2001 REGULAR SESSION (71st) A AB133 R1 622
ASSEMBLY ACTION Initial and Date |SENATE ACTION Initial and Date
Adopted Lost | Adopted Lost
Concurred In Not |Concurred In Not
Receded Not | Receded Not
Amend section 1, page 1, line 2, by deleting “2, 3 and 4” and inserting “2 to 11, inclusive,”
Amend sec. 2, page 1, line 3, by deleting “40.670:” and inserting:
“40.670 and subsection 1 of section 9 of this act:”.
Amend the bill as a whole by renumbering sec. 2 as sec. 5 and adding new sections designated sections 2 through 4, following section 1, to read as follows:
“Sec. 2. “Design professional” means a person who holds a professional license or certificate issued pursuant to chapter 623, 623A or 625 of NRS.
Sec. 3. “Subcontractor” means a contractor who performs work on behalf of another contractor in the construction of a residence or appurtenance.
Sec. 4. “Supplier” means a person who provides materials, equipment or other supplies for the construction of a residence or appurtenance.”.
Amend sec. 2, page 2, by deleting lines 1 through 46 and inserting:
“2. Within 15 days after receiving a notice pursuant to subsection 1, a contractor shall forward a copy of the notice by certified mail, return receipt requested, to each subcontractor, supplier and design professional who the contractor reasonably believes is responsible for a defect specified in the notice and include with the copy of the notice the specific defect for which the contractor believes the subcontractor, supplier or design professional is responsible.
3. The claimant shall, upon reasonable notice, allow the contractor and a subcontractor, supplier or design professional who received the notice pursuant to subsection 2 to access the residence or appurtenance that is the subject of the notice to determine the nature and extent of a defect and the nature and extent of repairs necessary to remedy the defect.
4. Within 15 days after a subcontractor, supplier or design professional receives a copy of a notice pursuant to subsection 2, he shall provide the contractor with a statement indicating:
(a) Whether the subcontractor, supplier or design professional will repair the defect for which the contractor believes the subcontractor, supplier or design professional is responsible; and
(b) If the subcontractor, supplier or design professional decides to repair the defect, an estimate of the length of time required for the repair, and at least two proposed dates on and times at which the subcontractor, supplier or design professional can begin making the repair.”.
Amend the bill as a whole by renumbering sections 3 through 12 as sections 10 through 19 and adding new sections designated sections 6 through 9, following sec. 2, to read as follows:
“Sec. 6. Except as otherwise provided in NRS 40.670:
1. Except as otherwise provided in NRS 40.672, a contractor who receives notice of a constructional defect pursuant to subsection 1 of section 5 of this act may make the repairs necessary to remedy the defects and repair any damage or injury to the residence or appurtenance described in the notice or arrange to have such repairs made by a subcontractor, supplier or design professional to whom the contractor forwarded notice of the defect pursuant to subsection 2 of section 5 of this act. The contractor shall ensure that any such repairs are completed within a reasonable time, but in any event:
(a) If the constructional defect is not part of a complex matter, not later than 45 days after receiving the notice; or
(b) If the constructional defect is part of a complex matter, not later than 90 days after receiving the notice,
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unless the claimant and the
contractor negotiate in good faith and agree in writing to extend reasonably
the time for completing the repairs in which case the repairs must be completed
not later than the time set forth in the agreement.
2. In making repairs pursuant to subsection 1, the contractor or a subcontractor, supplier or design professional who is responsible for making the repairs shall:
(a) Make the repairs at reasonable times that are agreed to in advance by the claimant, or by the owner of the residence or appurtenance if the claimant is a representative of a homeowner’s association;
(b) Ensure that all of the work to make the repairs is completed by contractors and subcontractors who are properly licensed, bonded and insured;
(c) Take any action necessary to prevent a mechanic’s lien from being obtained on the property of the claimant on which the repairs are being made, to remove such a mechanic’s lien if one is obtained, and to indemnify the claimant against any expenses incurred by the claimant concerning such a mechanic’s lien; and
(d) Provide to the claimant a written report of each repair made, the method used to make the repair and the parts replaced in making such repairs within 10 days after the repairs are made.
3. The claimant shall allow the contractor and a subcontractor, supplier or design professional who is responsible for making repairs pursuant to subsection 1 a reasonable opportunity to make repairs pursuant to subsection 1.
4. If the claimant is not satisfied with the repairs made pursuant to subsection 1 or NRS 40.672 or the contractor does not make the repairs or have the repairs made within the time set forth in subsection 1 or within the time agreed to in writing by the claimant and the contractor, the claimant may commence an action governed by NRS 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act against the contractor for a constructional defect or any damages or injuries that were specified in the notice provided to the contractor pursuant to section 5 of this act. A claimant who is not satisfied with the repairs is not required to give additional notice pursuant to NRS 40.645 or 40.682 before commencing such an action.
Sec. 7. 1. Except as otherwise provided in subsection 3, a contractor who does not provide a subcontractor, supplier or design professional with notice of a constructional defect pursuant to subsection 2 of section 5 of this act who the contractor reasonably believes is responsible for a defect specified in the notice provided to the contractor pursuant to subsection 1 of section 5 of this act, may not recover attorney’s fees, costs, fees for expert witnesses or fees for consultants from the subcontractor, supplier or design professional that are incurred by the contractor in defending an action against the contractor for the constructional defect pursuant to NRS 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act.
2. Except as otherwise provided in subsection 3, after a claimant files a claim against a contractor that is governed by NRS 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act, a subcontractor, supplier or design professional who is responsible for a constructional defect involved in the claim and who did not receive notice of the defect pursuant to subsection 2 of section 5 of this act may present directly to the claimant an offer to repair the defect. If the claimant accepts the offer, the subcontractor, supplier or design professional repairs the defect to the satisfaction of the claimant and the claimant provides a statement in writing to the subcontractor, supplier or design professional indicating that the defect was repaired to his satisfaction, the contractor against whom the claim was filed may not pursue any claim related to the defect that was repaired against the subcontractor, supplier or design professional who repaired the defect.
3. The provisions of this section do not apply to a contractor who did not give notice of the constructional defect to the subcontractor, supplier or design professional if the contractor could not, after a good faith effort, identify the subcontractor, supplier or design professional who may have been responsible for the defect within the time set forth for providing a notice to the subcontractor, supplier or design professional.
Sec. 8. 1. A contractor, subcontractor, supplier or design professional who receives notice of a constructional defect pursuant to section 5 of this act may present the notice to an insurer who issued a policy of insurance covering all or part of the conduct or business of the contractor, subcontractor, supplier or design professional.
2. A notice provided to an insurer pursuant to subsection 1:
(a) Constitutes the making of a claim under the policy by the contractor, subcontractor, supplier or design professional; and
(b) Requires the contractor, subcontractor, supplier or design professional and the insurer to perform any obligations or duties required by the policy upon the making of a claim.
Sec. 9. 1. A claimant is not required to provide a contractor with notice pursuant to section 5 of this act before commencing an action against the contractor for damages arising from a constructional defect if:
(a) The contractor has threatened or initiated legal proceedings against the claimant at any time;
(b) The claimant has been sued by a third party or the contractor in connection with or resulting from a constructional defect and the claimant is filing a third-party complaint or cross-complaint against the contractor concerning that constructional defect; or
(c) The contractor has threatened to commit or committed an act of violence or a criminal offense against the claimant or the property of the claimant, or the claimant has a reasonable belief that the contractor intends to commit an act of violence or a criminal offense against the claimant or the property of the claimant.
2. Nothing in sections 5 to 9, inclusive, of this act affects the ability of claimants to maintain a class action for constructional defects against a contractor.
3. Nothing in sections 5 to 9, inclusive, of this act affects the ability of a claimant, contractor, subcontractor, supplier or design professional to pursue any remedy available through the state contractors’ board pursuant to chapter 624 of NRS.”.
Amend sec. 3, pages 2 and 3, by deleting lines 48 and 49 on page 2 and line 1 on page 3 and inserting:
“action pursuant to NRS 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act for the professional negligence of a design professional or a person primarily engaged in the practice of professional engineering, land surveying, architecture or landscape architecture, concurrently with”.
Amend sec. 3, page 3, by deleting lines 6 through 9 and inserting:
“(b) Has consulted with an expert;”.
Amend sec. 3, page 3, line 10, by deleting “design professional” and inserting “expert”.
Amend sec. 3, page 3, line 13, by deleting “design professional” and inserting “expert”.
Amend sec. 3, page 3, lines 16 and 17, by deleting:
“a design professional” and inserting “an expert”.
Amend sec. 3, page 3, line 19, by deleting “repose.” and inserting:
“repose, or other limitations prescribed by law.”.
Amend sec. 3, page 3, line 22, by deleting:
“a design professional” and inserting “an expert”.
Amend sec. 3, page 3, line 28, by deleting “design professional” and inserting “expert”.
Amend sec. 3, page 3, line 30, by deleting “design professional;” and inserting “expert;”.
Amend sec. 3, page 3, lines 31 and 32, by deleting:
“design professional is licensed or registered in this state and” and inserting:
“expert”.
Amend sec. 3, page 3, lines 34 and 35, by deleting “design professional” and inserting “expert”.
Amend sec. 3, page 3, line 36, by deleting “design professional” and inserting “expert”.
Amend sec. 3, page 3, line 39, by deleting “design professional” and inserting “expert”.
Amend sec. 3, page 3, line 41, by deleting “design professional” and inserting “expert”.
Amend sec. 3, page 4, by deleting lines 9 through 15.
Amend sec. 3, page 4, line 16, by deleting:
“6. A design professional” and inserting:
“5. An expert”.
Amend sec. 3, page 4, by deleting lines 18 through 22 and inserting:
“6. As used in this section, “expert” means a person who:
(a) Is licensed in a state to engage in the practice of professional engineering, land surveying, architecture or landscape architecture; or
(b) Teaches or has taught at an accredited college or university in a discipline relevant to the action.”.
Amend sec. 4, page 4, by deleting lines 23 through 27 and inserting:
“Sec. 11. 1. The court shall dismiss an action filed pursuant to NRS 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act for the professional negligence of a design professional or a person primarily engaged in the practice of professional engineering, land surveying, architecture or landscape architecture if the attorney for a complainant fails to:”.
Amend sec. 4, page 4, line 28, by deleting “3” and inserting “10”.
Amend sec. 4, page 4, line 29, by deleting “section 3” and inserting “section 10”.
Amend sec. 4, page 4, line 31, by deleting “design professional” and inserting “expert”.
Amend sec. 4, page 4, line 32, by deleting “3” and inserting “10”.
Amend sec. 4, page 4, line 34, by deleting “3” and inserting “10”.
Amend sec. 5, page 4, lines 37 and 38, by deleting:
“2, 3 and 4” and inserting:
“2 to 11, inclusive,”.
Amend sec. 5, page 4, line 39, after “inclusive,” by inserting:
“and sections 2 to 11, inclusive, of this act”.
Amend sec. 6, page 4, line 45 by deleting:
“2 of section 2” and inserting:
“1 of section 6”.
Amend sec. 6, page 4, line 46, by deleting:
“2 of section 2” and inserting:
“1 of section 6”.
Amend sec. 6, page 6, by deleting lines 11 through 13 and inserting:
“[6. As used in this section, “subcontractor” means a contractor who performs work on behalf of another contractor in the construction of a residence or appurtenance.]”.
Amend sec. 7, page 6, line 19, by deleting “2” and inserting “6”.
Amend sec. 7, page 6, line 20, after “inclusive,” by inserting:
“and sections 2 to 11, inclusive, of this act,”.
Amend sec. 7, page 6, line 31, by deleting “2” and inserting “6”.
Amend sec. 7, page 6, line 36, after “inclusive,” by inserting:
“and sections 2 to 11, inclusive, of this act”.
Amend sec. 7, page 6, line 38, by deleting “inclusive.” and inserting:
“inclusive [.] , and sections 2 to 11, inclusive, of this act.”.
Amend sec. 8, page 7, line 6, by deleting “2” and inserting “5”.
Amend sec. 8, page 7, line 10, by deleting “inclusive.” and inserting:
“inclusive [.] , and sections 2 to 11, inclusive, of this act.”.
Amend sec. 9, page 7, line 23, by deleting:
“2 of section 2” and inserting:
“1 of section 6”.
Amend sec. 9, page 7, line 24, by deleting:
“2 of section 2” and inserting:
“1 of section 6”.
Amend sec. 10, page 9, line 16, after “inclusive,” by inserting:
“and sections 2 to 11, inclusive, of this act”.
Amend sec. 10, page 9, line 17, by deleting “2” and inserting “5”.
Amend sec. 10, page 9, line 24, by deleting “2” and inserting “5”.
Amend sec. 10, page 9, line 27, after “inclusive,” by inserting:
“and sections 2 to 11, inclusive, of this act”.
Amend sec. 10, page 9, by deleting line 36 and inserting:
“40.695, inclusive, and sections 2 to 11, inclusive, of this act or giving notice pursuant to section 5 of this act, the”.
Amend sec. 11, page 9, line 41, by deleting “2” and inserting “5”.
Amend sec. 11, page 9, line 45, by deleting “2” and inserting “5”.
Amend sec. 12, page 10, line 18, after “inclusive,” by inserting:
“and sections 2 to 11, inclusive, of this act”.
Amend sec. 12, page 10, line 20, by deleting “2” and inserting “5”.
Amend sec. 12, page 10, by deleting lines 23 through 25 and inserting:
“2. Tolling under this section applies [:
(a) Only to a claim that is not a complex matter.
(b) To] to a third party regardless of whether the party is required to appear”.
Amend the bill as a whole by renumbering sec. 13 as sec. 26 and adding new sections designated sections 20 through 25, inclusive, following sec. 12, to read as follows:
“Sec. 20. Chapter 113 of NRS is hereby amended by adding thereto a new section to read as follows:
1. Each contractor who develops, constructs or landscapes a new residence shall, within 30 days after the close of escrow of the initial purchase of the residence, provide in writing to the initial purchaser of the residence:
(a) The name, license number, business address and telephone number of each subcontractor who performed any work related to the development, construction or landscaping of the residence; and
(b) A brief description so the work performed by each subcontractor identified pursuant to paragraph (a).
2. As used in this section, “subcontractor” has the meaning ascribed to it in section 3 of this act.
Sec. 21. Chapter 116 of NRS is hereby amended by adding thereto a new section to read as follows:
1. A person shall not provide or offer to provide anything of monetary value to a property manager of an association or to a member or officer of an executive board to induce the property manager, member or officer to encourage or discourage the association to file a claim for damages arising from a constructional defect.
2. A property manager shall not accept anything of value given to him in exchange for encouraging or discouraging the association that he manages to file a claim for damages arising from a constructional defect.
3. A member or officer of an executive board shall not accept anything of value given to him in exchange for encouraging or discouraging the association of which he is a member or officer of the executive board to file a claim for damages arising from a constructional defect.
4. If a property manager violates the provisions of this section:
(a) The real estate division of the department of business and industry shall suspend or revoke his permit to engage in property management issued pursuant to chapter 645 of NRS, if he has been issued such a permit; and
(b) The real estate commission shall suspend or revoke his certificate issued pursuant to NRS 116.31139, if he has been issued such a certificate.
5. If a member or officer of an executive board violates the provisions of this section, the executive board shall remove the officer or member from the board.
6. Any person who willfully violates the provisions of this section is guilty of a misdemeanor. 7. As used in this section, “constructional defect” has the meaning ascribed to it in NRS 40.615.
Sec. 22. NRS 116.1203 is hereby amended to read as follows:
116.1203 1. Except as otherwise provided in subsection 2, if a planned community contains no more than 12 units and is not subject to any developmental rights, it is subject only to NRS 116.1105, 116.1106 and 116.1107 unless the declaration provides that this entire chapter is applicable.
2. Except for NRS 116.3104, 116.31043, 116.31046 and 116.31138, [NRS] 116.3101 to 116.3119, and section 21 of this act inclusive, and 116.110305 to 116.110393, inclusive, to the extent necessary in construing any of those sections, apply to a residential planned community containing more than six units.
Sec. 23. NRS 116.31139 is hereby amended to read as follows:
116.31139 1. An association may employ a person engaged in property management for the common-interest community.
2. Except as otherwise provided in this section, a person engaged in property management for a common-interest community must:
(a) Hold a permit to engage in property management that is issued pursuant to the provisions of chapter 645 of NRS; or
(b) Hold a certificate issued by the real estate commission pursuant to subsection 3.
3. The real estate commission shall provide by regulation for the issuance of certificates for the management of common-interest communities to persons who are not otherwise authorized to engage in property management pursuant to the provisions of chapter 645 of NRS. The regulations:
(a) Must establish the qualifications for the issuance of such a certificate, including the education and experience required to obtain such a certificate;
(b) May require applicants to pass an examination in order to obtain a certificate;
(c) Must establish standards of practice for persons engaged in property management for a common-interest community;
(d) Must establish the grounds for initiating disciplinary action against a person to whom a certificate has been issued, including, without limitation, the grounds for placing conditions, limitations or restrictions on a certificate and for the suspension or revocation of a certificate; and
(e) Must establish rules of practice and procedure for conducting disciplinary hearings.
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The real estate division of the department of business and
industry may investigate the property managers to whom certificates have been
issued to ensure their compliance with section 21 of this act and the standards of
practice adopted pursuant to this subsection and collect a fee for the issuance
of a certificate by the commission in an amount not to exceed the administrative
costs of issuing the certificate.
4. The provisions of subsection 2 do not apply to:
(a) A person who is engaged in property management for a common-interest community on October 1, 1999, and is granted an exemption from the requirements of subsection 2 by the administrator upon demonstration that he is qualified and competent to engage in property management for a common-interest community.
(b) A financial institution.
(c) An attorney licensed to practice in this state.
(d) A trustee.
(e) An employee of a corporation who manages only the property of the corporation.
(f) A declarant.
(g) A receiver.
5. As used in this section, “property management” means the physical, administrative or financial maintenance and management of real property, or the supervision of those activities for a fee, commission or other compensation or valuable consideration.
Sec. 24. NRS 116.3115 is hereby amended to read as follows:
116.3115 1. Until the association makes an assessment for common expenses, the declarant shall pay all common expenses. After an assessment has been made by the association, assessments must be made at least annually, based on a budget adopted at least annually by the association in accordance with the requirements set forth in NRS 116.31151. Except for an association for a time-share project governed by the provisions of chapter 119A of NRS, and unless the declaration imposes more stringent standards, the budget must include a budget for the daily operation of the association and the money for the reserve required by paragraph (b) of subsection 2.
2. Except for assessments under subsections 4 to 7, inclusive:
(a) All common expenses, including a reserve, must be assessed against all the units in accordance with the allocations set forth in the declaration pursuant to subsections 1 and 2 of NRS 116.2107.
(b) The association shall establish an adequate reserve, funded on a reasonable basis, for the repair, replacement and restoration of the major components of the common elements. The reserve may be used only for those purposes, including, without limitation, repairing, replacing and restoring roofs, roads and sidewalks, and must not be used for daily maintenance.
3. Any past due assessment for common expenses or installment thereof bears interest at the rate established by the association not exceeding 18 percent per year.
4. To the extent required by the declaration:
(a) Any common expense associated with the maintenance, repair, restoration or replacement of a limited common element must be assessed against the units to which that limited common element is assigned, equally, or in any other proportion the declaration provides;
(b) Any common expense or portion thereof benefiting fewer than all of the units must be assessed exclusively against the units benefited; and
(c) The costs of insurance must be assessed in proportion to risk and the costs of utilities must be assessed in proportion to usage.
5. Assessments to pay a judgment against the association may be made only against the units in the common-interest community at the time the judgment was entered, in proportion to their liabilities for common expenses.
6. If any common expense is caused by the misconduct of any unit’s owner, the association may assess that expense exclusively against his unit.
7. The association of a common-interest community created before January 1, 1992, is not required to make an assessment against a vacant lot located within the community that is owned by the declarant.
8. If liabilities for common expenses are reallocated, assessments for common expenses and any installment thereof not yet due must be recalculated in accordance with the reallocated liabilities.
9. The association shall provide written notice to the owner of each unit of a meeting at which an assessment for a capital improvement or the commencement of a civil action is to be considered or action is to be taken on such an assessment at least 21 calendar days before the meeting. Except as otherwise provided in this subsection, the association may commence a civil action only upon a vote or written agreement of the owners of units to which at least a majority of the votes of the members of the association are allocated. The provisions of this subsection do not apply to a civil action that is commenced:
(a) By an association for a time-share project governed by the provisions of chapter 119A of NRS;
(b) To enforce the payment of an assessment;
(c) To enforce the declaration, bylaws or rules of the association;
(d) To proceed with a counterclaim; or
(e) To protect the [health, safety and welfare of the members of the association.] action against the running of the statute of limitations or repose. If a civil action is commenced pursuant to this paragraph without the required vote or agreement, the action must be ratified within 90 days after the commencement of the action by a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated. If the association, after making a good faith effort, cannot obtain the required vote or agreement to commence or ratify such a civil action, the association may thereafter seek to dismiss the action without prejudice for that reason only if a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated was obtained at the time the approval to commence or ratify the action was sought.
10. At least 10 days before an association commences or seeks to ratify the commencement of a civil action, the association shall provide a written statement to all units’ owners that includes:
(a) A reasonable estimate of the costs of the civil action, including reasonable attorney’s fees;
(b) An explanation of the potential benefits of the civil action and the potential adverse consequences if the association does not commence the action or if the outcome of the action is not favorable to the association; and
(c) All disclosures that are required to be made upon the sale of the property.
11. No person other than a unit’s owner may request the dismissal of a civil action commenced by the association on the ground that the association failed to comply with any provision of this section.
Sec. 25. NRS 119A.165 is hereby amended to read as follows:
119A.165 1. If a matter governed by this chapter is also governed by chapter 116 of NRS, compliance with the provisions of chapter 116 of NRS governing the matter which are in addition to or different from the provisions in this chapter governing the same matter is not required. In the event of a conflict between provisions of this chapter and chapter 116 of NRS, the provisions of this chapter prevail.
2. Without limiting the generality of subsection 1, the provisions of NRS 116.11145, 116.12065, 116.3103, 116.31031, 116.31034, 116.3106, 116.31065, 116.3108 to 116.311, inclusive, 116.31139, 116.31145 to 116.31158, inclusive, 116.31162, 116.31175, 116.31177, 116.41095 and 116.4117 and section 21 of this act do not apply to a time share or a time-share project.”.
Amend sec. 13, page 10, line 29, by deleting:
“2, 3 and 4” and inserting:
“2 to 11, inclusive,”.
Amend the title of the bill, fourth line, after “professional;” by inserting:
“imposing certain restrictions to prevent property managers from being encouraged to file a claim for a constructional defect; requiring a contractor to provide certain information to the initial purchaser of a residence;”
Amend the summary of the bill to read as follows: