S.B. 185
Senate Bill No. 185–Committee on Judiciary
February 15, 2001
____________
Referred to Committee on Judiciary
SUMMARY—Makes various changes concerning construction, constructional defects and common-interest communities. (BDR 3‑94)
FISCAL NOTE: Effect on Local Government: Yes.
~
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; making various changes concerning construction, constructional defects and common-interest communities; providing a penalty; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
1-1 Section 1. Chapter 40 of NRS is hereby amended by adding thereto
1-2 the provisions set forth as sections 2 to 11, inclusive, of this act.
1-3 Sec. 2. “Design professional” means a person who has a
1-4 professional license or certificate that was issued pursuant to chapter
1-5 623, 623A or 625 of NRS.
1-6 Sec. 3. “Subcontractor” means a contractor who performs work on
1-7 behalf of another contractor in the construction of a residence or
1-8 appurtenance.
1-9 Sec. 4. “Supplier” means a person who provides materials,
1-10 equipment or other supplies for the construction of a residence or
1-11 appurtenance.
1-12 Sec. 5. A contractor who performs any work to repair a
1-13 constructional defect pursuant to NRS 40.600 to 40.695, inclusive, and
1-14 sections 2 to 11, inclusive, of this act other than pursuant to NRS 40.670
1-15 may charge a subcontractor who the contractor believes caused the
1-16 defect for such work only if before performing the work the contractor:
1-17 1. Gives written notice describing each defect in reasonable detail to
1-18 the subcontractor by certified mail, return receipt requested, at the
1-19 subcontractor’s last address listed in the records of the state contractors’
1-20 board, or at the subcontractor’s last known address if his address is not
1-21 listed in the records of the state contractors’ board; and
1-22 2. Provides the subcontractor with a reasonable amount of time after
1-23 mailing the written notice pursuant to subsection 1 to repair each defect
2-1 or to make arrangements satisfactory to the claimant to have such
2-2 repairs made, or, if the constructional defect is not part of a complex
2-3 matter, waits for the time required pursuant to NRS 40.672, if applicable.
2-4 Sec. 6. 1. A contractor, subcontractor, supplier or design
2-5 professional who performs any work to repair a constructional defect
2-6 pursuant to NRS 40.600 to 40.695, inclusive, and sections 2 to 11,
2-7 inclusive, of this act shall warrant such work to be free from defects in
2-8 materials and workmanship for at least 1 year from the date on which the
2-9 work was completed.
2-10 2. A written or verbal agreement to perform work to repair a
2-11 constructional defect pursuant to NRS 40.600 to 40.695, inclusive, and
2-12 sections 2 to 11, inclusive, of this act that is entered into on or after
2-13 October 1, 2001, has the legal effect of including the warranty required
2-14 by subsection 1, and any provision of such an agreement or statement
2-15 made in relation to such an agreement that conflicts with the provisions
2-16 of this section is void.
2-17 Sec. 7. A claimant who enters into an agreement to settle a claim
2-18 governed by NRS 40.600 to 40.695, inclusive, and sections 2 to 11,
2-19 inclusive, of this act or who obtains a judgment in an action involving
2-20 such a claim shall file in the office of the county recorder of the county
2-21 where the real property which is the subject of the claim is located a
2-22 notice that provides a complete legal description of the real property
2-23 involved in the claim and describes the general nature of the settlement
2-24 or judgment.
2-25 Sec. 8. Within 60 days after a claimant commences an action
2-26 against a contractor for damages arising from a constructional defect
2-27 other than a defect set forth in NRS 40.670 or 40.672, the contractor who
2-28 was sent a written notice pursuant to subsection 1 of NRS 40.645 or
2-29 subsection 1 of NRS 40.682 shall provide a copy of such notice to each
2-30 subcontractor, supplier and design professional who the contractor
2-31 believes caused the defect.
2-32 Sec. 9. A person rendering an expert opinion or professional
2-33 opinion in a mediation required pursuant to NRS 40.680 must:
2-34 1. Have a license issued pursuant to chapter 624 of NRS in the
2-35 appropriate classification established by the provisions of NRS 624.215,
2-36 624.218 and 624.220 for the opinion that he is rendering; or
2-37 2. Have an appropriate occupational or professional license issued
2-38 by a board, commission or agency of the State of Nevada for the opinion
2-39 that he is rendering.
2-40 Sec. 10. 1. An attorney representing a person in a mediation
2-41 required pursuant to NRS 40.680 shall not employ an expert witness with
2-42 whom the attorney, a person employed by the same firm or company as
2-43 the attorney, a relative of the attorney or a relative of a person employed
2-44 by the same firm or company as the attorney has a fiduciary relationship.
2-45 2. An attorney representing a person in a mediation required
2-46 pursuant to NRS 40.680 shall not employ a consulting firm in which the
2-47 attorney, a person employed by the same firm or company as the
2-48 attorney, a relative of the attorney or a relative of a person employed by
2-49 the same firm or company as the attorney has a financial interest.
3-1 3. As used in this section, “relative” means a spouse or any other
3-2 person who is related within the second degree by blood or marriage.
3-3 Sec. 11. 1. Except as otherwise provided in this section, if the
3-4 provisions of a policy of insurance impose a duty upon an insurer to
3-5 defend an action governed by NRS 40.600 to 40.695, inclusive, and
3-6 sections 2 to 11, inclusive, of this act and a conflict of interest exists
3-7 which creates a duty on the insurer to provide independent counsel to the
3-8 insured, the insurer shall inform the insured that a possible conflict of
3-9 interest may arise or exists and that the insured is required to select
3-10 independent counsel to represent the insured. A person who is selected as
3-11 independent counsel pursuant to this section shall promptly inform the
3-12 insurer of such selection. A contract of insurance may specify the
3-13 manner of selecting independent counsel pursuant to this section.
3-14 2. An insured is not required to select independent counsel pursuant
3-15 to subsection 1 if, at the time that the insured is informed that a possible
3-16 conflict of interest may arise or exists, the insured expressly waives in
3-17 writing the right to independent counsel. The right to independent
3-18 counsel may not be waived in the terms of a policy of insurance. The
3-19 insured may waive the right to independent counsel by signing a
3-20 statement in substantially the following form:
3-21 I have been advised and informed of my right to select
3-22 independent counsel to represent me in this lawsuit. I have
3-23 considered this matter fully, and freely waive my right to select
3-24 independent counsel at this time. I authorize my insurer to select a
3-25 defense attorney to represent me in this lawsuit.
3-26 3. The insurer may require the independent counsel selected by the
3-27 insured pursuant to this section to possess certain minimum
3-28 qualifications, including, without limitation, having:
3-29 (a) At least 5 years of practice in civil litigation, including, without
3-30 limitation, substantial experience in defending the issue involved in the
3-31 action; and
3-32 (b) Coverage for errors and omissions.
3-33 4. If an insured selects an independent counsel pursuant to this
3-34 section, any other legal counsel provided by the insurer and any other
3-35 independent counsel selected by the insured must be allowed to
3-36 participate in all aspects of the action. Each counsel participating in the
3-37 action shall cooperate fully in the exchange of information in a manner
3-38 that is consistent with his ethical and legal obligation to the insured.
3-39 5. The insurer shall pay all fees charged by an independent counsel
3-40 selected by the insured pursuant to this section if such fees are charged
3-41 at the rate that is customarily paid by an insurer to an attorney retained
3-42 by the insurer in the ordinary course of business in the defense of a
3-43 similar action in the community where the action arose or is being
3-44 defended, including, without limitation, all fees and costs reasonably
3-45 necessary for the defense of the insured. A dispute concerning attorney’s
3-46 fees that are owed pursuant to this section must be resolved by final and
4-1 binding arbitration by a neutral arbitrator selected by the parties to the
4-2 dispute.
4-3 6. After an insured has selected an independent counsel pursuant to
4-4 this section, the insured and the independent counsel shall:
4-5 (a) Disclose to the insurer all information concerning the action,
4-6 except information concerning disputes in coverage that is privileged;
4-7 and
4-8 (b) Inform and consult with the insurer on all matters concerning the
4-9 action, except matters concerning disputes in coverage that are
4-10 privileged.
4-11 7. A claim of privilege asserted pursuant to subsection 6 is subject to
4-12 an in camera review by a court with jurisdiction over the claim.
4-13 8. The disclosure of information to an insurer pursuant to subsection
4-14 6 does not constitute a waiver of a privilege concerning the information
4-15 as to any other party.
4-16 9. The provisions of this section do not relieve an insured of his duty
4-17 to cooperate with his insurer under the terms of the contract of
4-18 insurance.
4-19 10. For the purposes of this section:
4-20 (a) A conflict of interest does not exist:
4-21 (1) As to allegations or facts in an action for which the insurer
4-22 denies coverage; and
4-23 (2) Solely because an action is brought against an insured for an
4-24 amount in excess of the limits in the policy of insurance; and
4-25 (b) A conflict of interest exists if an insurer provides a defense to an
4-26 action pursuant to a reservation of rights to deny coverage.
4-27 Sec. 12. NRS 40.600 is hereby amended to read as follows:
4-28 40.600 As used in NRS 40.600 to 40.695, inclusive, and sections 2 to
4-29 11, inclusive, of this act, unless the context otherwise requires, the words
4-30 and terms defined in NRS 40.605 to 40.630, inclusive, and sections 2, 3
4-31 and 4 of this act have the meanings ascribed to them in those sections.
4-32 Sec. 13. NRS 40.645 is hereby amended to read as follows:
4-33 40.645 Except as otherwise provided in this section and NRS 40.670:
4-34 1. For a claim that is not a complex matter, at least 60 days before a
4-35 claimant commences anaction against a contractor for damages arising
4-36 from a constructional defect, the claimant must give written notice by
4-37 certified mail, return receipt requested, to the contractor, at the contractor’s
4-38 last address listed in the records of the state contractors’ board, or at the
4-39 contractor’s last known address[,] if his address is not listed in the
4-40 records of the state contractors’ board, specifying in reasonable detail the
4-41 defects or any damages or injuries to each residence or appurtenance that is
4-42 the subject of the claim. The notice must describe in reasonable detail the
4-43 cause of the defects if the cause is known, the nature and extent that is
4-44 known of the damage or injury resulting from the defects and the location
4-45 of each defect within each residence or appurtenance to the extent known.
4-46 2. An expert opinion concerning the cause of the defects and the nature
4-47 and extent of the damage or injury resulting from the defects based on a
4-48 representative sample of the components of the residences and
5-1 appurtenances involved in the action satisfies the requirements of [this
5-2 section.] subsection 1.
5-3 3. During the 45‑day period after the contractor receives the notice[,]
5-4 pursuant to subsection 1, on his written request, the contractor is entitled
5-5 to inspect the property that is the subject of the claim to determine the
5-6 nature and cause of the defect, damage or injury and the nature and extent
5-7 of repairs necessary to remedy the defect. The contractor shall, before
5-8 making the inspection, provide reasonable notice of the inspection and
5-9 shall make the inspection at a reasonable time.The contractor may take
5-10 reasonable steps to establish the existence of the defect.
5-11 [2.] 4. If a residence or appurtenance that is the subject of the claim is
5-12 covered by a homeowner’swarranty that is purchased by or on behalf of a
5-13 claimant pursuant to NRS 690B.100 to 690B.180, inclusive, a claimant
5-14 shall diligently pursue a claim under the contract.
5-15 [3.] 5. Within 60 days after the contractor receives the notice[,]
5-16 pursuant to subsection 1, the contractor shall [make] provide a written
5-17 response to the claimant. The response:
5-18 (a) Must be served to the claimant by certified mail, return receipt
5-19 requested, at the claimant’s last known address ; [.]
5-20 (b) Must respond to each constructional defect set forth in the
5-21 claimant’s notice, and describe in reasonable detail the cause of the defect,
5-22 if known, the nature and extent of the damage or injury resulting from the
5-23 defect, and, unless the response is limited to a proposal for monetary
5-24 compensation, the method, adequacy and estimated cost of any proposed
5-25 repair[.] ; and
5-26 (c) May include:
5-27 (1) A proposal for monetary compensation, which may include a
5-28 contribution from a subcontractor ; [.]
5-29 (2) If the contractor or his subcontractor is licensed to make the
5-30 repairs, an agreement by the contractor or subcontractor to make the repairs
5-31 [.] ; or
5-32 (3) An agreement by the contractor to cause the repairs to be made, at
5-33 the contractor’s expense, by another contractor who is licensed to make the
5-34 repairs, bonded and insured.
5-35 [The] Any repairs made pursuant to this subsection must be made within
5-36 45 days after the contractor receives written notice of acceptance of the
5-37 response, unless completion is delayed by the claimant or by other events
5-38 beyond the control of the contractor, or timely completion of the repairs is
5-39 not reasonably possible. The claimant and the contractor may agree in
5-40 writing to extend the periods prescribed by this section.
5-41 [4.] 6. Not later than 15 days before the mediation required pursuant
5-42 to NRS 40.680 and upon providing 15 days’ notice, each party shall
5-43 provide the other party, or shall make a reasonable effort to assist the other
5-44 party to obtain, all relevant reports, photos, correspondence, plans,
5-45 specifications, warranties, contracts, subcontracts, work orders for repair,
5-46 videotapes, technical reports, soil and other engineering reports and other
5-47 documents or materials relating to the claim that are not privileged.
6-1 [5.] 7. If the claimant is a representative of a homeowner’s
6-2 association, the association shall submit any response made by the
6-3 contractor to each member of the association.
6-4 [6. As used in this section, “subcontractor” means a contractor who
6-5 performs work on behalf of another contractor in the construction of a
6-6 residence or appurtenance.]
6-7 Sec. 14. NRS 40.650 is hereby amended to read as follows:
6-8 40.650 1. If a claimant unreasonably rejects a reasonable written
6-9 offer of settlement made as part of a response made pursuant to NRS
6-10 40.645 or 40.682 or does not permit the contractor or independent
6-11 contractor a reasonable opportunity to repair the defect pursuant to an
6-12 accepted offer of settlement and thereafter commences an action governed
6-13 by NRS 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this
6-14 act, the court in which the action is commenced may:
6-15 (a) Deny the claimant’s attorney’s fees and costs; and
6-16 (b) Award attorney’s fees and costs to the contractor.
6-17 2. Any sums paid under a homeowner’s warranty, other than sums
6-18 paid in satisfaction of claims that are collateral to any coverage issued to or
6-19 by the contractor, must be deducted from any recovery.
6-20 [2.] 3. If a contractor fails to:
6-21 (a) Make an offer of settlement;
6-22 (b) Make a good faith response to the claim asserting no liability;
6-23 (c) Complete,in a good and workmanlike manner, the repairs specified
6-24 in an accepted offer;
6-25 (d) Agree to a mediator or accept the appointment of a mediator
6-26 pursuant to NRS 40.680 ; [or subsection 4 of NRS 40.682;] or
6-27 (e) Participate in mediation,
6-28 the limitations on damages and defenses to liability provided in NRS
6-29 40.600 to 40.695, inclusive, and sections 2 to 11, inclusive, of this act do
6-30 not apply and the claimant may commence an action without satisfying any
6-31 other requirement [of] set forth in NRS 40.600 to 40.695, inclusive[.] ,
6-32 and sections 2 to 11, inclusive, of this act.
6-33 [3.] 4. If coverage under a homeowner’s warranty is denied by an
6-34 insurer in bad faith, the homeowner and the contractor have a right of
6-35 action for the sums that would have been paid if coverage had been
6-36 provided, plus reasonable attorney’s fees and costs.
6-37 Sec. 15. NRS 40.672 is hereby amended to read as follows:
6-38 40.672 Except as otherwise provided in NRS 40.670[, if] :
6-39 1. If a contractor receives written notice of a constructional defect that
6-40 is not part of a complex matter not more than 1 year after the close of
6-41 escrow of the initial purchase of the residence, the contractor shall[make
6-42 the repairs within] :
6-43 (a) Immediately give written notice by certified mail, return receipt
6-44 requested, to any subcontractor who the contractor believes was
6-45 responsible for the constructional defect, at the subcontractor’s last
6-46 address listed in the records of the state contractors’ board, or at the
6-47 subcontractor’s last known address if his address is not listed in the
6-48 records of the state contractors’ board, specifying in reasonable detail the
6-49 defect; and
7-1 (b) Within 45 days after the contractor receives the written notice and
7-2 after giving a subcontractor notice and an opportunity to make the
7-3 repairs or make arrangements to have the repairs made, either make the
7-4 repairs or make arrangements satisfactory to the claimant to have the
7-5 repairs made if a subcontractor has not made the repairs or made
7-6 arrangements to have the repairs made pursuant to subsection 2 unless
7-7 completion or making such arrangements is delayed by the claimant or by
7-8 other events beyond the control of the contractor, or timely completion of
7-9 repairs is not reasonably possible. The contractor and claimant may agree
7-10 in writing to extend the period prescribed by this [section.] paragraph.
7-11 2. Within 21 days after a subcontractor receives notice pursuant to
7-12 subsection 1, the subcontractor shall either make the repairs or make
7-13 arrangements satisfactory to the claimant to have the repairs made
7-14 unless completion or making such arrangements is delayed by the
7-15 claimant or by other events beyond the control of the subcontractor, or
7-16 timely completion of repairs is not reasonably possible.
7-17 3. If the contractor or a subcontractor fails to comply with this
7-18 section, he is immediately subject to discipline pursuant to NRS 624.300.
7-19 Sec. 16. NRS 40.680 is hereby amended to read as follows:
7-20 40.680 1. Except as otherwise provided in this chapter, before an
7-21 action based on a claim governed by NRS 40.600 to 40.695, inclusive, and
7-22 sections 2 to 11, inclusive, of this act may be commenced in court, the
7-23 matter must be submitted to mediation, unless mediation is waived in
7-24 writing by the contractor and the claimant.
7-25 2. The claimant and contractor must select a mediator by agreement. If
7-26 the claimant and contractor fail to agree upon a mediator within 45 days
7-27 after a mediator is first selected by the claimant, either party may petition
7-28 the American Arbitration Association, the Nevada Arbitration Association,
7-29 Nevada Dispute Resolution Services or any other mediation service
7-30 acceptable to the parties for the appointment of a mediator. A mediator so
7-31 appointed may discover only those documents or records which are
7-32 necessary to conduct the mediation. The mediator shall convene the
7-33 mediation within 60 days after the matter is submitted to him, unless the
7-34 parties agree to extend the time. [Except in a complex matter, the] The
7-35 claimant shall, before the mediation begins, deposit $50 with the mediation
7-36 service , and thecontractor shall deposit with the mediation service the
7-37 remaining amount estimated by the mediation service as necessary to pay
7-38 the fees and expenses of the mediator for the first session of mediation, and
7-39 the contractorshall deposit additional amounts demanded by the mediation
7-40 service as incurred for that purpose. [In a complex matter, each party shall
7-41 share equally in the deposits estimated by the mediation service.] If, as a
7-42 result of the mediation, the claimant is awarded more money than was set
7-43 forth in the offer of settlement made by the contractor, the contractor
7-44 shall, in addition to that amount, reimburse the claimant all the money
7-45 that the claimant deposited with the mediation service. Unless otherwise
7-46 agreed, the total fees for each day of mediation and the mediator must not
7-47 exceed $750 per day.
8-1 3. Ifthe parties do not reach an agreement concerning the matter
8-2 during mediation or if the contractor fails to pay the required fees and
8-3 appear, the claimant may commence his action in court and:
8-4 (a) The reasonable costs and fees of the mediation are recoverable by
8-5 the prevailing party as costs of the action.
8-6 (b) Either party may petition the court in which the action is
8-7 commenced for the appointment of a special master.
8-8 4. A special master appointed pursuant to subsection 3 may:
8-9 (a) Review all pleadings, papers or documents filed with the court
8-10 concerning the action.
8-11 (b) Coordinate the discovery of any books, records, papers or other
8-12 documents by the parties, including the disclosure of witnesses and the
8-13 taking of the deposition of any party.
8-14 (c) Order any inspections on the site of the property by a party and any
8-15 consultants or experts of a party.
8-16 (d) Order settlement conferences and attendance at those conferences by
8-17 any representative of the insurer of a party.
8-18 (e) Require any attorney representing a party to provide statements of
8-19 legal and factual issues concerning the action.
8-20 (f) Refer to the judge who appointed him or to the presiding judge of the
8-21 court in which the action is commenced any matter requiring assistance
8-22 from the court.
8-23 (g) In a complex matter, exercise any power set forth in Rule 53 of the
8-24 Nevada Rules of Civil Procedure.
8-25 (h) In a complex matter, subject to the provisions of this section, if the
8-26 parties fail to establish a schedule or determine a date as required
8-27 pursuant to subsection 3, 4 or 6 of NRS 40.682, establish the schedule or
8-28 determine the date.
8-29 5. The special master shall not, unless otherwise agreed by the parties,
8-30 personally conduct any settlement conferences or engage in any ex parte
8-31 meetings regarding the action.
8-32 [5.] 6. Upon application by a party to the court in which the action is
8-33 commenced, any decision or other action taken by a special master
8-34 appointed pursuant to this section may be appealed to the courtfor a
8-35 decision.
8-36 [6.] 7. A report issued by a mediator or special master that indicates
8-37 that either party has failed to appear before him or to mediate in good faith
8-38 is admissible in the action, but a statement or admission made by either
8-39 party in the course of mediation is not admissible.
8-40 Sec. 17. NRS 40.682 is hereby amended to read as follows:
8-41 40.682 Except as otherwise provided in this section and NRS 40.670:
8-42 1. [Notwithstanding the provisions of subsection 1 of NRS 40.680, a
8-43 claimant may commence an action in district court in a complex matter. If
8-44 the] If a claimant commences an action in district court in a complex
8-45 matter, he shall:
8-46 (a) File and serve the summons and complaint as required by law; and
8-47 (b) At the same time and in the same manner as the claimant serves the
8-48 summons and complaint upon the contractor, serve upon the contractor a
8-49 written notice specifying in reasonable detail, to the extent known, the
9-1 defects and any damages or injuries to each residence or appurtenance that
9-2 is the subject of the claim. The notice must describe in reasonable detail
9-3 each defect, the specific location of each defect, and the nature and extent
9-4 that is known of the damage or injury resulting from each defect. If an
9-5 expert opinion has been rendered concerning the existence or extent of the
9-6 defects, a written copy of the opinion must accompany the notice. An
9-7 expert opinion that specifies each defect to the extent known, the specific
9-8 location of each defect to the extent known, and the nature and extent that
9-9 is known of the damage or injury resulting from each defect, based on a
9-10 valid and reliable representative sample of the residences and
9-11 appurtenances involved in the action, satisfies the requirements of this
9-12 section.
9-13 2. The contractor shall file and serve an answer to the complaint as
9-14 required by law.
9-15 3. Not later than 30 days after the date of service of the answer to the
9-16 complaint, the contractor and claimant shall meet to establish a schedule
9-17 for:
9-18 (a) The exchange of or reasonable access for the other party to all
9-19 relevant reports, photos, correspondence, plans, specifications, warranties,
9-20 contracts, subcontracts, work orders for repair, videotapes, technical
9-21 reports, soil and other engineering reports and other documents or
9-22 materials relating to the claim that are not privileged;
9-23 (b) The inspection of the residence or appurtenance that is the subject of
9-24 the claim to evaluate the defects set forth in the notice served pursuant to
9-25 subsection 1; and
9-26 (c) The conduct of any tests that are reasonably necessary to determine
9-27 the nature and cause of a defect or any damage or injury, and the nature
9-28 and extent of repairs necessary to remedy a defect or any damage or injury.
9-29 The party conducting the test shall provide reasonable notice of the test to
9-30 all other parties and conduct the test at a reasonable time.
9-31 4. At the meeting held pursuant to subsection 3, the claimant and
9-32 contractor shall[:
9-33 (a) Establish] establish a schedule for the addition of any additional
9-34 parties to the complaint or to file any third-party complaint against an
9-35 additional party who may be responsible for all or a portion of the defects
9-36 set forth in the notice served pursuant to subsection 1[;
9-37 (b) Unless the claimant and contractor agree otherwise in writing, select
9-38 a mediator and proceed with mediation as provided in subsections 2 to 6,
9-39 inclusive, of NRS 40.680; and
9-40 (c) If the claimant and contractor agree, select a special master and
9-41 jointly petition the court for his appointment pursuant to subsection 7.] ,
9-42 including, without limitation, any subcontractor, supplier or design
9-43 professional. Not later than 60 days after the date of service of the
9-44 answer to the complaint, the claimant and contractor shall add any
9-45 additional parties to the complaint or file any third-party complaints
9-46 against any additional parties who may be responsible for all or a portion
9-47 of the constructional defects set forth in the notice served pursuant to
9-48 subsection 1.
10-1 5. Each party added to the complaint or against whom a third‑party
10-2 complaint is filed pursuant to subsection 4 shall file and serve an answer as
10-3 required by law.
10-4 6. If the claimant or contractor adds a party to the complaint or files a
10-5 third‑party complaint, then not later than 60 days after the date determined
10-6 pursuant to [paragraph (a) of] subsection 4, the contractor, claimant and
10-7 each party added to the complaint or against whom a third‑party complaint
10-8 is filed shall meet to establish a schedule for the activities set forth in
10-9 paragraphs (a), (b) and (c) of subsection3.
10-10 7. [If a special master has not been appointed, the contractor, claimant
10-11 or a party added to the complaint or against whom a third‑party complaint
10-12 is filed may petition the court for the appointment of a special master at
10-13 any time after the meeting held pursuant to subsection 3. The special
10-14 master may:
10-15 (a) Take any action set forth in subsection 4 of NRS 40.680;
10-16 (b) Exercise any power set forth in Rule 53 of the Nevada Rules of Civil
10-17 Procedure; and
10-18 (c) Subject to the provisions of NRS 40.680, if the parties fail to
10-19 establish a schedule or determine a date as required in subsection 3, 4 or 6,
10-20 establish the schedule or determine the date.
10-21 8.] Unless the mediation required pursuant to [paragraph (b) of
10-22 subsection 4] NRS 40.680 is completed , or the contractor and claimant
10-23 have [agreed] waived such mediation in writing , [not to mediate the claim
10-24 pursuant to paragraph (b) of subsection 4,] a party shall not propound
10-25 interrogatories or requests for admission, take a deposition or file a motion
10-26 that is dispositive of the action except:
10-27 (a) Upon agreement of the parties; or
10-28 (b) With the prior approval of the court or special master.
10-29 [9.] 8. If a residence or appurtenance that is the subject of the claim is
10-30 covered by a homeowner’s warranty that is purchased by or on behalf of a
10-31 claimant pursuant to NRS 690B.100 to 690B.180, inclusive, a claimant
10-32 shall diligently pursue a claim under the contract.
10-33 [10.] 9. Unless the parties agree otherwise, not less than 60 days
10-34 before the date of the mediation pursuant to [paragraph (b) of subsection 4]
10-35 NRS 40.680 is convened, the contractor shall [make] provide a written
10-36 response to the claimant that meets the requirements set forth in subsection
10-37 [3] 5 of NRS 40.645.
10-38 [11.] 10. If the claimant is a representative of a homeowner’s
10-39 association, the association shall submit any response made by the
10-40 contractor to each member of the association in writing not more than 30
10-41 days after the date the claimant receives the response.
10-42 [12.] 11. The claimant shall respond to the written response of the
10-43 contractor within 45 days after the response of the contractor is mailed to
10-44 the claimant.
10-45 Sec. 18. NRS 40.692 is hereby amended to read as follows:
10-46 40.692 If, after complying with the procedural requirements of NRS
10-47 40.645 and 40.680, or NRS 40.680 and 40.682, a claimant proceeds with
10-48 an action for damages arising from a constructional defect:
11-1 1. The claimant and each contractor and subcontractor who is named
11-2 in the original complaint when the action is commenced are not required,
11-3 while the action is pending, to comply with the requirements of NRS
11-4 40.645 or 40.680, or NRS 40.680 or 40.682, for any constructional defect
11-5 that the claimant includes in an amended complaint, if the constructional
11-6 defect:
11-7 (a) Is attributable, in whole or in part, to such a contractor[;] or
11-8 subcontractor;
11-9 (b) Is located on the same property described in the original complaint;
11-10 and
11-11 (c) Was not discovered before the action was commenced provided that
11-12 a good faith effort had been undertaken by the claimant.
11-13 2. The claimant is not required to give written notice of a defect
11-14 pursuant to subsection 1 of NRS 40.645 or subsection 1 of NRS 40.682 to
11-15 any person who is joined to or intervenes in the action as a party after it is
11-16 commenced. If such a person becomes a party to the action:
11-17 (a) For the purposes of subsection 1 of NRS 40.645 or subsection 1 of
11-18 NRS 40.682, the person shall be deemed to have been given notice of the
11-19 defect by the claimant on the date on which the person becomes a party to
11-20 the action; and
11-21 (b) The provisions of NRS 40.600 to 40.695, inclusive, and sections 2
11-22 to 11, inclusive, of this act apply to the person after that date.
11-23 Sec. 19. NRS 40.695 is hereby amended to read as follows:
11-24 40.695 1. Except as otherwise provided in subsection 2, statutes of
11-25 limitation or repose applicable to a claim based on a constructional defect
11-26 governed by NRS 40.600 to 40.695, inclusive, and sections 2 to 11,
11-27 inclusive, of this act are tolled from the time notice of the claim is given,
11-28 until 30 days after mediation is concluded or waived in writing pursuant to
11-29 NRS 40.680 . [or subsection 4 of NRS 40.682.]
11-30 2. Tolling under this section applies:
11-31 (a) Only to a claim that is not a complex matter.
11-32 (b) To a third party regardless of whether the party is required to appear
11-33 in the proceeding.
11-34 Sec. 20. Chapter 116 of NRS is hereby amended by adding thereto a
11-35 new section to read as follows:
11-36 1. A person shall not provide or offer to provide anything of value to
11-37 a property manager of an association or to a member or officer of an
11-38 executive board to induce the property manager, member or officer to
11-39 encourage the association to file a claim for damages arising from a
11-40 constructional defect.
11-41 2. A property manager shall not accept anything of value given to
11-42 him in exchange for encouraging the association that he manages to file
11-43 a claim for damages arising from a constructional defect.
11-44 3. A member or officer of an executive board shall not accept
11-45 anything of value given to him in exchange for encouraging the
11-46 association of which he is a member or officer of the executive board to
11-47 file a claim for damages arising from a constructional defect.
11-48 4. If a property manager violates the provisions of this section:
12-1 (a) The real estate division of the department of business and industry
12-2 shall suspend or revoke his permit to engage in property management
12-3 issued pursuant to chapter 645 of NRS, if he has been issued such a
12-4 permit; and
12-5 (b) The real estate commission shall suspend or revoke his certificate
12-6 issued pursuant to NRS 116.31139, if he has been issued such a
12-7 certificate.
12-8 5. If a member or officer of an executive board violates the
12-9 provisions of this section, the executive board shall remove the officer or
12-10 member from the board.
12-11 6. Any person who willfully violates the provisions of this section is
12-12 guilty of a misdemeanor.
12-13 7. As used in this section, “constructional defect” has the meaning
12-14 ascribed to it in NRS 40.615.
12-15 Sec. 21. NRS 116.1203 is hereby amended to read as follows:
12-16 116.1203 1. Except as otherwise provided in subsection 2, if a
12-17 planned community contains no more than 12 units and is not subject to
12-18 any developmental rights, it is subject only to NRS 116.1105, 116.1106
12-19 and 116.1107 unless the declaration provides that this entire chapter is
12-20 applicable.
12-21 2. Except for NRS 116.3104, 116.31043, 116.31046 and 116.31138,
12-22 [NRS] 116.3101 to 116.3119, inclusive, and section 20 of this act and
12-23 116.110305 to 116.110393, inclusive, to the extent necessary in construing
12-24 any of those sections, apply to a residential planned community containing
12-25 more than six units.
12-26 Sec. 22. NRS 116.311 is hereby amended to read as follows:
12-27 116.311 1. If only one of several owners of a unit is present at a
12-28 meeting of the association, that owner is entitled to cast all the votes
12-29 allocated to that unit. If more than one of the owners are present, the votes
12-30 allocated to that unit may be cast only in accordance with the agreement of
12-31 a majority in interest of the owners, unless the declaration expressly
12-32 provides otherwise. There is majority agreement if any one of the owners
12-33 cast the votes allocated to that unit without protest made promptly to the
12-34 person presiding over the meeting by any of the other owners of the unit.
12-35 2. Except as otherwise provided in this section, votes allocated to a
12-36 unit may be cast pursuant to a proxy executed by a unit’s owner. A unit’s
12-37 owner may give a proxy only to a member of his immediate family, a
12-38 tenant of the unit’s owner who resides in the common-interest community
12-39 or another unit’s owner who resides in the common-interest community. If
12-40 a unit is owned by more than one person, each owner of the unit may vote
12-41 or register protest to the casting of votes by the other owners of the unit
12-42 through an executed proxy. A unit’s owner may revoke a proxy given
12-43 pursuant to this section only by actual notice of revocation to the person
12-44 presiding over a meeting of the association. A proxy is void if:
12-45 (a) It is not dated or purports to be revocable without notice;
12-46 (b) It does not designate the votes that must be cast on behalf of the
12-47 unit’s owner who executed the proxy; or
12-48 (c) The holder of the proxy does not disclose at the beginning of the
12-49 meeting for which the proxy is executed the number of proxies pursuant to
13-1 which he will be casting votes and the voting instructions received for each
13-2 proxy.
13-3 A proxy terminates immediately after the conclusion of the meeting for
13-4 which it was executed. A vote may not be cast pursuant to a proxy for the
13-5 election of a member of the executive board of an association[.] or for the
13-6 ratification of an action pursuant to paragraph (e) of subsection 9 of
13-7 NRS 116.3115.
13-8 3. Only a vote cast in person, by secret ballot or by proxy, may be
13-9 counted.
13-10 4. If the declaration requires that votes on specified matters affecting
13-11 the common-interest community be cast by lessees rather than units’
13-12 owners of leased units:
13-13 (a) The provisions of subsections 1 and 2 apply to lessees as if they
13-14 were units’ owners;
13-15 (b) Units’ owners who have leased their units to other persons may not
13-16 cast votes on those specified matters; and
13-17 (c) Lessees are entitled to notice of meetings, access to records, and
13-18 other rights respecting those matters as if they were units’ owners.
13-19 Units’ owners must also be given notice, in the manner provided in NRS
13-20 116.3108, of all meetings at which lessees are entitled to vote.
13-21 5. No votes allocated to a unit owned by the association may be cast.
13-22 6. Votes cast for the election of a member of the executive board of an
13-23 association must be counted in public.
13-24 Sec. 23. NRS 116.31139 is hereby amended to read as follows:
13-25 116.31139 1. An association may employ a person engaged in
13-26 property management for the common-interest community.
13-27 2. Except as otherwise provided in this section, a person engaged in
13-28 property management for a common-interest community must:
13-29 (a) Hold a permit to engage in property management that is issued
13-30 pursuant to the provisions of chapter 645 of NRS; or
13-31 (b) Hold a certificate issued by the real estate commission pursuant to
13-32 subsection 3.
13-33 3. The real estate commission shall provide by regulation for the
13-34 issuance of certificates for the management of common-interest
13-35 communities to persons who are not otherwise authorized to engage in
13-36 property management pursuant to the provisions of chapter 645 of NRS.
13-37 The regulations:
13-38 (a) Must establish the qualifications for the issuance of such a
13-39 certificate, including the education and experience required to obtain such
13-40 a certificate;
13-41 (b) May require applicants to pass an examination in order to obtain a
13-42 certificate;
13-43 (c) Must establish standards of practice for persons engaged in property
13-44 management for a common-interest community;
13-45 (d) Must establish the grounds for initiating disciplinary action against a
13-46 person to whom a certificate has been issued, including, without limitation,
13-47 the grounds for placing conditions, limitations or restrictions on a
13-48 certificate and for the suspension or revocation of a certificate; and
14-1 (e) Must establish rules of practice and procedure for conducting
14-2 disciplinary hearings.
14-3 The real estate division of the department of business and industry may
14-4 investigate the property managers to whom certificates have been issued to
14-5 ensure their compliance with section 20 of this act and the standards of
14-6 practice adopted pursuant to this subsection and collect a fee for the
14-7 issuance of a certificate by the commission in an amount not to exceed the
14-8 administrative costs of issuing the certificate.
14-9 4. The provisions of subsection 2 do not apply to:
14-10 (a) A person who is engaged in property management for a common-
14-11 interest community on October 1, 1999, and is granted an exemption from
14-12 the requirements of subsection 2 by the administrator upon demonstration
14-13 that he is qualified and competent to engage in property management for a
14-14 common-interest community.
14-15 (b) A financial institution.
14-16 (c) An attorney licensed to practice in this state.
14-17 (d) A trustee.
14-18 (e) An employee of a corporation who manages only the property of the
14-19 corporation.
14-20 (f) A declarant.
14-21 (g) A receiver.
14-22 5. As used in this section, “property management” means the physical,
14-23 administrative or financial maintenance and management of real property,
14-24 or the supervision of those activities for a fee, commission or other
14-25 compensation or valuable consideration.
14-26 Sec. 24. NRS 116.3115 is hereby amended to read as follows:
14-27 116.3115 1. Until the association makes an assessment for common
14-28 expenses, the declarant shall pay all common expenses. After an
14-29 assessment has been made by the association, assessments must be made at
14-30 least annually, based on a budget adopted at least annually by the
14-31 association in accordance with the requirements set forth in NRS
14-32 116.31151. Except for an association for a time-share project governed by
14-33 the provisions of chapter 119A of NRS, and unless the declaration imposes
14-34 more stringent standards, the budget must include a budget for the daily
14-35 operation of the association and the money for the reserve required by
14-36 paragraph (b) of subsection 2.
14-37 2. Except for assessments under subsections 4 to 7, inclusive:
14-38 (a) All common expenses, including a reserve, must be assessed against
14-39 all the units in accordance with the allocations set forth in the declaration
14-40 pursuant to subsections 1 and 2 of NRS 116.2107.
14-41 (b) The association shall establish an adequate reserve, funded on a
14-42 reasonable basis, for the repair, replacement and restoration of the major
14-43 components of the common elements. The reserve may be used only for
14-44 those purposes, including, without limitation, repairing, replacing and
14-45 restoring roofs, roads and sidewalks, and must not be used for daily
14-46 maintenance.
14-47 3. Any past due assessment for common expenses or installment
14-48 thereof bears interest at the rate established by the association not
14-49 exceeding 18 percent per year.
15-1 4. To the extent required by the declaration:
15-2 (a) Any common expense associated with the maintenance, repair,
15-3 restoration or replacement of a limited common element must be assessed
15-4 against the units to which that limited common element is assigned,
15-5 equally, or in any other proportion the declaration provides;
15-6 (b) Any common expense or portion thereof benefiting fewer than all of
15-7 the units must be assessed exclusively against the units benefited; and
15-8 (c) The costs of insurance must be assessed in proportion to risk and the
15-9 costs of utilities must be assessed in proportion to usage.
15-10 5. Assessments to pay a judgment against the association may be made
15-11 only against the units in the common-interest community at the time the
15-12 judgment was entered, in proportion to their liabilities for common
15-13 expenses.
15-14 6. If any common expense is caused by the misconduct of any unit’s
15-15 owner, the association may assess that expense exclusively against his unit.
15-16 7. The association of a common-interest community created before
15-17 January 1, 1992, is not required to make an assessment against a vacant lot
15-18 located within the community that is owned by the declarant.
15-19 8. If liabilities for common expenses are reallocated, assessments for
15-20 common expenses and any installment thereof not yet due must be
15-21 recalculated in accordance with the reallocated liabilities.
15-22 9. The association shall provide written notice by certified mail, return
15-23 receipt requested, to the owner of each unit of a meeting at which an
15-24 assessment for a capital improvement or the commencement of a civil
15-25 action is to be considered or action is to be taken on such an assessment at
15-26 least 21 calendar days before the meeting. Except as otherwise provided in
15-27 this subsection, the association may commence a civil action only upon a
15-28 vote [or written agreement] of the owners of units to which at least a
15-29 majority of the votes of the members of the association are allocated[.] ,
15-30 taken at a scheduled meeting. The provisions of this subsection do not
15-31 apply to a civil action that is commenced:
15-32 (a) By an association for a time-share project governed by the
15-33 provisions of chapter 119A of NRS;
15-34 (b) To enforce the payment of an assessment;
15-35 (c) To enforce the declaration, bylaws or rules of the association;
15-36 (d) To proceed with a counterclaim; or
15-37 (e) To protect the health, safety and welfare of the members of the
15-38 association[.] from an imminent risk of loss of life or serious and
15-39 permanent damage to property. If a civil action is commenced pursuant to
15-40 this paragraph without the required vote or agreement, the action must be
15-41 ratified within [90] 30 days after the commencement of the action [by]
15-42 upon a vote [or written agreement] of the owners of the units to which at
15-43 least a majority of the votes of the members of the association are
15-44 allocated. If the [association, after making a good faith effort, cannot obtain
15-45 the required vote or agreement to commence or ratify such a civil action,]
15-46 action is not so ratified, the association [may thereafter seek] shall file a
15-47 special motion to dismiss the action and the court shall dismiss the action
15-48 without prejudice for [that reason only if a vote or written agreement of the
15-49 owners of the units to which at least a majority of votes of the members of
16-1 the association are allocated was obtained at the time the approval to
16-2 commence or ratify the action was sought.] failure to comply with this
16-3 paragraph.
16-4 10. At least 10 days before an association commences or seeks to
16-5 ratify the commencement of a civil action, the association shall provide a
16-6 written statement by certified mail, return receipt requested, to all units’
16-7 owners that includes:
16-8 (a) A reasonable estimate of the costs of the civil action, including ,
16-9 without limitation, reasonable attorney’s fees[;] and fees for experts and
16-10 other witnesses;
16-11 (b) An explanation that the costs and fees required to be paid in
16-12 connection with the civil action will be paid before the units’ owners
16-13 receive money as a result of the civil action, and an explanation that the
16-14 amount of money paid for such costs and fees may be greater than the
16-15 amount of money available to compensate the units’ owners;
16-16 (c) An explanation of the potential benefits of the civil action and the
16-17 potential adverse consequences if the association does not commence the
16-18 action or if the outcome of the action is not favorable to the association;
16-19 and
16-20 [(c)] (d) All disclosures that are required to be made upon the sale of
16-21 the property.
16-22 11. No person other than a unit’s owner may request the dismissal of a
16-23 civil action commenced by the association on the ground that the
16-24 association failed to comply with any provision of this section.
16-25 Sec. 25. NRS 119A.165 is hereby amended to read as follows:
16-26 119A.165 1. If a matter governed by this chapter is also governed by
16-27 chapter 116 of NRS, compliance with the provisions of chapter 116 of
16-28 NRS governing the matter which are in addition to or different from the
16-29 provisions in this chapter governing the same matter is not required. In the
16-30 event of a conflict between provisions of this chapter and chapter 116 of
16-31 NRS, the provisions of this chapter prevail.
16-32 2. Without limiting the generality of subsection 1, the provisions of
16-33 NRS 116.11145, 116.12065, 116.3103, 116.31031, 116.31034, 116.3106,
16-34 116.31065, 116.3108 to 116.311, inclusive, 116.31139, 116.31145 to
16-35 116.31158, inclusive, 116.31162, 116.31175, 116.31177, 116.41095 and
16-36 116.4117 and section 20 of this act do not apply to a time share or a time-
16-37 share project.
16-38 Sec. 26. NRS 247.180 is hereby amended to read as follows:
16-39 247.180 Except as otherwise provided in NRS 111.312, whenever an
16-40 instrument conveying, encumbering or mortgaging both real and personal
16-41 property or a notice filed pursuant to section 7 of this act is presented to
16-42 any county recorder for recording, the county recorder shall record the
16-43 instrument in a book kept by him for that purpose, which record must be
16-44 indexed in the real estate index as deeds and other conveyances are
16-45 required by law to be indexed, and for which he may receive the same fees
16-46 as are allowed by law for recording and indexing deeds and other
16-47 instruments, but only one fee for the recording of any instrument may be
16-48 collected.
17-1 Sec. 27. Chapter 624 of NRS is hereby amended by adding thereto a
17-2 new section to read as follows:
17-3 A contractor who develops, constructs or landscapes a new residence
17-4 shall, not later than 30 days after the close of escrow of the initial
17-5 purchase of the residence, provide in writing to the initial purchaser of
17-6 the residence the name, license number, business address and telephone
17-7 number of each subcontractor who performed any work related to such
17-8 development, construction or landscaping of the residence.
17-9 Sec. 28. NRS 624.3016 is hereby amended to read as follows:
17-10 624.3016 The following acts or omissions, among others, constitute
17-11 cause for disciplinary action under NRS 624.300:
17-12 1. Any fraudulent or deceitful act committed in the capacity of a
17-13 contractor.
17-14 2. A conviction of a violation of NRS 624.730 or a felony or a crime
17-15 involving moral turpitude.
17-16 3. Knowingly making a false statement in or relating to the recording
17-17 of a notice of lien pursuant to the provisions of NRS 108.226.
17-18 4. Failure to give a notice required by NRS 108.245 or 108.246.
17-19 5. Failure to comply with NRS 597.713, 597.716 or 597.719 or any
17-20 regulations of the board governing contracts for the construction of
17-21 residential pools and spas.
17-22 6. Failure to comply with NRS 624.600[.] or section 27 of this act.
17-23 7. Misrepresentation or the omission of a material fact, or the
17-24 commission of any other fraudulent or deceitful act, to obtain a license.
17-25 8. Failure to pay an assessment required pursuant to NRS 624.470.
17-26 Sec. 29. NRS 645.6052 is hereby amended to read as follows:
17-27 645.6052 1. A person who is licensed pursuant to this chapter as a
17-28 real estate broker, real estate broker‑salesman or real estate salesman may
17-29 apply to the real estate division for a permit to engage in property
17-30 management.
17-31 2. An applicant for a permit must:
17-32 (a) Furnish proof satisfactory to the division that he has successfully
17-33 completed at least 24 classroom hours of instruction in property
17-34 management; and
17-35 (b) Comply with all other requirements established by the commission
17-36 for the issuance of a permit.
17-37 3. A permit expires, and may be renewed, at the same time as the
17-38 license of the holder of the permit.
17-39 4. An applicant for the renewal of a permit must:
17-40 (a) Furnish proof satisfactory to the division that he has successfully
17-41 completed at least 3 of the hours of the continuing education required for
17-42 the renewal of his license pursuant to NRS 645.575 in an approved
17-43 educational course, seminar or conference concerning property
17-44 management; and
17-45 (b) Comply with all other requirements established by the commission
17-46 for the renewal of a permit.
17-47 5. The commission may adopt such regulations as it determines are
17-48 necessary to carry out the provisions of this section[.] and section 20 of
17-49 this act. The regulations may, without limitation:
18-1 (a) Establish additional requirements for the issuance or renewal of a
18-2 permit.
18-3 (b) Establish a fee for the issuance and renewal of a permit.
18-4 (c) Set forth standards of education for the approval of a course of
18-5 instruction to qualify a person for a permit pursuant to this section.
18-6 Sec. 30. The amendatory provisions of this act do not apply to a claim
18-7 initiated or an action commenced pursuant to NRS 40.600 to 40.695,
18-8 inclusive, and sections 2 to 11, inclusive, of this act, unless the claim was
18-9 initiated or the action was commenced on or after October 1, 2001.
18-10 Sec. 31. The amendatory provisions of section 20 of this act do not
18-11 apply to offenses committed before October 1, 2001.
18-12 H