requires two-thirds majority vote (§§ 11, 14)
S.B. 310
Senate Bill No. 310–Senator Schneider
March 9, 2001
____________
Referred to Committee on Commerce and Labor
SUMMARY—Creates commission to review constructional defect claims and revises various provisions governing actions resulting from constructional defects. (BDR 54‑448)
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; creating a commission to review constructional defect claims; requiring certain actions involving constructional defects to be presented to the commission for review before such an action or claim may be commenced; requiring the presence of a contractor or his representative at any inspection performed by an expert of the claimant; requiring the attorney for a claimant in a constructional defect matter to maintain and report a current accounting of attorney’s fees and costs; 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 624 of NRS is hereby amended by adding thereto
1-2 the provisions set forth as sections 2 to 20, inclusive, of this act.
1-3 Sec. 2. As used in sections 2 to 20, inclusive, of this act, unless the
1-4 context otherwise requires, the words and terms defined in sections 3, 4
1-5 and 5 of this act have the meanings ascribed to them in those sections.
1-6 Sec. 3. “Commission” means the constructional defect commission
1-7 created pursuant to section 6 of this act.
1-8 Sec. 4. “Construction record” means a document received or
1-9 produced by a contractor, or any person employed by him, that contains
1-10 information relating to the construction of a residence or appurtenance,
1-11 including, without limitation, any report, record, plan, permit, contract,
1-12 subcontract, invoice, work order or other documents.
1-13 Sec. 5. “Constructional defect” has the meaning ascribed to it in
1-14 NRS 40.615.
1-15 Sec. 6. 1. The board shall create a constructional defect
1-16 commission consisting of seven members appointed by the governor.
1-17 2. Each member who is appointed to the commission serves for a
1-18 term of 4 years. A member may be reappointed to the commission.
2-1 3. The governor shall appoint to the commission:
2-2 (a) Three members who are contractors recommended by the board,
2-3 each of whom:
2-4 (1) Holds a license issued pursuant to this chapter;
2-5 (2) Is actively engaged in the contracting business and has been so
2-6 engaged for not less than 5 years preceding the date of his appointment;
2-7 and
2-8 (3) Has been a resident of this state for at least 5 years immediately
2-9 preceding his appointment; and
2-10 (b) Four members who are representatives of the general public.
2-11 4. The governor shall appoint a chairman of the commission.
2-12 Sec. 7. 1. The members of the commission:
2-13 (a) Serve without compensation; and
2-14 (b) May, upon written request to the board, receive the per diem
2-15 allowance and travel expenses provided for state officers and employees
2-16 generally while engaged in the business of the commission.
2-17 2. The governor may remove a member of the commission before the
2-18 expiration of his term for misconduct in office, incompetence or neglect
2-19 of duty.
2-20 3. If a vacancy occurs in the membership of the commission, the
2-21 governor shall appoint a person to fill the vacancy for the remainder of
2-22 the unexpired term. A vacancy on the commission must be filled in the
2-23 same manner as the original appointment.
2-24 4. Four members, at least one of whom must be a contractor,
2-25 constitute a quorum.
2-26 5. Notwithstanding any other provision of law, a member of the
2-27 commission:
2-28 (a) Is not disqualified from public employment or holding a public
2-29 office because of his membership on the commission; and
2-30 (b) Does not forfeit his public office or public employment because of
2-31 his membership on the commission.
2-32 Sec. 8. 1. The board shall arrange for courses of instruction in the
2-33 rules of procedure and substantive law appropriate for members of the
2-34 commission.
2-35 2. Each person appointed to serve on the commission shall attend the
2-36 instruction provided pursuant to subsection 1 before serving on the
2-37 commission.
2-38 Sec. 9. 1. The provisions of sections 2 to 20, inclusive, of this act
2-39 do not apply to a claim that is a complex matter.
2-40 2. The provisions of chapter 241 of NRS do not apply to any meeting
2-41 or hearing of the commission held to carry out the provisions of sections
2-42 2 to 20, inclusive, of this act or to the deliberations of the commission on
2-43 any information or evidence pursuant to sections 2 to 20, inclusive, of
2-44 this act.
2-45 Sec. 10. The commission and its members acting pursuant to
2-46 sections 2 to 20, inclusive, of this act are immune from any civil liability
2-47 for any decision or action taken in good faith and without malicious
2-48 intent in response to a complaint filed with the commission.
3-1 Sec. 11. 1. The board:
3-2 (a) Shall develop and maintain a list of alternate members who satisfy
3-3 the requirements of sections 6 and 8 of this act;
3-4 (b) Shall schedule the hearings for the commission;
3-5 (c) Shall obtain, before or after the filing of a complaint with the
3-6 commission, such construction records and other materials as may be
3-7 required by the parties or the commission in connection with the claim of
3-8 a constructional defect;
3-9 (d) Shall charge and collect a reasonable fee for copying materials
3-10 produced under subpoena;
3-11 (e) For good cause shown, may authorize a continuance for the
3-12 proceedings involving the commission;
3-13 (f) To the extent necessary for the commission to carry out its duties,
3-14 shall provide the commission with administrative support, equipment and
3-15 office space; and
3-16 (g) May adopt such rules of practice and procedure as are necessary
3-17 to carry out the provisions of sections 2 to 20, inclusive, of this act.
3-18 2. The attorney general shall serve as legal counsel for the
3-19 commission.
3-20 Sec. 12. 1. A member of the commission may disqualify himself
3-21 from acting in any matter upon the ground of actual or implied bias.
3-22 2. A party to a matter who seeks to disqualify a member of the
3-23 commission from acting on a complaint of a constructional defect filed
3-24 pursuant to section 14 of this act shall file a request for disqualification
3-25 in writing with the board not later than 15 days after the expiration of the
3-26 time in which to answer the complaint, specifying the facts upon which
3-27 such disqualification is sought. A party may make a request for the
3-28 disqualification of any member of the commission for cause on any of
3-29 the grounds provided pursuant to NRS 16.050 for the challenge of jurors.
3-30 3. The board shall determine whether cause exists to disqualify a
3-31 member of the commission pursuant to a request filed by a party and
3-32 shall notify each party in writing of its decision not later than 15 days
3-33 after the request is made.
3-34 4. Except as otherwise provided in subsection 5, the commission, less
3-35 any member who has been disqualified, may proceed to review a
3-36 complaint without designating a person to sit in the place of a
3-37 disqualified member.
3-38 5. If the number of members who are disqualified or whose
3-39 temporary absence prohibits a quorum of the commission from forming,
3-40 then, upon the disqualification or temporary absence of a member of the
3-41 commission, the board shall designate an alternate member from the list
3-42 developed pursuant to section 11 of this act who is the same class of
3-43 member as the disqualified or absent member to sit in the place of the
3-44 disqualified or absent member. If an alternate member is designated, that
3-45 member must be identified in the notice provided to the parties pursuant
3-46 to subsection 3.
3-47 Sec. 13. 1. Except as otherwise provided in this section, no claim
3-48 involving a constructional defect may be presented to the commission
3-49 until the claimant provides:
4-1 (a) Two written notices by certified mail, return receipt requested, to
4-2 the contractor, at the contractor’s last known address, of the
4-3 constructional defect alleged in the complaint against the contractor; and
4-4 (b) A reasonable opportunity, following the written notices, for the
4-5 contractor to repair the alleged constructional defect.
4-6 2. The written notices required pursuant to subsection 1 must:
4-7 (a) Be mailed at least 30 days apart;
4-8 (b) Specify, in reasonable detail, the defect or any damage or injury to
4-9 each residence or appurtenance that is the subject of the claim;
4-10 (c) Describe in reasonable detail the cause of the defect, if the cause is
4-11 known, and the nature and extent that is known of the damage or injury
4-12 resulting from the defect; and
4-13 (d) Provide the location of each defect within each residence or
4-14 appurtenance to the extent known.
4-15 3. Within 45 days after the contractor receives the first notice, on his
4-16 written request, the contractor is entitled to inspect the property that is
4-17 the subject of the claim to determine the nature and cause of the defect,
4-18 damage or injury and the nature and extent of repairs necessary to
4-19 remedy the defect. The contractor shall, before carrying out the
4-20 inspection, provide reasonable notice of the inspection, and shall carry
4-21 out the inspection at a reasonable time. The contractor may take
4-22 reasonable steps to establish the existence of the defect, damage or
4-23 injury.
4-24 4. Within 15 days after a contractor receives the second notice, a
4-25 claimant may present a claim to the commission as set forth in section 14
4-26 of this act if the contractor fails to:
4-27 (a) Make an agreement that is acceptable to the claimant to make
4-28 repairs, if the contractor is licensed to make the repairs, or cause the
4-29 repairs to be made, at the contractor’s expense, by another contractor
4-30 who is licensed to make the repairs, bonded and insured; or
4-31 (b) Make the repairs specified in an agreement between the claimant
4-32 and contractor pursuant to paragraph (a):
4-33 (1) Within the time specified in the agreement; and
4-34 (2) In a good and workmanlike manner.
4-35 5. A written waiver or settlement agreement executed by a claimant
4-36 after a contractor has corrected or otherwise repaired a constructional
4-37 defect pursuant to this section does not bar a claim for the constructional
4-38 defect if it is determined that the contractor failed to correct or repair the
4-39 defect properly.
4-40 Sec. 14. 1. A claim of a constructional defect is properly presented
4-41 to the commission by filing a complaint with the board. A fee of $50 must
4-42 accompany the complaint.
4-43 2. The complaint must contain a clear and concise statement of the
4-44 facts of the case, including, without limitation, the persons involved and
4-45 the dates and circumstances, so far as they are known, of the alleged
4-46 constructional defect. The commission may dismiss a complaint if the
4-47 complaint is filed without an affidavit supporting the allegations of the
4-48 complaint submitted by an expert concerning the alleged constructional
4-49 defect.
5-1 3. The person against whom a complaint is made must, within 30
5-2 days after receipt of the complaint, file an answer with the board,
5-3 accompanied by a fee of $350. The board may authorize an extension of
5-4 the time in which an answer must be filed only if all parties to the action
5-5 stipulate to the extension.
5-6 4. Unless otherwise stipulated to by all the parties to the action, an
5-7 answer or response that is not timely filed may not be:
5-8 (a) Accepted by the board; or
5-9 (b) Considered by the commission.
5-10 5. The claimant may respond only to the allegations of the answer or
5-11 any accompanying affidavit by filing a written response with the board
5-12 within 15 days after he receives the answer. The commission shall
5-13 disregard any portion of the response that does not address an allegation
5-14 raised in the answer or an affidavit accompanying the answer. No fee
5-15 may be charged or collected by the board for the filing of the response.
5-16 The board may authorize an extension of the time in which a response
5-17 may be filed only if all parties to the action stipulate to the extension.
5-18 6. A copy of any pleading required by this section to be filed with the
5-19 board must be delivered by the party, by certified or registered mail or by
5-20 personal service, to each opposing party or, if an opposing party is
5-21 represented in the proceedings by counsel, to his attorney.
5-22 7. The fees provided by this section must not be charged or collected
5-23 more than once:
5-24 (a) From any party; or
5-25 (b) For the filing of any complaint, regardless of the number of
5-26 parties joined in the complaint.
5-27 8. If a person fails to pay any fee required by this section, the board
5-28 may refer the nonpayment to the office of the attorney general for
5-29 collection of the fee and any costs incurred.
5-30 Sec. 15. 1. The board may, by certified or registered mail, issue
5-31 subpoenas as may be required by the commission, to compel the
5-32 attendance of expert witnesses and, as may be required by the parties or
5-33 the commission, to compel the production of construction records or
5-34 other materials.
5-35 2. The board shall keep the material so produced and make it
5-36 available to the parties, upon request, for inspection or copying. If the
5-37 material is reasonably capable of being copied, the board shall provide a
5-38 copy to the parties, upon request and the receipt of a fee for the copying.
5-39 3. If an expert witness refuses to attend or testify or if a person
5-40 refuses to produce any construction records or other materials as
5-41 required by the subpoena, the board may report to the district court by
5-42 petition asking for an order of the court compelling the expert witness to
5-43 attend and testify or the other person to produce the construction records
5-44 or other materials and setting forth that:
5-45 (a) Due notice has been given of the time and place of attendance of
5-46 the expert witness or for the production of the construction records or
5-47 other materials;
6-1 (b) The expert witness or the person required to produce the
6-2 construction records or other materials has been subpoenaed by the
6-3 board pursuant to this section; and
6-4 (c) The expert witness has failed or refused to attend or testify, to
6-5 produce the construction records or other materials required by the
6-6 subpoena, or to answer questions propounded to him.
6-7 4. Upon receiving such a petition, the court shall enter an order
6-8 directing the expert witness or other person to appear before the court at
6-9 a time and place to be fixed by the court in its order, which is not more
6-10 than 10 days after the date of the order, and show cause why he has not
6-11 attended, testified, or produced the construction records or other
6-12 materials. A certified copy of the order must be served upon the expert
6-13 witness or other person.
6-14 5. If it appears to the court that the subpoena was regularly issued by
6-15 the board, the court shall enter an order that the expert witness or other
6-16 person appear at the time and place fixed in the order and testify or
6-17 produce the required construction records or other materials, and upon
6-18 his failure to obey the order, the expert witness or other person must be
6-19 dealt with as for contempt of court.
6-20 Sec. 16. 1. A claim of a constructional defect must be heard by the
6-21 commission within 45 days after the expiration of the time in which to
6-22 answer the complaint filed pursuant to section 14 of this act.
6-23 2. The commission shall consider all the construction records or
6-24 other materials, including, without limitation, the complaint, answer and
6-25 response, construction records and the testimony of an expert witness the
6-26 commission considers necessary, and shall determine only, from that
6-27 evidence, whether there is a reasonable probability that a constructional
6-28 defect exists and that the claimant was damaged thereby.
6-29 3. Copies of the original complaint and of the findings of the
6-30 commission with regard to each matter considered by the commission
6-31 must be forwarded to the city or county building department where the
6-32 alleged constructional defect occurred, as appropriate.
6-33 4. The board shall promptly mail to each party to the claim a copy of
6-34 the findings of the commission concerning the complaint.
6-35 5. The findings must be based upon a vote of the members of the
6-36 commission made by written ballot, must be rendered within 5 days after
6-37 the hearing on the claim and must be in substantially the following form:
6-38 (a) Based upon a review of the materials submitted by the parties and
6-39 the testimony of expert witnesses, if any, we find that there is a
6-40 reasonable probability that a constructional defect exists and that the
6-41 claimant was damaged thereby;
6-42 (b) Based upon a review of the materials submitted by the parties and
6-43 the testimony of expert witnesses, if any, we find that there is no
6-44 reasonable probability that a constructional defect exists; or
6-45 (c) Based upon a review of the materials submitted by the parties and
6-46 the testimony of expert witnesses, if any, we are unable to reach a
6-47 decision on the issue of whether there is a reasonable probability that a
6-48 constructional defect exists or that the claimant was damaged thereby.
7-1 6. A finding made pursuant to paragraph (a) of subsection 5 must
7-2 also include the findings of the commission concerning each claim of
7-3 constructional defect alleged by the claimant.
7-4 7. Whenever four members of the commission are unable to find that
7-5 there is a reasonable probability that a constructional defect exists and
7-6 that the claimant was damaged thereby or that there is no reasonable
7-7 probability that a constructional defect exists, the commission shall be
7-8 deemed unable to reach a decision on the issue and shall make a finding
7-9 to that effect.
7-10 Sec. 17. 1. If the commission issues a finding in favor of the
7-11 claimant pursuant to paragraph (a) of subsection 5 of section 16 of this
7-12 act, the commission may order the contractor to:
7-13 (a) Make repairs at the contractor’s expense, if the contractor is
7-14 licensed to make the repairs; or
7-15 (b) Cause the repairs to be made, at the contractor’s expense and, if
7-16 insured, his insurer’s expense, by another contractor who is licensed to
7-17 make the repairs, bonded and insured.
7-18 2. Except as otherwise provided in subsection 7, the repairs ordered
7-19 pursuant to this section must be completed within 90 days after the
7-20 contractor is served with written notice of the order.
7-21 3. A copy of the order must be served on each party to the claim
7-22 personally, or by registered or certified mail. The order is effective upon
7-23 such service, unless the commission orders otherwise.
7-24 4. A contractor may petition the board, by written request supported
7-25 by an affidavit of the contractor, for an extension of the time for
7-26 completion of repairs if completion is delayed by the claimant or by other
7-27 events beyond the control of the contractor, or if timely completion of the
7-28 repairs is not reasonably possible.
7-29 5. The board may grant one extension of time not to exceed 45 days
7-30 for a contractor to complete the repairs required by the order of the
7-31 commission if the extension is timely requested and supported by an
7-32 affidavit of the contractor. The board shall provide written notice of any
7-33 grant or denial of an extension of time to each party to the claim within
7-34 10 days after receipt of the request.
7-35 6. Except as otherwise provided in subsection 7, if the contractor
7-36 fails to comply with an order issued pursuant to this section, upon the
7-37 written request of the claimant made within 10 days after the expiration
7-38 of the period for making the repairs or causing the repairs to be made as
7-39 described in the order, or any authorized extension for the contractor to
7-40 make the repairs or cause the repairs to be made, the commission shall
7-41 make additional findings. A copy of the additional findings must be
7-42 served on each party to the claim personally, or by registered or certified
7-43 mail. The additional findings must be in substantially the following form:
7-44 Based upon a review of the materials submitted by the parties and
7-45 the testimony of expert witnesses, if any, the constructional defect
7-46 commission found that there was a reasonable probability that a
7-47 constructional defect exists and that the claimant was damaged
7-48 thereby.
8-1 On .....(date of order)....., the commission issued and properly
8-2 served an order directing the contractor to make or cause to be
8-3 made the repairs for each claim found, by a reasonable probability,
8-4 to be a constructional defect and the cause of damage to the
8-5 claimant.
8-6 We find that the date for the expiration of the period in the order
8-7 for the contractor to make the repairs or cause the repairs to be
8-8 made, or extensions thereof, has passed. We further find that the
8-9 contractor has failed to make the repairs or cause the repairs to be
8-10 made as directed in the order of the commission.
8-11 7. A contractor subject to the provisions of this section may petition
8-12 the district court to stay an order of the commission pending final
8-13 disposition of the claim pursuant to NRS 40.600 to 40.695, inclusive, and
8-14 sections 22 and 23 of this act, or pursuant to an action filed in court.
8-15 Sec. 18. 1. The parties involved in a claim that is not a complex
8-16 matter shall not proceed to carry out the requirements of NRS 40.600 to
8-17 40.695, inclusive, and sections 22 and 23 of this act until the claim has
8-18 been presented to the commission and a determination has been made by
8-19 the commission.
8-20 2. Except as otherwise provided in section 9 of this act, if the
8-21 claimant files a civil action for a constructional defect that is not a
8-22 complex matter in district court after satisfying the procedural
8-23 requirements of NRS 40.645 and 40.680 and sections 2 to 20, inclusive,
8-24 of this act, a person may not be named as a party in the action unless the
8-25 person was named as a party in the complaint that was filed with the
8-26 board and considered by the commission.
8-27 3. Any action involving a constructional defect that is not a complex
8-28 matter which is filed without satisfying the requirements of this section
8-29 must be dismissed without prejudice for failure to comply with this
8-30 section.
8-31 4. Except as otherwise provided in subsection 5, the findings,
8-32 additional findings and any order of the commission are admissible in
8-33 any action concerning that claim which is subsequently filed in district
8-34 court. No other evidence concerning the commission or its deliberations
8-35 is admissible and no member of the commission may be called to testify
8-36 in any such action.
8-37 5. If the commission is unable to reach a decision on the issue of
8-38 whether there is a reasonable probability that a constructional defect
8-39 exists and the claimant was damaged thereby, the findings of the
8-40 commission are not admissible in any action concerning that claim
8-41 which is subsequently filed in district court.
8-42 6. If the claimant files an action in court and the claimant does not
8-43 obtain a judgment in his favor against the contractor, the contractor
8-44 must be awarded reasonable costs and attorney’s fees incurred after the
8-45 date of filing the action in court.
8-46 Sec. 19. Unless the findings of the commission are not admissible
8-47 pursuant to subsection 5 of section 18 of this act, in any action governed
9-1 by NRS 40.600 to 40.695, inclusive, and sections 22 and 23 of this act
9-2 that is tried before a jury, the following instructions must be given:
9-3 1. If testimony of an expert witness was given at the review by the
9-4 commission pursuant to section 16 of this act:
9-5 During the course of this trial certain evidence was admitted
9-6 concerning the findings of the constructional defect commission.
9-7 The findings of the commission were based upon a review of
9-8 construction records and other materials, and the testimony of an
9-9 expert witness based upon his review of those records and materials.
9-10 These findings are to be given the same weight as any other
9-11 evidence, but are not conclusive on your determination of the case.
9-12 2. If testimony of an expert witness was not given at the review by the
9-13 commission pursuant to section 16 of this act:
9-14 During the course of this trial certain evidence was admitted
9-15 concerning the findings of the constructional defect commission.
9-16 The findings of the commission were based solely upon a review of
9-17 construction records and other materials. These findings are to be
9-18 given the same weight as any other evidence, but are not conclusive
9-19 on your determination of the case.
9-20 3. If the commission made additional findings pursuant to section 17
9-21 of this act:
9-22 During the course of this trial certain evidence was admitted
9-23 concerning the additional findings of the constructional defect
9-24 commission. The additional findings of the commission were based
9-25 upon the failure of the contractor to comply with the order of the
9-26 commission to make repairs or cause the repairs to be made of a
9-27 constructional defect within a certain time. These additional
9-28 findings are to be given the same weight as any other evidence, but
9-29 are not conclusive on your determination of the case.
9-30 Sec. 20. The statutes of limitation or repose applicable to a claim
9-31 that is not a complex matter which is based on a constructional defect
9-32 governed by sections 2 to 20, inclusive, of this act are tolled from the time
9-33 notice is given pursuant to section 13 of this act until:
9-34 1. Thirty days after a determination is rendered by the commission
9-35 pursuant to section 16 of this act; or
9-36 2. If the commission issues an order requiring a contractor to make
9-37 repairs or cause the repairs to be made pursuant to section 17 of this act,
9-38 45 days after the expiration of the period provided in the order or an
9-39 extension of the period provided in the order which is authorized by the
9-40 board for the contractor to make repairs or cause the repairs to be made.
9-41 Sec. 21. Chapter 40 of NRS is hereby amended by adding thereto the
9-42 provisions set forth as sections 22 and 23 of this act.
10-1 Sec. 22. A contractor or his representative must be present at any
10-2 inspection at the residence or appurtenance, if any, that is the subject of
10-3 a claim governed by NRS 40.600 to 40.695, inclusive, and this section
10-4 and section 23 of this act, which is performed by the claimant or his
10-5 representative, including, without limitation, an expert hired or retained
10-6 by the claimant to perform such an inspection.
10-7 Sec. 23. 1. The attorney for a claimant in an action for a
10-8 constructional defect pursuant to NRS 40.600 to 40.695, inclusive, and
10-9 this section and section 22 of this act shall maintain a current and
10-10 written accounting of the:
10-11 (a) Cumulative and monthly number of hours billed;
10-12 (b) Cumulative and monthly amount of fees, costs and related
10-13 expenses accrued; and
10-14 (c) Billing rate for each attorney, paralegal or other person who
10-15 provides services for the particular matter.
10-16 2. The attorney shall, on or before the fifth day of each month,
10-17 provide a report of the accounting required by subsection 1 to all
10-18 claimants represented by the attorney in the action.
10-19 3. Upon application for an award of attorney’s fees or any costs
10-20 pursuant to NRS 40.655, 40.670 or 40.687, a claimant shall:
10-21 (a) File with the court a copy of the written account required pursuant
10-22 to subsection 1 as an exhibit to the application; and
10-23 (b) Serve a copy of the application and exhibit on the contractor or his
10-24 representative.
10-25 4. A claimant who directs his attorney to seek an award of attorney’s
10-26 fees or any costs pursuant to NRS 40.600 to 40.695, inclusive, and this
10-27 section and section 22 of this act, shall be deemed to authorize the
10-28 disclosure of the records set forth in subsection 1.
10-29 Sec. 24. NRS 40.600 is hereby amended to read as follows:
10-30 40.600 As used in NRS 40.600 to 40.695, inclusive, and sections 22
10-31 and 23 of this act, unless the context otherwise requires, the words and
10-32 terms defined in NRS 40.605 to 40.630, inclusive, have the meanings
10-33 ascribed to them in those sections.
10-34 Sec. 25. NRS 40.635 is hereby amended to read as follows:
10-35 40.635 NRS 40.600 to 40.695, inclusive[:] , and sections 22 and 23
10-36 and 2 to 20, inclusive, of this act:
10-37 1. Apply to any claim that arises before, on or after July 1, 1995, as the
10-38 result of a constructional defect, except a claim for personal injury or
10-39 wrongful death, if the claim is the subject of an action commenced on or
10-40 after July 1, 1995.
10-41 2. Prevail over any conflicting law otherwise applicable to the claim or
10-42 cause of action.
10-43 3. Do not bar or limit any defense otherwise available except as
10-44 otherwise provided in those sections.
10-45 4. Do not create a new theory upon which liability may be based.
10-46 Sec. 26. NRS 40.650 is hereby amended to read as follows:
10-47 40.650 1. If a claimant unreasonably rejects a reasonable written
10-48 offer of settlement made as
part of a response made pursuant to
NRS 40.645 or 40.682 or does not permit the contractor or independent
11-1 contractor a reasonable opportunity to repair the defect pursuant to an
11-2 accepted offer of settlement and thereafter commences an action governed
11-3 by NRS 40.600 to 40.695, inclusive, and sections 22 and 23 of this act, the
11-4 court in which the action is commenced may:
11-5 (a) Deny the claimant’s attorney’s fees and costs; and
11-6 (b) Award attorney’s fees and costs to the contractor.
11-7 Any sums paid under a homeowner’s warranty, other than sums paid in
11-8 satisfaction of claims that are collateral to any coverage issued to or by the
11-9 contractor, must be deducted from any recovery.
11-10 2. If a contractor fails to:
11-11 (a) Make an offer of settlement;
11-12 (b) Make a good faith response to the claim asserting no liability;
11-13 (c) Complete, in a good and workmanlike manner, the repairs specified
11-14 in an accepted offer;
11-15 (d) Agree to a mediator or accept the appointment of a mediator
11-16 pursuant to NRS 40.680 or subsection 4 of NRS 40.682; or
11-17 (e) Participate in mediation,
11-18 the limitations on damages
and defenses to liability provided in
NRS 40.600 to 40.695, inclusive,
and sections 22 and 23 of this act do not
11-19 apply and the claimant may commence an action without satisfying any
11-20 other requirement of NRS 40.600 to 40.695, inclusive[.] , and sections 22
11-21 and 23 of this act.
11-22 3. If coverage under a homeowner’s warranty is denied by an insurer
11-23 in bad faith, the homeowner and the contractor have a right of action for
11-24 the sums that would have been paid if coverage had been provided, plus
11-25 reasonable attorney’s fees and costs.
11-26 Sec. 27. NRS 40.655 is hereby amended to read as follows:
11-27 40.655 1. Except as otherwise provided in NRS 40.650, in a claim
11-28 governed by NRS 40.600 to 40.695, inclusive, and sections 22 and 23 of
11-29 this act, the claimant may recover only the following damages to the extent
11-30 proximately caused by a constructional defect:
11-31 (a) Any reasonable attorney’s fees;
11-32 (b) The reasonable cost of any repairs already made that were necessary
11-33 and of any repairs yet to be made that are necessary to cure any
11-34 constructional defect that the contractor failed to cure and the reasonable
11-35 expenses of temporary housing reasonably necessary during the repair;
11-36 (c) The reduction in market value of the residence or accessory
11-37 structure, if any, to the extent the reduction is because of structural failure;
11-38 (d) The loss of the use of all or any part of the residence;
11-39 (e) The reasonable value of any other property damaged by the
11-40 constructional defect;
11-41 (f) Any additional costs reasonably incurred by the claimant, including,
11-42 but not limited to, any costs and fees incurred for the retention of experts
11-43 to:
11-44 (1) Ascertain the nature and extent of the constructional defects;
11-45 (2) Evaluate appropriate corrective measures to estimate the value of
11-46 loss of use; and
11-47 (3) Estimate the value of loss of use, the cost of temporary housing
11-48 and the reduction of market value of the residence; and
12-1 (g) Any interest provided by statute.
12-2 2. The amount of any attorney’s fees awarded pursuant to this section
12-3 must be approved by the court.
12-4 3. If a contractor complies with the provisions of NRS 40.600 to
12-5 40.695, inclusive, and sections 22 and 23 of this act, the claimant may not
12-6 recover from the contractor, as a result of the constructional defect,
12-7 anything other than that which is provided pursuant to NRS 40.600 to
12-8 40.695, inclusive[.] , and sections 22 and 23 of this act.
12-9 4. As used in this section, “structural failure” means physical damage
12-10 to the load-bearing portion of a residence or appurtenance caused by a
12-11 failure of the load-bearing portion of the residence or appurtenance.
12-12 Sec. 28. NRS 40.665 is hereby amended to read as follows:
12-13 40.665 In addition to any other method provided for settling a claim
12-14 pursuant to NRS 40.600 to 40.695, inclusive, and sections 22 and 23 of
12-15 this act, a contractor may, pursuant to a written agreement entered into
12-16 with a claimant, settle a claim by repurchasing the claimant’s residence and
12-17 the real property upon which it is located. The agreement may include
12-18 provisions which reimburse the claimant for:
12-19 1. The market value of the residence as if no constructional defect
12-20 existed, except that if a residence is less than 2 years of age and was
12-21 purchased from the contractor against whom the claim is brought, the
12-22 market value is the price at which the residence was sold to the claimant;
12-23 2. The value of any improvements made to the property by a person
12-24 other than the contractor;
12-25 3. Reasonable attorney’s fees and fees for experts; and
12-26 4. Any costs, including costs and expenses for moving and costs,
12-27 points and fees for loans.
12-28 Any offer of settlement made that includes the items listed in this section
12-29 shall be deemed reasonable
for the purposes of subsection 1 of
NRS 40.650.
12-30 Sec. 29. NRS 40.667 is hereby amended to read as follows:
12-31 40.667 1. Except as otherwise provided in subsection 2, a written
12-32 waiver or settlement agreement executed by a claimant after a contractor
12-33 has corrected or otherwise repaired a constructional defect does not bar a
12-34 claim for the constructional defect if it is determined that the contractor
12-35 failed to correct or repair the defect properly.
12-36 2. The provisions of subsection 1 do not apply to any written waiver or
12-37 settlement agreement described in subsection 1, unless:
12-38 (a) The claimant has obtained the opinion of an expert concerning the
12-39 constructional defect;
12-40 (b) The claimant has provided the contractor with a written notice of the
12-41 defect pursuant to NRS 40.645 or 40.682 and a copy of the expert’s
12-42 opinion; and
12-43 (c) The claimant and the contractor have complied with the
12-44 requirements for inspection and repair as provided in NRS 40.600 to
12-45 40.695, inclusive[.] , and sections 22 and 23 of this act.
12-46 3. If a claimant does not prevail in any action which is not barred
12-47 pursuant to this section, the court may:
13-1 (a) Deny the claimant’s attorney’s fees, fees for an expert witness or
13-2 costs; and
13-3 (b) Award attorney’s fees and costs to the contractor.
13-4 Sec. 30. NRS 40.668 is hereby amended to read as follows:
13-5 40.668 1. Notwithstanding the provisions of NRS 40.600 to 40.695,
13-6 inclusive, and sections 22 and 23 of this act, a claimant may not
13-7 commence an action against a subdivider or master developer for a
13-8 constructional defect in an appurtenance constructed on behalf of the
13-9 subdivider or master developer in a planned unit development, to the extent
13-10 that the appurtenance was constructed by or through a licensed general
13-11 contractor, unless:
13-12 (a) The subdivider or master developer fails to provide to the claimant
13-13 the name, address and telephone number of each contractor hired by the
13-14 subdivider or master developer to construct the appurtenance within 30
13-15 days of the receipt by the subdivider or master developer of a request from
13-16 the claimant for such information; or
13-17 (b) After the claimant has made a good faith effort to obtain full
13-18 recovery from the contractors hired by the subdivider or master developer
13-19 to construct the appurtenance, the claimant has not obtained a full
13-20 recovery.
13-21 2. All statutes of limitation or repose applicable to a claim governed by
13-22 this section are tolled from the time the claimant notifies a contractor hired
13-23 by the subdivider or master developer of the claim until the earlier of the
13-24 date:
13-25 (a) A court determines that the claimant cannot obtain a full recovery
13-26 against those contractors; or
13-27 (b) The claimant receives notice that those contractors are bankrupt,
13-28 insolvent or dissolved.
13-29 Tolling pursuant to this subsection applies only to the subdivider or master
13-30 developer. Notwithstanding any applicable statute of limitation or repose,
13-31 the claimant may commence an action against the subdivider or master
13-32 developer for the claim within 1 year after the end of the tolling described
13-33 in this subsection.
13-34 3. Nothing in this section prohibits the commencement of an action
13-35 against a subdivider or master developer for a constructional defect in a
13-36 residence sold, designed or constructed by or on behalf of the subdivider or
13-37 master developer.
13-38 4. Nothing in this section prohibits a person other than the claimant
13-39 from commencing an action against a subdivider or master developer to
13-40 enforce his own rights.
13-41 5. The provisions of this section do not apply to a subdivider or master
13-42 developer who acts as a general contractor or uses his license as a general
13-43 contractor in the course of constructing the appurtenance that is the subject
13-44 of the action.
13-45 6. As used in this section:
13-46 (a) “Master developer” means a person who buys, sells or develops a
13-47 planned unit development, including, without limitation, a person who
13-48 enters into a development agreement pursuant to NRS 278.0201.
14-1 (b) “Planned unit development” has the meaning ascribed to it in
NRS 278A.065.
14-2 (c) “Subdivider” has the meaning ascribed to it in NRS 278.0185.
14-3 Sec. 31. NRS 40.675 is hereby amended to read as follows:
14-4 40.675 1. A contractor who makes or provides for
repairs under
NRS 40.600 to 40.695, inclusive,
and sections 22 and 23 and 2 to 20,
14-5 inclusive, of this act may take reasonable steps to prove that the repairs
14-6 were made and to have them inspected.
14-7 2. The provisions of NRS 40.600 to 40.695, inclusive, and sections 22
14-8 and 23 and 2 to 20, inclusive, of this act regarding inspection and repair
14-9 are in addition to any rights of inspection and settlement provided by
14-10 common law or by another statute.
14-11 Sec. 32. NRS 40.680 is hereby amended to read as follows:
14-12 40.680 1. Except as otherwise provided in this chapter[,] and
14-13 sections 2 to 20, inclusive, of this act, before an action based on a claim
14-14 governed by NRS 40.600 to 40.695, inclusive, and sections 22 and 23 of
14-15 this act may be commenced in court, the matter must be submitted to
14-16 mediation, unless mediation is waived in writing by the contractor and the
14-17 claimant.
14-18 2. The claimant and contractor must select a mediator by agreement. If
14-19 the claimant and contractor fail to agree upon a mediator within 45 days
14-20 after a mediator is first selected by the claimant, either party may petition
14-21 the American Arbitration Association, the Nevada Arbitration Association,
14-22 Nevada Dispute Resolution Services or any other mediation service
14-23 acceptable to the parties for the appointment of a mediator. A mediator so
14-24 appointed may discover only those documents or records which are
14-25 necessary to conduct the mediation. The mediator shall convene the
14-26 mediation within 60 days after the matter is submitted to him, unless the
14-27 parties agree to extend the time. Except in a complex matter, the claimant
14-28 shall, before the mediation begins, deposit $50 with the mediation service
14-29 and the contractor shall deposit with the mediation service the remaining
14-30 amount estimated by the mediation service as necessary to pay the fees and
14-31 expenses of the mediator for the first session of mediation, and the
14-32 contractor shall deposit additional amounts demanded by the mediation
14-33 service as incurred for that purpose. In a complex matter, each party shall
14-34 share equally in the deposits estimated by the mediation service. Unless
14-35 otherwise agreed, the total fees for each day of mediation and the mediator
14-36 must not exceed $750 per day.
14-37 3. If the parties do not reach an agreement concerning the matter
14-38 during mediation or if the contractor fails to pay the required fees and
14-39 appear, the claimant may commence his action in court and:
14-40 (a) The reasonable costs and fees of the mediation are recoverable by
14-41 the prevailing party as costs of the action.
14-42 (b) Either party may petition the court in which the action is
14-43 commenced for the appointment of a special master.
14-44 4. A special master appointed pursuant to subsection 3 may:
14-45 (a) Review all pleadings, papers or documents filed with the court
14-46 concerning the action.
15-1 (b) Coordinate the discovery of any books, records, papers or other
15-2 documents by the parties, including the disclosure of witnesses and the
15-3 taking of the deposition of any party.
15-4 (c) Order any inspections on the site of the property by a party and any
15-5 consultants or experts of a party.
15-6 (d) Order settlement conferences and attendance at those conferences by
15-7 any representative of the insurer of a party.
15-8 (e) Require any attorney representing a party to provide statements of
15-9 legal and factual issues concerning the action.
15-10 (f) Refer to the judge who appointed him or to the presiding judge of the
15-11 court in which the action is commenced any matter requiring assistance
15-12 from the court.
15-13 The special master shall not, unless otherwise agreed by the parties,
15-14 personally conduct any settlement conferences or engage in any ex parte
15-15 meetings regarding the action.
15-16 5. Upon application by a party to the court in which the action is
15-17 commenced, any decision or other action taken by a special master
15-18 appointed pursuant to this section may be appealed to the court for a
15-19 decision.
15-20 6. A report issued by a mediator or special master that indicates that
15-21 either party has failed to appear before him or to mediate in good faith is
15-22 admissible in the action, but a statement or admission made by either party
15-23 in the course of mediation is not admissible.
15-24 Sec. 33. NRS 40.688 is hereby amended to read as follows:
15-25 40.688 1. If a claimant attempts to sell a residence that is or has been
15-26 the subject of a claim governed by NRS 40.600 to 40.695, inclusive, and
15-27 sections 22 and 23 and 2 to 20, inclusive, of this act, he shall disclose, in
15-28 writing, to any prospective purchaser of the residence, not less than 30 days
15-29 before the close of escrow for the sale of the residence or, if escrow is to
15-30 close less than 30 days after the execution of the sales agreement, then
15-31 immediately upon the execution of the sales agreement or, if a claim is
15-32 initiated less than 30 days before the close of escrow, within 24 hours after
15-33 giving written notice to the
contractor pursuant to subsection 1 of
NRS 40.645 [or] , subsection
1 of NRS 40.682[:] or section 13 of this act:
15-34 (a) All notices given by the claimant to the contractor pursuant to
NRS 40.600 to 40.695, inclusive,
and sections 22 and 23 and 2 to 20,
15-35 inclusive, of this act that are related to the residence;
15-36 (b) All opinions the claimant has obtained from experts regarding a
15-37 constructional defect that is or has been the subject of the claim;
15-38 (c) The terms of any settlement, order or judgment relating to the claim;
15-39 and
15-40 (d) A detailed report of all repairs made to the residence by or on behalf
15-41 of the claimant as a result of a constructional defect that is or has been the
15-42 subject of the claim.
15-43 2. Before taking any action on a claim pursuant to NRS 40.600 to
15-44 40.695, inclusive, and sections 22 and 23 and 2 to 20, inclusive, of this
15-45 act, the attorney for a claimant shall notify the claimant in writing of the
15-46 provisions of this section.
16-1 Sec. 34. NRS 40.689 is hereby amended to read as follows:
16-2 40.689 1. Upon petition by a party:
16-3 (a) The court shall give preference in setting a date for the trial of an
16-4 action commenced pursuant to NRS 40.600 to 40.695, inclusive[;] , and
16-5 sections 22 and 23 of this act; and
16-6 (b) The court may assign an action commenced pursuant to NRS 40.600
16-7 to 40.695, inclusive, and sections 22 and 23 of this act to a senior judge.
16-8 2. If the action is assigned to a senior judge upon petition by a party:
16-9 (a) Any additional expenses caused by the assignment must be borne
16-10 equally by each party involved; or
16-11 (b) The judge may distribute any additional expenses among the parties
16-12 as he deems appropriate.
16-13 Sec. 35. NRS 40.690 is hereby amended to read as follows:
16-14 40.690 1. A claim governed by NRS 40.600 to 40.695, inclusive,
16-15 and sections 22 and 23 of this act may not be brought by a claimant or
16-16 contractor against a government, governmental agency or political
16-17 subdivision of a government, during the period in which a claim for a
16-18 constructional defect is being settled, mediated or otherwise resolved
16-19 pursuant to NRS 40.600 to 40.695, inclusive[.] , and sections 22 and 23 of
16-20 this act. The settlement of such a claim does not affect the rights or
16-21 obligations of the claimant or contractor in any action brought by the
16-22 claimant or contractor against a third party.
16-23 2. A contractor or claimant may require a party against whom the
16-24 contractor or claimant asserts a claim governed by NRS 40.600 to 40.695,
16-25 inclusive, and sections 22 and 23 of this act to appear and participate in
16-26 proceedings held pursuant to those sections as if the party were a contractor
16-27 and the party requiring him to appear were a claimant. The party must
16-28 receive notice of the proceedings from the contractor or claimant.
16-29 Sec. 36. NRS 40.695 is hereby amended to read as follows:
16-30 40.695 1. Except as otherwise provided in subsection 2, statutes of
16-31 limitation or repose applicable to a claim based on a constructional defect
16-32 governed by NRS 40.600 to 40.695, inclusive, and sections 22 and 23 of
16-33 this act are tolled from the time notice of the claim is given, until 30 days
16-34 after mediation is concluded or waived in writing pursuant to NRS 40.680
16-35 or subsection 4 of NRS 40.682.
16-36 2. Tolling under this section applies:
16-37 (a) Only to a claim that is not a complex matter.
16-38 (b) To a third party regardless of whether the party is required to appear
16-39 in the proceeding.
16-40 Sec. 37. NRS 113.135 is hereby amended to read as follows:
16-41 113.135 1. Upon signing a sales agreement with the initial purchaser
16-42 of residential property that was not occupied by the purchaser for more
16-43 than 120 days after substantial completion of the construction of the
16-44 residential property, the seller shall:
16-45 (a) Provide to the initial purchaser a copy of NRS 11.202 to 11.206,
16-46 inclusive, and 40.600 to 40.695, inclusive[;] , and sections 22 and 23 and
16-47 2 to 20, inclusive, of this act;
17-1 (b) Notify the initial purchaser of any soil report prepared for the
17-2 residential property or for the subdivision in which the residential property
17-3 is located; and
17-4 (c) If requested in writing by the initial purchaser not later than 5 days
17-5 after signing the sales agreement, provide to the purchaser without cost
17-6 each report described in paragraph (b) not later than 5 days after the seller
17-7 receives the written request.
17-8 2. Not later than 20 days after receipt of all reports pursuant to
17-9 paragraph (c) of subsection 1, the initial purchaser may rescind the sales
17-10 agreement.
17-11 3. The initial purchaser may waive his right to rescind the sales
17-12 agreement pursuant to subsection 2. Such a waiver is effective only if it is
17-13 made in a written document that is signed by the purchaser.
17-14 Sec. 38. The amendatory provisions of this act do not apply to a claim
17-15 initiated or an action commenced pursuant to NRS 40.600 to 40.695,
17-16 inclusive, and sections 22 and 23 of this act, or pursuant to sections 2 to 20,
17-17 inclusive, of this act, unless the claim was initiated or the action was
17-18 commenced on or after October 1, 2001.
17-19 H