties to a
claim involving a constructional defect that is
8-12 governed by NRS 40.600 to 40.695, inclusive, from agreeing to
8-13 participate in binding or nonbinding arbitration, or any other
alternative
8-14 method of resolving a dispute after a claim is commenced pursuant
to
8-15 NRS 40.600 to 40.695, inclusive.
8-16 (b) Apply to the arbitration
of a matter that is otherwise required by
8-17 law or rule of court.
8-18 4. As used in this section, “constructional
defect” has the meaning
8-19 ascribed to it in NRS 40.615.
8-20 Sec. 12. NRS 116.3115 is hereby amended to read as follows:
8-21 116.3115 1. Until the association makes an assessment for
common
8-22 expenses, the declarant
shall pay all common expenses. After an
8-23 assessment has been made by
the association, assessments must be made at
8-24 least annually, based on a
budget adopted at least annually by the
8-25 association in accordance
with the requirements set forth in NRS
8-26 116.31151. Except for an
association for a time-share project governed by
8-27 the provisions of chapter
119A of NRS, and unless the declaration imposes
8-28 more stringent standards, the
budget must include a budget for the daily
8-29 operation of the association
and the money for the reserve required by
8-30 paragraph (b) of subsection
2.
8-31 2. Except for assessments
under subsections 4 to 7, inclusive:
8-32 (a) All common expenses, including a reserve, must be assessed
against
8-33 all the units in accordance
with the allocations set forth in the declaration
8-34 pursuant to subsections 1
and 2 of NRS 116.2107.
8-35 (b) The association shall establish an adequate reserve, funded on
a
8-36 reasonable basis, for the
repair, replacement and restoration of the major
8-37 components of the common
elements. The reserve may be used only for
8-38 those purposes, including,
without limitation, repairing, replacing and
8-39 restoring roofs, roads and
sidewalks, and must not be used for daily
8-40 maintenance.
8-41 3. Any past due assessment
for common expenses or installment
8-42 thereof bears interest at
the rate established by the association not
8-43 exceeding 18 percent per
year.
8-44 4. To the extent required
by the declaration:
8-45 (a) Any common expense associated with the maintenance, repair,
8-46 restoration or replacement
of a limited common element must be assessed
8-47 against the units to which
that limited common element is assigned,
8-48 equally, or in any other
proportion the declaration provides;
9-1 (b) Any common expense or portion thereof benefiting fewer than all
of
9-2 the units must be assessed
exclusively against the units benefited; and
9-3 (c) The costs of insurance must be assessed in proportion to risk
and the
9-4 costs of utilities must be
assessed in proportion to usage.
9-5 5. Assessments to pay a
judgment against the association may be made
9-6 only against the units in
the common-interest community at the time the
9-7 judgment was entered, in
proportion to their liabilities for common
9-8 expenses.
9-9 6. If any common expense is
caused by the misconduct of any unit’s
9-10 owner, the association may
assess that expense exclusively against his unit.
9-11 7. The association of a
common-interest community created before
9-12 January 1, 1992, is not
required to make an assessment against a vacant lot
9-13 located within the community
that is owned by the declarant.
9-14 8. If liabilities for
common expenses are reallocated, assessments for
9-15 common expenses and any
installment thereof not yet due must be
9-16 recalculated in accordance
with the reallocated liabilities.
9-17 9. The association shall
provide written notice to the owner of each
9-18 unit of a meeting at which
an assessment for a capital improvement or the
9-19 commencement of a civil action
is to be considered or action is to be taken
9-20 on such an assessment at least 21 calendar days
before the meeting.
9-21 10. Except as otherwise provided in this subsection [,] and subsection
9-22 11, the association may commence a civil action only upon a vote or
9-23 written agreement of the
owners of units to which at least a majority of the
9-24 votes of the members of the
association are allocated. If the
association,
9-25 after making a good faith effort, cannot obtain a majority of votes
or
9-26 agreements to commence a civil action, the association may commence
9-27 the civil action, unless a majority of votes at the time a vote was
taken
9-28 were against commencement of the civil action. If an action is
9-29 commenced before the association obtains the required number of
votes,
9-30 the association must obtain a ratification for the commencement of
the
9-31 civil action within 90 days after the action is commenced by a vote
or
9-32 written agreement of the owners of units to which at least a
majority of
9-33 votes of the members of the association are allocated. If such
ratification
9-34 is not obtained, the association shall seek dismissal of the action
without
9-35 prejudice only if a majority of votes at the time a vote was taken
were in
9-36 favor of the dismissal.
9-37 11. The provisions of [this]
subsection 10 do not
apply to a civil action
9-38 that is commenced:
9-39 (a) By an association for a time-share project governed by the
9-40 provisions of chapter 119A
of NRS;
9-41 (b) To enforce the payment of an assessment;
9-42 (c) To enforce the declaration, bylaws or rules of the association;
9-43 (d) To proceed with a counterclaim; or
9-44 (e) To protect the health, safety and welfare of the members of the
9-45 association. [If a civil action is commenced pursuant to this paragraph
9-46 without the required vote or agreement, the action must be ratified
within
9-47 90 days after the commencement of the action by a vote or written
9-48 agreement of the owners of the units to which at least a majority of
votes of
9-49 the members of the association are allocated. If the association,
after
10-1 making a good faith effort, cannot obtain the required vote or
agreement to
10-2 commence or ratify such a civil action, the association may
thereafter seek
10-3 to dismiss the action without prejudice for that reason only if a
vote or
10-4 written agreement of the owners of the units to which at least a
majority of
10-5 votes of the members of the association are allocated was obtained
at the
10-6 time the approval to commence or ratify the action was sought.
10-7 10.] 12. At
least 10 days before an association commences or seeks to
10-8 ratify the commencement of a
civil action, the association shall provide a
10-9 written statement to all
units’ owners that includes:
10-10 (a) A reasonable estimate of the costs of the civil action,
including
10-11 reasonable attorney’s fees;
10-12 (b) An explanation of the potential benefits of the civil action and
the
10-13 potential adverse
consequences if the association does not commence the
10-14 action or if the outcome of
the action is not favorable to the association;
10-15 and
10-16 (c) All disclosures that are required to be made upon the sale of
the
10-17 property.
10-18 [11.] 13.
No person other than a unit’s owner may
request the
10-19 dismissal of a civil action
commenced by the association on the ground that
10-20 the association failed to
comply with any provision of this section.
10-21 Sec. 13. Chapter 624 of NRS is hereby amended by adding thereto a
10-22 new section to read as
follows:
10-23 1. A contractor shall not include in any contract or agreement for
10-24 the purchase and sale of real property, or for the repair,
alteration of or
10-25 addition to a new or existing residence, or of an appurtenance that
is
10-26 entered into on or after October 1, 2001, a provision requiring
binding or
10-27 nonbinding arbitration of a claim involving a constructional defect
10-28 which is governed by NRS 40.600 to 40.695, inclusive.
10-29 2. A provision of a contract or agreement that conflicts with the
10-30 provisions of subsection 1 is void.
10-31 3. The provisions of this section do not:
10-32 (a) Prohibit parties to a
claim involving a constructional defect that is
10-33 governed by NRS 40.600 to 40.695, inclusive, from agreeing to
10-34 participate in binding or nonbinding arbitration, or any other
alternative
10-35 method of resolving a dispute after a claim has been commenced
10-36 pursuant to NRS 40.600 to 40.695, inclusive.
10-37 (b) Apply to the arbitration
of a matter that is otherwise required by
10-38 law or rule of court.
10-39 4. As used in this section, “constructional defect” has the meaning
10-40 ascribed to it in NRS 40.615.
10-41 Sec. 14. NRS 624.300 is hereby amended to read as follows:
10-42 624.300 1. Except as otherwise provided in [subsection 3,]
10-43 subsections 3 and 7, the board may:
10-44 (a) Suspend or revoke licenses already issued;
10-45 (b) Refuse renewals of licenses;
10-46 (c) Impose limits on the field, scope and monetary limit of the
license;
10-47 (d) Impose an administrative fine of not more than $10,000;
11-1 (e) Order a licensee to repay to the account established pursuant
to NRS
11-2 624.470, any amount paid out
of the account pursuant to NRS 624.510 as a
11-3 result of an act or omission
of that licensee;
11-4 (f) Order the licensee to take action to correct a condition
resulting from
11-5 an act which constitutes a
cause for disciplinary action, at the licensee’s
11-6 cost, that may consist of
requiring the licensee to:
11-7 (1) Perform the corrective work himself;
11-8 (2) Hire and pay another licensee to perform the corrective work;
or
11-9 (3) Pay to the owner of the construction project a specified sum
to
11-10 correct the condition; or
11-11 (g) Reprimand or take other less severe disciplinary action,
including,
11-12 without limitation,
increasing the amount of the surety bond or cash deposit
11-13 of the licensee,
11-14 if the licensee commits any
act which constitutes a cause for disciplinary
11-15 action.
11-16 2. If the board suspends or
revokes the license of a contractor for
11-17 failure to establish
financial responsibility, the board may, in addition to
11-18 any other conditions for
reinstating or renewing the license, require that
11-19 each contract undertaken by
the licensee for a period to be designated by
11-20 the board, not to exceed 12
months, be separately covered by a bond or
11-21 bonds approved by the board
and conditioned upon the performance of and
11-22 the payment of labor and
materials required by the contract.
11-23 3. If a licensee violates
the provisions of NRS 624.3014 or subsection
11-24 3 of NRS 624.3015, the board
may impose an administrative fine of not
11-25 more than $20,000.
11-26 4. If a licensee commits a
fraudulent act which is a cause for
11-27 disciplinary action under
NRS 624.3016, the correction of any condition
11-28 resulting from the act does
not preclude the board from taking disciplinary
11-29 action.
11-30 5. If the board finds that a
licensee has engaged in repeated acts that
11-31 would be cause for
disciplinary action, the correction of any resulting
11-32 conditions does not preclude
the board from taking disciplinary action
11-33 pursuant to this section.
11-34 6. The expiration of a
license by operation of law or by order or
11-35 decision of the board or a
court, or the voluntary surrender of a license by a
11-36 licensee, does not deprive
the board of jurisdiction to proceed with any
11-37 investigation of, or action
or disciplinary proceeding against, the licensee
11-38 or to render a decision
suspending or revoking the license.
11-39 7. A licensee whose license has been revoked by an order of the
court
11-40 pursuant to NRS 40.667 may apply for reinstatement of his license
if he
11-41 prevails on appeal and the order of the court revoking his license
is
11-42 reversed.
11-43 8. If discipline is imposed pursuant to this section, including any
11-44 discipline imposed pursuant
to a stipulated settlement, the costs of the
11-45 proceeding, including
investigative costs and attorney’s fees, may be
11-46 recovered by the board.
12-1 Sec. 15. 1. The amendatory
provisions of this act do not apply to an
12-2 action or suit filed before
October 1, 2001.
12-3 2. The amendatory
provisions of this act apply to a contract or
12-4 agreement entered into on or
after October 1, 2001.
12-5 H