Senate Bill No. 516–Committee on Commerce and Labor

 

March 26, 2001

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes concerning contractors and constructional defects. (BDR 54‑1452)

 

FISCAL NOTE:            Effect on Local Government: Yes.

                                    Effect on the State: Yes.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to real property; requiring a claimant to present a claim of a constructional defect to the state contractors’ board for review and investigation before commencing an action based upon the claim; revising provisions governing the duties of the state contractors’ board to require the board to review and investigate a claim of a constructional defect; requiring a contractor to disclose certain information to the purchaser of a new residence; revising the definition of a constructional defect; eliminating mandatory mediation and revising procedures in cases involving a constructional defect; revising provisions concerning common-interest communities; providing a penalty; and providing other matters properly relating thereto.

 

   Whereas, The State of Nevada is the fastest growing state in the nation; and

   Whereas, As a result, Nevada is experiencing an increase in new home construction to meet the demands of its increasing population; and

   Whereas, Every resident of this state deserves to live in a safe home that is free from hazardous defects; and

   Whereas, On occasion, during the course of new home construction, mistakes may be made resulting in construction defects; and

   Whereas, The legislature wishes to encourage builders to repair identified construction defects in a timely and responsible manner; and

   Whereas, To accomplish this goal, homeowners need to cooperate and allow builders an opportunity to repair identified defects; and

   Whereas, The legislature further wishes to encourage homeowners and builders to resolve allegations of construction defects in a manner which avoids litigating in an overburdened court system; now, therefore,

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

2-1    Section 1. Chapter 624 of NRS is hereby amended by adding thereto

2-2  the provisions set forth as sections 2 to 13, inclusive, of this act.

2-3    Sec. 2.  As used in sections 2 to 12, inclusive, of this act, unless the

2-4  context otherwise requires, the words and terms defined in section 3 to 6,

2-5  inclusive, of this act have the meanings ascribed to them in those

2-6  sections.

2-7    Sec. 3.  “Claimant” has the meaning ascribed to it in NRS 40.610.

2-8    Sec. 4.  “Constructional defect” has the meaning ascribed to it in

2-9  NRS 40.615.

2-10    Sec. 5.  “Contractor” has the meaning ascribed to it in NRS 40.620.

2-11    Sec. 6. “Subcontractor” has the meaning ascribed to it in section 20

2-12  of this act.

2-13    Sec. 7.  1.  The board shall review each claim of a constructional

2-14  defect submitted to it pursuant to NRS 40.680.

2-15    2.  A claim of a constructional defect is properly presented to the

2-16  board by submitting a copy of the written notice of constructional defects

2-17  provided to a contractor by a claimant pursuant to subsection 1 of NRS

2-18  40.645 or subsection 1 of NRS 40.682.

2-19    3.  After a claimant has presented a claim to the board pursuant to

2-20  subsection 2, a contractor shall immediately provide:

2-21    (a) A copy of his response to the claimant’s written notice of

2-22  constructional defects that he prepared pursuant to NRS 40.645 or

2-23  40.682, as applicable, to the board;

2-24    (b) A written summary identifying each subcontractor who the

2-25  contractor reasonably believes performed the original construction which

2-26  is alleged to be a constructional defect; and

2-27    (c) A written notice that a claimant has submitted a claim to the board

2-28  for review pursuant to subsection 2 to each subcontractor who the

2-29  contractor has identified as having performed the original construction

2-30  which is alleged to be a constructional defect.

2-31    4.  The board shall investigate each claim submitted to the board

2-32  pursuant to subsection 1. The investigation must be completed within 30

2-33  days after the claim is submitted to the board pursuant to subsection 2.

2-34    5.  Upon completion of the investigation, the board shall issue an

2-35  advisory opinion concerning the claim of a constructional defect not

2-36  later than 2 weeks after the investigation is completed.

2-37    Sec. 8.  As part of the investigation conducted pursuant to section 7

2-38  of this act, the board may hold a hearing on a claim of a constructional

2-39  defect submitted to the board pursuant to section 7 of this act after giving

2-40  notice of the time, place and nature of the hearing:

2-41    1.  If the board, in its discretion, determines that a hearing is

2-42  necessary; or

2-43    2.  Upon the written request of:

2-44    (a) The claimant;

2-45    (b) The contractor; or

2-46    (c) A subcontractor who the contractor has identified pursuant to

2-47  section 7 of this act as having performed the original construction which

2-48  is alleged to be a constructional defect.

3-1    Sec. 9. 1.  If the board issues an advisory opinion pursuant to

3-2  section 7 of this act that is, at least in part, favorable to the claimant, the

3-3  board shall send a written order by certified mail to the contractor and to

3-4  the last known address of each subcontractor, if any, who has been

3-5  notified of the claim pursuant to section 7 of this act and who has been

3-6  identified by the contractor as having performed the original

3-7  construction which, in the opinion of the board, constitutes a

3-8  constructional defect, directing the contractor and subcontractor, if

3-9  applicable, to make repairs consistent with the order of the board

3-10  pursuant to this section.

3-11    2.  A subcontractor who receives a written order from the board

3-12  pursuant to subsection 1, shall, within 10 days after receiving the notice,

3-13  provide written notice to the board, the contractor and the claimant

3-14  indicating whether the subcontractor, at the subcontractor’s expense,

3-15  will comply with the order by making the repairs specified in the order. If

3-16  a subcontractor provides a written notice of intent to comply with an

3-17  order pursuant to this section, except as otherwise provided in subsection

3-18  6, the subcontractor must complete the repairs in the time specified by

3-19  the board in the order.

3-20    3.  A contractor who receives a written order pursuant to subsection 1

3-21  shall make repairs, at the contractor’s expense, if the contractor is

3-22  licensed to make the repairs, or cause the repairs to be made, at the

3-23  contractor’s expense, by another contractor who is licensed to make the

3-24  repairs, bonded and insured, if a subcontractor who was sent a written

3-25  order pursuant to subsection 1:

3-26    (a) Fails to provide a written notice of intent to comply with the order

3-27  of the board within the time specified in the order pursuant to subsection

3-28  2;

3-29    (b) Provides a timely written response to the order of the board

3-30  indicating a refusal to make the repairs specified in the order; or

3-31    (c) Fails, within the time specified in the order of the board, to make

3-32  repairs or cause repairs to be made after providing a written notice of

3-33  intent to comply with the order of the board.

3-34    4.  Except as otherwise provided in subsection 6, any repairs ordered

3-35  pursuant to this section must be completed within the time provided by

3-36  the board in the order.

3-37    5.  The order is effective upon such service, unless the board orders

3-38  otherwise.

3-39    6.  A contractor or subcontractor may petition the board, by written

3-40  request supported by an affidavit of the contractor or subcontractor, for

3-41  an extension of the time for completion of repairs if completion is

3-42  delayed by:

3-43    (a) The claimant;

3-44    (b) A subcontractor who has failed to make repairs or cause repairs to

3-45  be made after providing a notice of intent to comply with the order of the

3-46  board pursuant to subsection 2; or

3-47    (c) Other events beyond the control of the contractor or subcontractor,

3-48  or if timely completion of the repairs is not reasonably possible.

4-1    7.  For the purpose of judicial review, an order of the board pursuant

4-2  to this section is a final order as to the contractor and each subcontractor

4-3  who has received notice that a claim has been submitted to the board for

4-4  review pursuant to section 7 of this act.

4-5    8.  If the board orders a contractor or subcontractor to make repairs

4-6  or cause repairs to be made pursuant to this section, the claimant shall,

4-7  upon reasonable notice from the contractor or subcontractor, allow the

4-8  contractor or subcontractor reasonable access to the residence or

4-9  appurtenance to make repairs or cause the repairs to be made.

4-10    9.  If a claimant prevents a contractor or subcontractor from making

4-11  repairs which have been ordered by the board pursuant to this section,

4-12  the claimant may not recover damages in any subsequent action filed

4-13  pursuant to NRS 40.680:

4-14    (a) Associated with the defect that the contractor or subcontractor was

4-15  prevented from repairing; or

4-16    (b) For damage to other parts of the residence or appurtenance that is

4-17  the proximate result of the refusal of the claimant to allow a contractor

4-18  or subcontractor to make repairs pursuant to this section.

4-19    10.  As used in this section:

4-20    (a) “Appurtenance” has the meaning ascribed to it in NRS 40.605.

4-21    (b) “Residence” has the meaning ascribed to it in NRS 40.630.

4-22    Sec. 10. The board shall adopt regulations to carry out the

4-23  provisions of sections 2 to 12, inclusive, of this act that must include,

4-24  without limitation:

4-25    1.  The standards to be used in reviewing a claim of a constructional

4-26  defect;

4-27    2.  The form in which the advisory opinion of the board concerning a

4-28  claim will be issued;

4-29    3.  The procedures which the parties to a claim and the board must

4-30  follow during the review process, that are consistent with the provisions

4-31  of chapter 233B of NRS; and

4-32    4.  Any other rules and procedures reasonably necessary for the

4-33  board to carry out its duties pursuant to sections 2 to 12, inclusive, of this

4-34  act.

4-35    Sec. 11.  An advisory opinion and any order of the board requiring a

4-36  contractor or subcontractor to make repairs or cause repairs to be made

4-37  are admissible in any action concerning the claim of a constructional

4-38  defect that is subsequently filed in district court. No other evidence

4-39  concerning the board or its deliberations is admissible, and no member

4-40  of the board may be called to testify in any such action.

4-41    Sec. 12.  The board and its members acting pursuant to sections 2 to

4-42  12, inclusive, of this act are immune from any civil liability for any

4-43  decision or action taken in good faith and without malicious intent in

4-44  response to a claim submitted to the board.

4-45    Sec. 13. A contractor who develops, constructs or landscapes a new

4-46  residence shall, not later than 30 days after the close of escrow of the

4-47  initial purchase of the residence, provide in writing to the initial

4-48  purchaser of the residence:

5-1    1.  The name, license number, business address and telephone

5-2  number of each subcontractor who performed any work related to such

5-3  development, construction or landscaping of the residence; and

5-4    2.  A brief description of the work performed by each subcontractor

5-5  identified in subsection 1.

5-6    Sec. 14.  NRS 624.020 is hereby amended to read as follows:

5-7    624.020  1.  [For the purpose of] As used in this chapter, [“contractor”

5-8  is synonymous with “builder.”

5-9    2.  Within the meaning of this chapter, a contractor is] unless the

5-10  context otherwise requires, “contractor”:

5-11    (a) Means any person, except a registered architect or a licensed

5-12  professional engineer, acting solely in his professional capacity, who in any

5-13  capacity other than as the employee of another with wages as the sole

5-14  compensation, undertakes to, or offers to undertake to, or purports to have

5-15  the capacity to undertake to, or submits a bid to, or does himself or by or

5-16  through others, construct, alter, repair, add to, subtract from, improve,

5-17  move, wreck or demolish any building, highway, road, railroad, excavation

5-18  or other structure, project, development or improvement, or to do any part

5-19  thereof, including the erection of scaffolding or other structures or works in

5-20  connection therewith.

5-21    (b) Is synonymous with “builder.”

5-22    2.  Evidence of the securing of any permit from a governmental agency

5-23  or the employment of any person on a construction project must be

5-24  accepted by the board or any court of this state as prima facie evidence that

5-25  the person securing that permit or employing any person on a construction

5-26  project is acting in the capacity of a contractor pursuant to the provisions of

5-27  this chapter.

5-28    3.  A contractor [within the meaning of this chapter] includes :

5-29    (a) A subcontractor or specialty contractor, but does not include anyone

5-30  who merely furnishes materials or supplies without fabricating them into,

5-31  or consuming them in the performance of, the work of a contractor.

5-32    [4.  A contractor within the meaning of this chapter includes a]

5-33    (b) A construction manager who performs management and counseling

5-34  services on a construction project for a professional fee.

5-35    Sec. 15.  NRS 624.3016 is hereby amended to read as follows:

5-36    624.3016  The following acts or omissions, among others, constitute

5-37  cause for disciplinary action under NRS 624.300:

5-38    1.  Any fraudulent or deceitful act committed in the capacity of a

5-39  contractor.

5-40    2.  A conviction of a violation of NRS 624.730 or a felony or a crime

5-41  involving moral turpitude.

5-42    3.  Knowingly making a false statement in or relating to the recording

5-43  of a notice of lien pursuant to the provisions of NRS 108.226.

5-44    4.  Failure to give a notice required by NRS 108.245 or 108.246.

5-45    5.  Failure to comply with NRS 597.713, 597.716 or 597.719 or any

5-46  regulations of the board governing contracts for the construction of

5-47  residential pools and spas.

5-48    6.  Failure to comply with NRS 624.600[.] and section 13 of this act.

6-1    7.  Misrepresentation or the omission of a material fact, or the

6-2  commission of any other fraudulent or deceitful act, to obtain a license.

6-3    8.  Failure to pay an assessment required pursuant to NRS 624.470.

6-4    Sec. 16.  NRS 624.302 is hereby amended to read as follows:

6-5    624.302  The following acts or omissions, among others, constitute

6-6  cause for disciplinary action pursuant to NRS 624.300:

6-7    1.  Contracting, offering to contract or submitting a bid as a contractor

6-8  if the contractor’s license:

6-9    (a) Has been suspended or revoked pursuant to NRS 624.300; or

6-10    (b) Is inactive.

6-11    2.  Failure to comply with a written citation issued pursuant to NRS

6-12  624.341 within the time permitted for compliance set forth in the citation

6-13  [,] or, if a hearing is held pursuant to NRS 624.291, within 15 business

6-14  days after the hearing.

6-15    3.  Except as otherwise provided in subsection 2, failure to pay an

6-16  administrative fine imposed pursuant to this chapter within 30 days after:

6-17    (a) Receiving notice of the imposition of the fine; or

6-18    (b) The final administrative or judicial decision affirming the imposition

6-19  of the fine,

6-20  whichever occurs later.

6-21    4.  The suspension, revocation or other disciplinary action taken by

6-22  another state against a contractor based on a license issued by that state if

6-23  the contractor is licensed in this state or applies for a license in this state. A

6-24  certified copy of the suspension, revocation or other disciplinary action

6-25  taken by another state against a contractor based on a license issued by that

6-26  state is conclusive evidence of that action.

6-27    5.  Failure or refusal to respond to a written request from the board or

6-28  its designee to cooperate in the investigation of a complaint.

6-29    6.  Failure or refusal to comply with a written request by the board or

6-30  its designee for information or records, or obstructing or delaying the

6-31  providing of such information or records.

6-32    7.  Failure or refusal to comply with a written order issued pursuant

6-33  to section 9 of this act within the time required for completion of repairs

6-34  set forth in the order.

6-35    Sec. 17.  NRS 645.6052 is hereby amended to read as follows:

6-36    645.6052  1.  A person who is licensed pursuant to this chapter as a

6-37  real estate broker, real estate broker-salesman or real estate salesman may

6-38  apply to the real estate division for a permit to engage in property

6-39  management.

6-40    2.  An applicant for a permit must:

6-41    (a) Furnish proof satisfactory to the division that he has successfully

6-42  completed at least 24 classroom hours of instruction in property

6-43  management; and

6-44    (b) Comply with all other requirements established by the commission

6-45  for the issuance of a permit.

6-46    3.  A permit expires, and may be renewed, at the same time as the

6-47  license of the holder of the permit.

6-48    4.  An applicant for the renewal of a permit must:

7-1    (a) Furnish proof satisfactory to the division that he has successfully

7-2  completed at least 3 of the hours of the continuing education required for

7-3  the renewal of his license pursuant to NRS 645.575 in an approved

7-4  educational course, seminar or conference concerning property

7-5  management; and

7-6    (b) Comply with all other requirements established by the commission

7-7  for the renewal of a permit.

7-8    5.  The commission may adopt such regulations as it determines are

7-9  necessary to carry out the provisions of this section[.] and section 40 of

7-10  this act. The regulations may, without limitation:

7-11    (a) Establish additional requirements for the issuance or renewal of a

7-12  permit.

7-13    (b) Establish a fee for the issuance and renewal of a permit.

7-14    (c) Set forth standards of education for the approval of a course of

7-15  instruction to qualify a person for a permit pursuant to this section.

7-16    Sec. 18.  Chapter 40 of NRS is hereby amended by adding thereto the

7-17  provisions set forth as sections 19 to 23, inclusive, of this act.

7-18    Sec. 19. “Design professional” means a person with a professional

7-19  license or certificate issued pursuant to chapter 623, 623A or 625 of

7-20  NRS.

7-21    Sec. 20.  “Subcontractor” means a contractor who performs work on

7-22  behalf of another contractor in the construction of a residence or

7-23  appurtenance.

7-24    Sec. 21.  A person rendering an expert opinion or professional

7-25  opinion in a matter governed by NRS 40.600 to 40.695, inclusive, and

7-26  sections 19 to 23, inclusive, of this act, and sections 2 to 12, inclusive, of

7-27  this act must:

7-28    1.  Have a license issued pursuant to chapter 624 of NRS in the

7-29  appropriate classification established by the provisions of NRS 624.215,

7-30  624.218 and 624.220 for the trade or skill for which he is rendering an

7-31  opinion; or

7-32    2.  Have an appropriate occupational or professional license issued

7-33  by a board, commission or agency of the State of Nevada for the trade or

7-34  skill upon which he is rendering an opinion.

7-35    Sec. 22. 1.  An attorney representing a person in a matter governed

7-36  by the provisions of NRS 40.600 to 40.695, inclusive, and sections 19 to

7-37  23, inclusive, of this act, and sections 2 to 12, inclusive, of this act shall

7-38  not employ an expert witness with whom the attorney, a person employed

7-39  by the same firm or company as the attorney, a relative of the attorney or

7-40  a relative of a person employed by the same firm or company as the

7-41  attorney has a fiduciary relationship.

7-42    2.  An attorney representing a person in a matter governed by the

7-43  provisions of NRS 40.600 to 40.695, inclusive, and sections 19 to 23,

7-44  inclusive, of this act, and sections 2 to 12, inclusive, of this act shall not

7-45  employ a consulting firm in which the attorney, a person employed by the

7-46  same firm or company as the attorney, a relative of the attorney or a

7-47  relative of a person employed by the same firm or company as the

7-48  attorney has a financial interest.

8-1    3.  As used in this section, “relative” means a spouse or any other

8-2  person who is related within the second degree by blood or marriage.

8-3    Sec. 23. 1.  Except as otherwise provided in this section, if the

8-4  provisions of a policy of insurance impose a duty upon an insurer to

8-5  defend an action governed by NRS 40.600 to 40.695, inclusive, and

8-6  sections 19 to 23, inclusive, of this act, and sections 2 to 12, inclusive, of

8-7  this act and a conflict of interest exists which creates a duty on the

8-8  insurer to provide independent counsel to the insured, the insurer shall

8-9  inform the insured that a possible conflict of interest may arise or exists

8-10  and that the insured is required to select independent counsel to

8-11  represent the insured unless he signs a waiver pursuant to subsection 2.

8-12  A person who is selected as independent counsel pursuant to this section

8-13  shall promptly inform the insurer of such selection. A contract of

8-14  insurance may specify the manner of selecting independent counsel

8-15  pursuant to this section.

8-16    2.  An insured is not required to select independent counsel pursuant

8-17  to subsection 1 if, at the time that the insured is informed that a possible

8-18  conflict of interest may arise or exists, the insured expressly waives in

8-19  writing the right to independent counsel. The right to independent

8-20  counsel may not be waived in the terms of a policy of insurance. The

8-21  insured may waive the right to independent counsel by signing a

8-22  statement in substantially the following form:

 

8-23  I have been advised and informed of my right to select independent

8-24  counsel to represent me in this lawsuit. I have considered this matter

8-25  fully, and freely waive my right to select independent counsel at this

8-26  time. I authorize my insurer to select a defense attorney to represent

8-27  me in this lawsuit.

 

8-28    3.  The insurer may require the independent counsel selected by the

8-29  insured pursuant to this section to possess certain minimum

8-30  qualifications, including, without limitation:

8-31    (a) At least 5 years of practice in civil litigation, including, without

8-32  limitation, substantial experience in defending the issue involved in the

8-33  action; and

8-34    (b) Coverage for errors and omissions.

8-35    4.  The insurer shall pay all fees charged by an independent counsel

8-36  selected by the insured pursuant to this section, including, without

8-37  limitation, all fees and costs reasonably necessary for the defense of the

8-38  insured. A dispute concerning attorney’s fees that are owed pursuant to

8-39  this section must be resolved by final and binding arbitration by a neutral

8-40  arbitrator selected by the parties to the dispute.

8-41    5.  After an insured has selected an independent counsel pursuant to

8-42  this section, the insured and the independent counsel shall:

8-43    (a) Disclose to the insurer all information concerning the action,

8-44  except information concerning disputes in coverage that is privileged;

8-45  and

9-1    (b) Inform and consult with an insurer on all matters concerning the

9-2  action, except matters concerning disputes in coverage that are

9-3  privileged.

9-4    6.  A claim of privilege asserted pursuant to subsection 5 is subject to

9-5  an in camera review by a court with jurisdiction over the claim.

9-6    7.  The disclosure of information to an insurer pursuant to subsection

9-7  5 does not constitute a waiver of a privilege concerning the information

9-8  as to any other party.

9-9    8.  The provisions of this section do not relieve an insured of his duty

9-10  to cooperate with his insurer under the terms of the contract of

9-11  insurance.

9-12    9.  For the purposes of this section, a conflict of interest exists in

9-13  circumstances which include, without limitation, when an insurer

9-14  provides a defense to an action pursuant to a reservation of rights which

9-15  reserves the right to deny coverage.

9-16    Sec. 24.  NRS 40.600 is hereby amended to read as follows:

9-17    40.600  As used in NRS 40.600 to 40.695, inclusive, and sections 19 to

9-18  23, inclusive, of this act, unless the context otherwise requires, the words

9-19  and terms defined in NRS 40.605 to 40.630, inclusive, and sections 19 and

9-20  20 of this act have the meanings ascribed to them in those sections.

9-21    Sec. 25.  NRS 40.615 is hereby amended to read as follows:

9-22    40.615  “Constructional defect” [includes a defect in the design,

9-23  construction, manufacture, repair or landscaping of a new residence, of an

9-24  alteration of or addition to an existing residence, or of an appurtenance.

9-25  The term includes physical damage to the] means a condition that

9-26  materially affects the value or use of a residence, an appurtenance or the

9-27  real property to which the residence or appurtenance is affixed . [that is

9-28  proximately caused by a constructional defect.] in an adverse manner.

9-29    Sec. 26.  NRS 40.635 is hereby amended to read as follows:

9-30    40.635  NRS 40.600 to 40.695, inclusive[:] , and sections 19 to 23,

9-31  inclusive, of this act, and sections 2 to 12, inclusive, of this act:

9-32    1.  Apply to any claim that arises before, on or after July 1, 1995, as the

9-33  result of a constructional defect, except a claim for personal injury or

9-34  wrongful death, if the claim is the subject of an action commenced on or

9-35  after July 1, 1995.

9-36    2.  Prevail over any conflicting law otherwise applicable to the claim or

9-37  cause of action.

9-38    3.  Do not bar or limit any defense otherwise available except as

9-39  otherwise provided in those sections.

9-40    4.  Do not create a new theory upon which liability may be based.

9-41    Sec. 27.  NRS 40.645 is hereby amended to read as follows:

9-42    40.645  Except as otherwise provided in this section and NRS 40.670:

9-43    1.  For a claim that is not a complex matter, [at least 60 days] before a

9-44  claimant submits a claim of a constructional defect to the state

9-45  contractors’ board for review pursuant to NRS 40.680 and sections 2 to

9-46  12, inclusive, of this act and before a claimant commences an action

9-47  against a contractor for damages arising from a constructional defect, the

9-48  claimant must give written notice by certified mail, return receipt

9-49  requested, to the contractor, at the contractor’s last known address,

10-1  specifying in reasonable detail the defects or any damages or injuries to

10-2  each residence or appurtenance that is the subject of the claim. The notice

10-3  must describe in reasonable detail the cause of the defects if the cause is

10-4  known, the nature and extent that is known of the damage or injury

10-5  resulting from the defects and the location of each defect within each

10-6  residence or appurtenance to the extent known. An expert opinion

10-7  concerning the cause of the defects and the nature and extent of the damage

10-8  or injury resulting from the defects based on a representative sample of the

10-9  components of the residences and appurtenances involved in the action

10-10  satisfies the requirements of this section. During the 45-day period after the

10-11  contractor receives the notice, on his written request, the contractor [is

10-12  entitled to] may inspect the property that is the subject of the claim to

10-13  determine the nature and cause of the defect, damage or injury and the

10-14  nature and extent of repairs necessary to remedy the defect. The contractor

10-15  shall, before making the inspection, provide reasonable notice of the

10-16  inspection to all other parties and shall make the inspection at a reasonable

10-17  time. The contractor may take reasonable steps to establish the existence of

10-18  the defect.

10-19  2.  If a residence or appurtenance that is the subject of the claim is

10-20  covered by a homeowner’s warranty that is purchased by or on behalf of a

10-21  claimant pursuant to NRS 690B.100 to 690B.180, inclusive, a claimant

10-22  shall diligently pursue a claim under the contract.

10-23  3.  Within 10 days after the contractor receives the notice, the

10-24  contractor shall provide a copy of the notice of defects to each

10-25  subcontractor and each design professional who the contractor

10-26  reasonably believes performed the original construction or design work

10-27  which is alleged to be a constructional defect.

10-28  4.  During the 45 days after the contractor receives the notice from

10-29  the claimant, the contractor shall:

10-30  (a) Before conducting any inspection or test of the residence or

10-31  appurtenance, provide notice of the inspection or test in writing by

10-32  certified mail to each subcontractor and design professional to whom

10-33  notice was provided pursuant to subsection 3 of his last known address;

10-34  and

10-35  (b) Allow each subcontractor and design professional to whom notice

10-36  was provided pursuant to subsection 3 to jointly and severally conduct

10-37  any testing of the residence or appurtenance at the time the contractor is

10-38  allowed to conduct such testing.

10-39  5.  Within 60 days after the contractor receives the notice, the

10-40  contractor shall make a written response to the claimant. The response:

10-41  (a) Must be served to the claimant by certified mail, return receipt

10-42  requested, at the claimant’s last known address.

10-43  (b) Must respond to each constructional defect set forth in the

10-44  claimant’s notice, and describe in reasonable detail the cause of the defect,

10-45  if known, the nature and extent of the damage or injury resulting from the

10-46  defect, and, unless the response is limited to a proposal for monetary

10-47  compensation, the method, adequacy and estimated cost of any proposed

10-48  repair.

10-49  (c) May include:

11-1      (1) A proposal for monetary compensation, which may include a

11-2  contribution from a subcontractor.

11-3      (2) If the contractor or his subcontractor is licensed to make the

11-4  repairs, an agreement by the contractor or subcontractor to make the

11-5  repairs.

11-6      (3) An agreement by the contractor to cause the repairs to be made, at

11-7  the contractor’s expense, by another contractor who is licensed to make the

11-8  repairs, bonded and insured.

11-9  The repairs must be made within 45 days after the contractor receives

11-10  written notice of acceptance of the response, unless completion is delayed

11-11  by the claimant or by other events beyond the control of the contractor, or

11-12  timely completion of the repairs is not reasonably possible. The claimant

11-13  and the contractor may agree in writing to extend the periods prescribed by

11-14  this section.

11-15  [4.  Not later than 15 days before the mediation required pursuant to

11-16  NRS 40.680 and upon providing 15 days’ notice, each party shall provide

11-17  the other party, or shall make a reasonable effort to assist the other party to

11-18  obtain, all relevant reports, photos, correspondence, plans, specifications,

11-19  warranties, contracts, subcontracts, work orders for repair, videotapes,

11-20  technical reports, soil and other engineering reports and other documents or

11-21  materials relating to the claim that are not privileged.

11-22  5.] 6. If the claimant is a representative of a homeowner’s association,

11-23  the association shall submit any response made by the contractor to each

11-24  member of the association.

11-25  [6.  As used in this section, “subcontractor” means a contractor who

11-26  performs work on behalf of another contractor in the construction of a

11-27  residence or appurtenance.]

11-28  Sec. 28.  NRS 40.650 is hereby amended to read as follows:

11-29  40.650  1.  If a claimant unreasonably rejects a reasonable written

11-30  offer of settlement made as part of a response made pursuant to NRS

11-31  40.645 or 40.682 or does not permit the contractor or independent

11-32  contractor a reasonable opportunity to repair the defect pursuant to an

11-33  accepted offer of settlement and thereafter commences an action governed

11-34  by NRS 40.600 to 40.695, inclusive, and sections 19 to 23, inclusive, of

11-35  this act, and sections 2 to 12, inclusive, of this act, the court in which the

11-36  action is commenced may:

11-37  (a) Deny the claimant’s attorney’s fees and costs; and

11-38  (b) Award attorney’s fees and costs to the contractor.

11-39  Any sums paid under a homeowner’s warranty, other than sums paid in

11-40  satisfaction of claims that are collateral to any coverage issued to or by the

11-41  contractor, must be deducted from any recovery.

11-42  2.  If a contractor fails to:

11-43  (a) Make an offer of settlement;

11-44  (b) Make a good faith response to the claim asserting no liability; or

11-45  (c) Complete, in a good and workmanlike manner, the repairs specified

11-46  in an accepted offer , [;

11-47  (d) Agree to a mediator or accept the appointment of a mediator

11-48  pursuant to NRS 40.680 or subsection 4 of NRS 40.682; or

11-49  (e) Participate in mediation,]

12-1  the limitations on damages and defenses to liability provided in NRS

12-2  40.600 to 40.695, inclusive, and sections 19 to 23, inclusive, of this act,

12-3  and sections 2 to 12, inclusive, of this act do not apply . [and the claimant

12-4  may commence an action without satisfying any other requirement of NRS

12-5  40.600 to 40.695, inclusive.]

12-6    3.  If coverage under a homeowner’s warranty is denied by an insurer

12-7  in bad faith, the homeowner and the contractor have a right of action for

12-8  the sums that would have been paid if coverage had been provided, plus

12-9  reasonable attorney’s fees and costs.

12-10  Sec. 29.  NRS 40.655 is hereby amended to read as follows:

12-11  40.655  1.  Except as otherwise provided in NRS 40.650[,] and

12-12  section 9 of this act, in a claim governed by NRS 40.600 to 40.695,

12-13  inclusive, and sections 19 to 23, inclusive, of this act, and sections 2 to

12-14  12, inclusive, of this act, the claimant may recover only the following

12-15  damages to the extent proximately caused by a constructional defect:

12-16  (a) Any reasonable attorney’s fees;

12-17  (b) The reasonable cost of any repairs already made that were necessary

12-18  and of any repairs yet to be made that are necessary to cure any

12-19  constructional defect that the contractor failed to cure and the reasonable

12-20  expenses of temporary housing reasonably necessary during the repair;

12-21  (c) The reduction in market value of the residence or accessory

12-22  structure, if any, to the extent the reduction is because of structural failure;

12-23  (d) The loss of the use of all or any part of the residence;

12-24  (e) The reasonable value of any other property damaged by the

12-25  constructional defect;

12-26  (f) Any additional costs reasonably incurred by the claimant, including,

12-27  but not limited to, any costs and fees incurred for the retention of experts

12-28  to:

12-29     (1) Ascertain the nature and extent of the constructional defects;

12-30     (2) Evaluate appropriate corrective measures to estimate the value of

12-31  loss of use; and

12-32     (3) Estimate the value of loss of use, the cost of temporary housing

12-33  and the reduction of market value of the residence; and

12-34  (g) Any interest provided by statute.

12-35  2.  The amount of any attorney’s fees awarded pursuant to this section

12-36  must be approved by the court.

12-37  3.  If a contractor complies with the provisions of NRS 40.600 to

12-38  40.695, inclusive, and sections 19 to 23, inclusive, of this act, the claimant

12-39  may not recover from the contractor, as a result of the constructional

12-40  defect, anything other than that which is provided pursuant to NRS 40.600

12-41  to 40.695, inclusive[.] , and sections 19 to 23, inclusive, of this act.

12-42  4.  As used in this section, “structural failure” means physical damage

12-43  to the load-bearing portion of a residence or appurtenance caused by a

12-44  failure of the load-bearing portion of the residence or appurtenance.

12-45  Sec. 30.  NRS 40.668 is hereby amended to read as follows:

12-46  40.668  1.  Notwithstanding the provisions of NRS 40.600 to 40.695,

12-47  inclusive, and sections 19 to 23, inclusive, of this act, and sections 2 to

12-48  12, inclusive, of this act, a claimant may not commence an action against a

12-49  subdivider or master developer for a constructional defect in an

13-1  appurtenance constructed on behalf of the subdivider or master developer

13-2  in a planned unit development, to the extent that the appurtenance was

13-3  constructed by or through a licensed general contractor, unless:

13-4    (a) The subdivider or master developer fails to provide to the claimant

13-5  the name, address and telephone number of each contractor hired by the

13-6  subdivider or master developer to construct the appurtenance within 30

13-7  days of the receipt by the subdivider or master developer of a request from

13-8  the claimant for such information; or

13-9    (b) After the claimant has made a good faith effort to obtain full

13-10  recovery from the contractors hired by the subdivider or master developer

13-11  to construct the appurtenance, the claimant has not obtained a full

13-12  recovery.

13-13  2.  All statutes of limitation or repose applicable to a claim governed by

13-14  this section are tolled from the time the claimant notifies a contractor hired

13-15  by the subdivider or master developer of the claim until the earlier of the

13-16  date:

13-17  (a) A court determines that the claimant cannot obtain a full recovery

13-18  against those contractors; or

13-19  (b) The claimant receives notice that those contractors are bankrupt,

13-20  insolvent or dissolved.

13-21  Tolling pursuant to this subsection applies only to the subdivider or master

13-22  developer. Notwithstanding any applicable statute of limitation or repose,

13-23  the claimant may commence an action against the subdivider or master

13-24  developer for the claim within 1 year after the end of the tolling described

13-25  in this subsection.

13-26  3.  [Nothing in this section prohibits] This section does not prohibit the

13-27  commencement of an action against a subdivider or master developer for a

13-28  constructional defect in a residence sold, designed or constructed by or on

13-29  behalf of the subdivider or master developer.

13-30  4.  [Nothing in this section prohibits] This section does not prohibit a

13-31  person other than the claimant from commencing an action against a

13-32  subdivider or master developer to enforce his own rights.

13-33  5.  The provisions of this section do not apply to a subdivider or master

13-34  developer who acts as a general contractor or uses his license as a general

13-35  contractor in the course of constructing the appurtenance that is the subject

13-36  of the action.

13-37  6.  As used in this section:

13-38  (a) “Master developer” means a person who buys, sells or develops a

13-39  planned unit development, including, without limitation, a person who

13-40  enters into a development agreement pursuant to NRS 278.0201.

13-41  (b) “Planned unit development” has the meaning ascribed to it in NRS

13-42  278A.065.

13-43  (c) “Subdivider” has the meaning ascribed to it in NRS 278.0185.

13-44  Sec. 31.  NRS 40.675 is hereby amended to read as follows:

13-45  40.675  1.  A contractor or subcontractor who makes or provides for

13-46  repairs under NRS 40.600 to 40.695, inclusive, and sections 19 to 23,

13-47  inclusive, of this act, and sections 2 to 12, inclusive, of this act may take

13-48  reasonable steps to prove that the repairs were made and to have them

13-49  inspected.

14-1    2.  The provisions of NRS 40.600 to 40.695, inclusive, and sections 19

14-2  to 23, inclusive, of this act, and sections 2 to 12, inclusive, of this act

14-3  regarding inspection and repair are in addition to any rights of inspection

14-4  and settlement provided by common law or by another statute.

14-5    Sec. 32.  NRS 40.680 is hereby amended to read as follows:

14-6    40.680  1.  Except as otherwise provided in this chapter, before an

14-7  action based on a claim governed by NRS 40.600 to 40.695, inclusive, and

14-8  sections 19 to 23, inclusive, of this act, and sections 2 to 12, inclusive, of

14-9  this act may be commenced in court, the matter must be submitted to

14-10  [mediation, unless mediation is waived in writing by the contractor and the

14-11  claimant.

14-12  2.  The claimant and contractor must select a mediator by agreement. If

14-13  the claimant and contractor fail to agree upon a mediator within 45 days

14-14  after a mediator is first selected by the claimant, either party may petition

14-15  the American Arbitration Association, the Nevada Arbitration Association,

14-16  Nevada Dispute Resolution Services or any other mediation service

14-17  acceptable to the parties for the appointment of a mediator. A mediator so

14-18  appointed may discover only those documents or records which are

14-19  necessary to conduct the mediation. The mediator shall convene the

14-20  mediation within 60 days after the matter is submitted to him, unless the

14-21  parties agree to extend the time. Except in a complex matter, the claimant

14-22  shall, before the mediation begins, deposit $50 with the mediation service

14-23  and the contractor shall deposit with the mediation service the remaining

14-24  amount estimated by the mediation service as necessary to pay the fees and

14-25  expenses of the mediator for the first session of mediation, and the

14-26  contractor shall deposit additional amounts demanded by the mediation

14-27  service as incurred for that purpose. In a complex matter, each party shall

14-28  share equally in the deposits estimated by the mediation service. Unless

14-29  otherwise agreed, the total fees for each day of mediation and the mediator

14-30  must not exceed $750 per day.

14-31  3.  If the parties do not reach an agreement concerning the matter

14-32  during mediation or if the contractor fails to pay the required fees and

14-33  appear, the claimant may commence his action in court and:

14-34  (a) The reasonable costs and fees of the mediation are recoverable by

14-35  the prevailing party as costs of the action.

14-36  (b) Either party may petition the court in which the action is

14-37  commenced for the appointment of a special master.

14-38  4.  A special master appointed pursuant to subsection 3 may:

14-39  (a) Review all pleadings, papers or documents filed with the court

14-40  concerning the action.

14-41  (b) Coordinate the discovery of any books, records, papers or other

14-42  documents by the parties, including the disclosure of witnesses and the

14-43  taking of the deposition of any party.

14-44  (c) Order any inspections on the site of the property by a party and any

14-45  consultants or experts of a party.

14-46  (d) Order settlement conferences and attendance at those conferences by

14-47  any representative of the insurer of a party.

14-48  (e) Require any attorney representing a party to provide statements of

14-49  legal and factual issues concerning the action.

15-1    (f) Refer to the judge who appointed him or to the presiding judge of the

15-2  court in which the action is commenced any matter requiring assistance

15-3  from the court.

15-4  The special master shall not, unless otherwise agreed by the parties,

15-5  personally conduct any settlement conferences or engage in any ex parte

15-6  meetings regarding the action.

15-7    5.  Upon application by a party to the court in which the action is

15-8  commenced, any decision or other action taken by a special master

15-9  appointed pursuant to this section may be appealed to the court for a

15-10  decision.

15-11  6.  A report issued by a mediator or special master that indicates that

15-12  either party has failed to appear before him or to mediate in good faith is

15-13  admissible in the action, but a statement or admission made by either party

15-14  in the course of mediation is not admissible.] the state contractors’ board

15-15  for review pursuant to sections 2 to 12, inclusive, of this act within 30

15-16  days after the expiration of the time for the:

15-17  (a) Contractor to provide a written response to the claimant’s written

15-18  notice of defects pursuant to NRS 40.645 or 40.682, which response may

15-19  include, without limitation, an agreement of a subcontractor to repair or

15-20  to contribute to a proposal for monetary compensation pursuant to NRS

15-21  40.645 or 40.682;

15-22  (b) Claimant to accept an offer made as part of a written response by

15-23  the contractor or subcontractor to the claimant’s written notice of defects

15-24  pursuant to NRS 40.645 or 40.682, if such an offer is made; or

15-25  (c) Contractor or subcontractor to complete repairs made as part of a

15-26  written response by the contractor to the claimant’s written notice of

15-27  defects pursuant to NRS 40.645 or 40.682 that is accepted by the

15-28  claimant, including, without limitation, any extension of the period for

15-29  completing repairs which has been agreed to in writing by the claimant

15-30  and contractor,

15-31  whichever is later.

15-32  2.  Any action involving a constructional defect that is filed without

15-33  satisfying the requirements of NRS 40.600 to 40.695, inclusive, and

15-34  sections 19 to 23, inclusive, of this act, and sections 2 to 12, inclusive, of

15-35  this act must be dismissed without prejudice for failure to comply with

15-36  this section.

15-37  3.  After the state contractors’ board has issued an advisory opinion

15-38  concerning a claim of a constructional defect pursuant to the provisions

15-39  of section 7 of this act, a claimant may proceed to file an action based on

15-40  a claim governed by NRS 40.600 to 40.695, inclusive, and sections 19 to

15-41  23, inclusive, of this act, and sections 2 to 12, inclusive, of this act.

15-42  4.  A contractor who is served with a summons and complaint by a

15-43  claimant for a claim governed by the provisions of NRS 40.600 to 40.695,

15-44  inclusive, and sections 19 to 23, inclusive, of this act, and sections 2 to

15-45  12, inclusive, of this act and who files a third party complaint against a

15-46  subcontractor or design professional shall, not later than 60 days after

15-47  the date of service of the answer to the complaint, add any additional

15-48  parties to the third party complaint or file any third party complaint

15-49  against a subcontractor, design professional or additional party who may

16-1  be responsible for all or a portion of the constructional defects set forth

16-2  in the notice served pursuant to NRS 40.645 or 40.682, as applicable,

16-3  unless, upon a showing of diligent effort and good cause, the court

16-4  allows a later addition of such parties.

16-5    5.  The provisions of this section do not prohibit the parties to a claim

16-6  involving a constructional defect governed by NRS 40.600 to 40.695,

16-7  inclusive, and sections 19 to 23, inclusive, of this act, and sections 2 to

16-8  12, inclusive, of this act from voluntary agreeing in writing to submit a

16-9  matter to mediation.

16-10  Sec. 33.  NRS 40.682 is hereby amended to read as follows:

16-11  40.682  Except as otherwise provided in this section and NRS 40.670:

16-12  1.  [Notwithstanding the provisions of subsection 1 of NRS 40.680, a

16-13  claimant may commence an action in district court in a complex matter. If

16-14  the claimant commences an action in district court he shall:

16-15  (a) File and serve the summons and complaint as required by law; and

16-16  (b) At the same time and in the same manner as the claimant serves the

16-17  summons and complaint upon the contractor, serve upon the contractor]

16-18  For a claim that is a complex matter, before a claimant submits a claim

16-19  of a constructional defect to the state contractors’ board for review

16-20  pursuant to sections 2 to 12, inclusive, of this act and before a claimant

16-21  commences an action against a contractor for damages arising from a

16-22  constructional defect, the claimant must give a written notice by certified

16-23  mail, return receipt requested, to the contractor, at the contractor’s last

16-24  known address, specifying in reasonable detail, to the extent known, the

16-25  defects and any damages or injuries to each residence or appurtenance that

16-26  is the subject of the claim. The notice must describe in reasonable detail

16-27  each defect, the specific location of each defect, and the nature and extent

16-28  that is known of the damage or injury resulting from each defect. If an

16-29  expert opinion has been rendered concerning the existence or extent of the

16-30  defects, a written copy of the opinion must accompany the notice. An

16-31  expert opinion that specifies each defect to the extent known, the specific

16-32  location of each defect to the extent known, and the nature and extent that

16-33  is known of the damage or injury resulting from each defect, based on a

16-34  valid and reliable representative sample of the residences and

16-35  appurtenances involved in the action, satisfies the requirements of this

16-36  section.

16-37  2.  [The contractor shall file and serve an answer to the complaint as

16-38  required by law.

16-39  3.  Not later than 30 days after the date of service of the answer to the

16-40  complaint, the contractor and claimant shall meet to establish a schedule

16-41  for:

16-42  (a) The exchange of or reasonable access for the other party to all

16-43  relevant reports, photos, correspondence, plans, specifications, warranties,

16-44  contracts, subcontracts, work orders for repair, videotapes, technical

16-45  reports, soil and other engineering reports and other documents or

16-46  materials relating to the claim that are not privileged;

16-47  (b) The inspection of] Within 10 days after the contractor receives the

16-48  notice, the contractor shall provide a copy of the notice of defects to each

16-49  subcontractor and each design professional who the contractor

17-1  reasonably believes performed the original construction or design work

17-2  which is alleged to be a constructional defect.

17-3    3.  During the 60 days after the contractor receives the notice, on his

17-4  written request, the contractor may:

17-5    (a) Inspect the residence or appurtenance that is the subject of the
claim to evaluate the defects set forth in the notice served pursuant to

17-6  subsection 1; and

17-7    [(c) The conduct of]

17-8    (b) Conduct any tests that are reasonably necessary to determine the

17-9  nature and cause of a defect or any damage or injury, and the nature and

17-10  extent of repairs necessary to remedy a defect or any damage or injury. The

17-11  party conducting the test shall provide reasonable notice of the test to all

17-12  other parties and conduct the test at a reasonable time.

17-13  4.  [At the meeting held pursuant to subsection 3, the claimant and

17-14  contractor shall:

17-15  (a) Establish a schedule for the addition of any additional parties to the

17-16  complaint or to file any third-party complaint against an additional party

17-17  who may be responsible for all or a portion of the defects set forth in the

17-18  notice served pursuant to subsection 1;

17-19  (b) Unless the claimant and contractor agree otherwise in writing, select

17-20  a mediator and proceed with mediation as provided in subsections 2 to 6,

17-21  inclusive, of NRS 40.680; and

17-22  (c) If the claimant and contractor agree, select a special master and

17-23  jointly petition the court for his appointment pursuant to subsection 7.

17-24  5.  Each party added to the complaint or against whom a third-party

17-25  complaint is filed pursuant to subsection 4 shall file and serve an answer as

17-26  required by law.

17-27  6.  If the claimant or contractor adds a party to the complaint or files a

17-28  third-party complaint, then not later than 60 days after the date determined

17-29  pursuant to paragraph (a) of subsection 4, the contractor, claimant and each

17-30  party added to the complaint or against whom a third-party complaint is

17-31  filed shall meet to establish a schedule for the activities set forth in

17-32  paragraphs (a), (b) and (c) of subsection 3.

17-33  7.  If a special master has not been appointed, the contractor, claimant

17-34  or a party added to the complaint or against whom a third-party complaint

17-35  is filed may petition the court for the appointment of a special master at

17-36  any time after the meeting held pursuant to subsection 3. The special

17-37  master may:

17-38  (a) Take any action set forth in subsection 4 of NRS 40.680;

17-39  (b) Exercise any power set forth in Rule 53 of the Nevada Rules of Civil

17-40  Procedure; and

17-41  (c) Subject to the provisions of NRS 40.680, if the parties fail to

17-42  establish a schedule or determine a date as required in subsection 3, 4 or 6,

17-43  establish the schedule or determine the date.

17-44  8.  Unless the mediation required pursuant to paragraph (b) of

17-45  subsection 4 is completed or the contractor and claimant have agreed in

17-46  writing not to mediate the claim pursuant to paragraph (b) of subsection 4,

17-47  a party shall not propound interrogatories or requests for admission, take a

17-48  deposition or file a motion that is dispositive of the action except:

18-1    (a) Upon agreement of the parties; or

18-2    (b) With the prior approval of the court or special master.

18-3    9.] During the 60 days after the contractor receives the notice from

18-4  the claimant, the contractor shall:

18-5    (a) Before conducting any inspection or test of the residence or

18-6  appurtenance, provide notice of the inspection or test in writing by

18-7  certified mail to each subcontractor and design professional to whom

18-8  notice was provided pursuant to subsection 2 at his last known address;

18-9  and

18-10  (b) Allow each subcontractor and design professional to whom notice

18-11  was provided pursuant to subsection 2 to jointly and severally conduct

18-12  any testing of the residence or appurtenance at the time the contractor is

18-13  allowed to conduct such testing.

18-14  5. If a residence or appurtenance that is the subject of the claim is

18-15  covered by a homeowner’s warranty that is purchased by or on behalf of a

18-16  claimant pursuant to NRS 690B.100 to 690B.180, inclusive, a claimant

18-17  shall diligently pursue a claim under the contract.

18-18  [10.  Unless the parties agree otherwise, not less than 60 days before

18-19  the date of the mediation pursuant to paragraph (b) of subsection 4 is

18-20  convened,]

18-21  6.  Within 90 days after the contractor receives the notice, the

18-22  contractor shall make a written response to the claimant that meets the

18-23  requirements set forth in subsection [3] 5 of NRS 40.645.

18-24  [11.] 7. If the claimant is a representative of a homeowner’s

18-25  association, the association shall submit any response made by the

18-26  contractor to each member of the association in writing not more than 30

18-27  days after the date the claimant receives the response.

18-28  [12.] 8. The claimant shall respond to the written response of the

18-29  contractor within 45 days after the response of the contractor is mailed to

18-30  the claimant.

18-31  9.  If a claimant accepts an offer to repair made as a part of a written

18-32  response of a contractor or subcontractor pursuant to this section, the

18-33  contractor or subcontractor, as applicable, shall complete the repairs or

18-34  cause the repairs to be completed within 90 days after the contractor

18-35  receives written notice of acceptance of the response, unless completion

18-36  is delayed by the claimant or by other events beyond the control of the

18-37  contractor or subcontractor, or timely completion of the repairs is not

18-38  reasonably possible. The claimant and the contractor may agree in

18-39  writing to extend the periods prescribed by this section.

18-40  Sec. 34.  NRS 40.688 is hereby amended to read as follows:

18-41  40.688  1.  If a claimant attempts to sell a residence that is or has been

18-42  the subject of a claim governed by NRS 40.600 to 40.695, inclusive, and

18-43  sections 19 to 23, inclusive, of this act, and sections 2 to 12, inclusive, of

18-44  this act, he shall disclose, in writing, to any prospective purchaser of the

18-45  residence, not less than 30 days before the close of escrow for the sale of

18-46  the residence or, if escrow is to close less than 30 days after the execution

18-47  of the sales agreement, then immediately upon the execution of the sales

18-48  agreement or, if a claim is initiated less than 30 days before the close of

19-1  escrow, within 24 hours after giving written notice to the contractor

19-2  pursuant to subsection 1 of NRS 40.645 or subsection 1 of NRS 40.682:

19-3    (a) All notices given by the claimant to the contractor pursuant to NRS

19-4  40.600 to 40.695, inclusive, and sections 19 to 23, inclusive, of this act,

19-5  and sections 2 to 12, inclusive, of this act that are related to the residence;

19-6    (b) All opinions the claimant has obtained from experts regarding a

19-7  constructional defect that is or has been the subject of the claim;

19-8    (c) The terms of any settlement, order or judgment relating to the claim;

19-9  and

19-10  (d) A detailed report of all repairs made to the residence by or on behalf

19-11  of the claimant as a result of a constructional defect that is or has been the

19-12  subject of the claim.

19-13  2.  Before taking any action on a claim pursuant to NRS 40.600 to

19-14  40.695, inclusive, and sections 19 to 23, inclusive, of this act, and

19-15  sections 2 to 12, inclusive, of this act, the attorney for a claimant shall

19-16  notify the claimant in writing of the provisions of this section.

19-17  Sec. 35.  NRS 40.689 is hereby amended to read as follows:

19-18  40.689  1.  Upon petition by a party:

19-19  (a) The court shall give preference in setting a date for the trial of an

19-20  action commenced pursuant to NRS 40.600 to 40.695, inclusive[;] , and

19-21  sections 19 to 23, inclusive, of this act, and sections 2 to 12, inclusive, of

19-22  this act; and

19-23  (b) The court may assign an action commenced pursuant to NRS 40.600

19-24  to 40.695, inclusive, and sections 19 to 23, inclusive, of this act, and

19-25  sections 2 to 12, inclusive, of this act to a senior judge.

19-26  2.  If the action is assigned to a senior judge upon petition by a party:

19-27  (a) Any additional expenses caused by the assignment must be borne

19-28  equally by each party involved; or

19-29  (b) The judge may distribute any additional expenses among the parties

19-30  as he deems appropriate.

19-31  Sec. 36.  NRS 40.690 is hereby amended to read as follows:

19-32  40.690  1.  A claim governed by NRS 40.600 to 40.695, inclusive,

19-33  and sections 19 to 23, inclusive, of this act, and sections 2 to 12,

19-34  inclusive, of this act may not be brought by a claimant or contractor

19-35  against a government, governmental agency or political subdivision of a

19-36  government[,] during the period in which a claim for a constructional

19-37  defect is being settled[, mediated] or otherwise resolved pursuant to NRS

19-38  40.600 to 40.695, inclusive[.] , and sections 19 to 23, inclusive, of this

19-39  act, and sections 2 to 12, inclusive, of this act. The settlement of such a

19-40  claim does not affect the rights or obligations of the claimant or contractor

19-41  in any action brought by the claimant or contractor against a third party.

19-42  2.  A contractor or claimant may require a party against whom the

19-43  contractor or claimant asserts a claim governed by NRS 40.600 to 40.695,

19-44  inclusive, and sections 19 to 23, inclusive, of this act, and sections 2 to

19-45  12, inclusive, of this act to appear and participate in proceedings held

19-46  pursuant to those sections as if the party were a contractor and the party

19-47  requiring him to appear were a claimant. The party must receive notice of

19-48  the proceedings from the contractor or claimant.

 

20-1    Sec. 37.  NRS 40.692 is hereby amended to read as follows:

20-2    40.692  If, after complying with the procedural requirements of NRS

20-3  [40.645 and 40.680, or NRS 40.682,] 40.600 to 40.695, inclusive, and

20-4  sections 19 to 23, inclusive, of this act, and sections 2 to 12, inclusive, of

20-5  this act, a claimant proceeds with an action for damages arising from a

20-6  constructional defect:

20-7    1.  The claimant and each contractor who is named in the original

20-8  complaint when the action is commenced are not required, while the action

20-9  is pending, to comply with the requirements of NRS [40.645 or 40.680, or

20-10  NRS 40.682,] 40.600 to 40.695, inclusive, and sections 19 to 23, inclusive,

20-11  of this act, and sections 2 to 12, inclusive, of this act for any

20-12  constructional defect that the claimant includes in an amended complaint,

20-13  if the constructional defect:

20-14  (a) Is attributable, in whole or in part, to such a contractor;

20-15  (b) Is located on the same property described in the original complaint;

20-16  and

20-17  (c) Was not discovered before the action was commenced provided that

20-18  a good faith effort had been undertaken by the claimant.

20-19  2.  The claimant is not required to give written notice of a defect

20-20  pursuant to subsection 1 of NRS 40.645 or subsection 1 of NRS 40.682 to

20-21  any person who is joined to or intervenes in the action as a party after it is

20-22  commenced. If such a person becomes a party to the action:

20-23  (a) For the purposes of subsection 1 of NRS 40.645 or subsection 1 of

20-24  NRS 40.682, the person shall be deemed to have been given notice of the

20-25  defect by the claimant on the date on which the person becomes a party to

20-26  the action; and

20-27  (b) The provisions of NRS 40.600 to 40.695, inclusive, and sections 19

20-28  to 23, inclusive, of this act, and sections 2 to 12, inclusive, of this act

20-29  apply to the person after that date.

20-30  Sec. 38.  NRS 40.695 is hereby amended to read as follows:

20-31  40.695  1.  Except as otherwise provided in subsection 2, statutes of

20-32  limitation or repose applicable to a claim based on a constructional defect

20-33  governed by NRS 40.600 to 40.695, inclusive, and sections 19 to 23,

20-34  inclusive, of this act, and sections 2 to 12, inclusive, of this act are tolled

20-35  from the time notice of the claim is given, until [30] :

20-36  (a) Thirty days after [mediation is concluded or waived in writing

20-37  pursuant to NRS 40.680 or subsection 4 of NRS 40.682.] an advisory

20-38  opinion is rendered by the state contractors’ board pursuant to sections 2

20-39  to 12, inclusive, of this act; or

20-40  (b) If the state contractors’ board issues an order requiring a

20-41  contractor to repair a constructional defect pursuant to section 9 of this

20-42  act, 45 days after the expiration of the time provided by the board for the

20-43  completion of repairs,

20-44  whichever is later.

20-45  2.  Tolling under this section applies[:

20-46  (a) Only to a claim that is not a complex matter.

20-47  (b) To] to a third party regardless of whether the party is required to

20-48  appear in the proceeding.

 

21-1    Sec. 39.  NRS 113.135 is hereby amended to read as follows:

21-2    113.135  1.  Upon signing a sales agreement with the initial purchaser

21-3  of residential property that was not occupied by the purchaser for more

21-4  than 120 days after substantial completion of the construction of the

21-5  residential property, the seller shall:

21-6    (a) Provide to the initial purchaser a copy of NRS 11.202 to 11.206,

21-7  inclusive, and 40.600 to 40.695, inclusive[;] , and sections 19 to 23,

21-8  inclusive, of this act, and sections 2 to 12, inclusive, of this act;

21-9    (b) Notify the initial purchaser of any soil report prepared for the

21-10  residential property or for the subdivision in which the residential property

21-11  is located; and

21-12  (c) If requested in writing by the initial purchaser not later than 5 days

21-13  after signing the sales agreement, provide to the purchaser , without cost ,

21-14  each report described in paragraph (b) not later than 5 days after the seller

21-15  receives the written request.

21-16  2.  Not later than 20 days after receipt of all reports pursuant to

21-17  paragraph (c) of subsection 1, the initial purchaser may rescind the sales

21-18  agreement.

21-19  3.  The initial purchaser may waive his right to rescind the sales

21-20  agreement pursuant to subsection 2. Such a waiver is effective only if it is

21-21  made in a written document that is signed by the purchaser.

21-22  Sec. 40.  Chapter 116 of NRS is hereby amended by adding thereto a

21-23  new section to read as follows:

21-24  1.  A person shall not provide or offer to provide anything of value to

21-25  a property manager of an association or to a member or officer of an

21-26  executive board of an association to induce the property manager,

21-27  member or officer to encourage the association to file a claim for

21-28  damages arising from a constructional defect.

21-29  2.  A property manager shall not accept anything of value given to

21-30  him in exchange for encouraging the association that he manages to file

21-31  a claim for damages arising from a constructional defect.

21-32  3.  A member or officer of an executive board shall not accept

21-33  anything of value given to him in exchange for encouraging the

21-34  association of which he is a member or officer of the executive board to

21-35  file a claim for damages arising from a constructional defect.

21-36  4.  If a property manager violates the provisions of this section:

21-37  (a) The real estate division of the department of business and industry

21-38  shall suspend or revoke his permit to engage in property management

21-39  issued pursuant to chapter 645 of NRS, if he has been issued such a

21-40  permit; and

21-41  (b) The real estate commission shall suspend or revoke his certificate

21-42  issued pursuant to NRS 116.31139, if he has been issued such a

21-43  certificate.

21-44  5.  If a member or officer of an executive board violates the

21-45  provisions of this section, the executive board shall remove the officer or

21-46  member from the board.

21-47  6.  Any person who willfully violates the provisions of this section is

21-48  guilty of a misdemeanor.

22-1    7.  As used in this section, “constructional defect” has the meaning

22-2  ascribed to it in NRS 40.615.

22-3    Sec. 41.  NRS 116.1203 is hereby amended to read as follows:

22-4    116.1203  1.  Except as otherwise provided in subsection 2, if a

22-5  planned community contains no more than 12 units and is not subject to

22-6  any developmental rights, it is subject only to NRS 116.1105, 116.1106

22-7  and 116.1107 unless the declaration provides that this entire chapter is

22-8  applicable.

22-9    2.  Except for NRS 116.3104, 116.31043, 116.31046 and 116.31138,

22-10  NRS 116.3101 to 116.3119, inclusive, and section 40 of this act and

22-11  116.110305 to 116.110393, inclusive, to the extent necessary in construing

22-12  any of those sections, apply to a residential planned community containing

22-13  more than six units.

22-14  Sec. 42.  NRS 116.311 is hereby amended to read as follows:

22-15  116.311  1.  If only one of several owners of a unit is present at a

22-16  meeting of the association, that owner is entitled to cast all the votes

22-17  allocated to that unit. If more than one of the owners are present, the votes

22-18  allocated to that unit may be cast only in accordance with the agreement of

22-19  a majority in interest of the owners, unless the declaration expressly

22-20  provides otherwise. There is majority agreement if any one of the owners

22-21  cast the votes allocated to that unit without protest made promptly to the

22-22  person presiding over the meeting by any of the other owners of the unit.

22-23  2.  Except as otherwise provided in this section, votes allocated to a

22-24  unit may be cast pursuant to a proxy executed by a unit’s owner. A unit’s

22-25  owner may give a proxy only to a member of his immediate family, a

22-26  tenant of the unit’s owner who resides in the common-interest community

22-27  or another unit’s owner who resides in the common-interest community. If

22-28  a unit is owned by more than one person, each owner of the unit may vote

22-29  or register protest to the casting of votes by the other owners of the unit

22-30  through an executed proxy. A unit’s owner may revoke a proxy given

22-31  pursuant to this section only by actual notice of revocation to the person

22-32  presiding over a meeting of the association. A proxy is void if:

22-33  (a) It is not dated or purports to be revocable without notice;

22-34  (b) It does not designate the votes that must be cast on behalf of the

22-35  unit’s owner who executed the proxy; or

22-36  (c) The holder of the proxy does not disclose at the beginning of the

22-37  meeting for which the proxy is executed the number of proxies pursuant to

22-38  which he will be casting votes and the voting instructions received for each

22-39  proxy.

22-40  A proxy terminates immediately after the conclusion of the meeting for

22-41  which it was executed. A vote may not be cast pursuant to a proxy for the

22-42  election of a member of the executive board of an association[.] or for the

22-43  ratification of an action pursuant to paragraph (e) of subsection 9 of

22-44  NRS 116.3115.

22-45  3.  Only a vote cast in person, by secret ballot or by proxy, may be

22-46  counted.

22-47  4.  If the declaration requires that votes on specified matters affecting

22-48  the common-interest community be cast by lessees rather than units’

22-49  owners of leased units:

23-1    (a) The provisions of subsections 1 and 2 apply to lessees as if they

23-2  were units’ owners;

23-3    (b) Units’ owners who have leased their units to other persons may not

23-4  cast votes on those specified matters; and

23-5    (c) Lessees are entitled to notice of meetings, access to records, and

23-6  other rights respecting those matters as if they were units’ owners.

23-7  Units’ owners must also be given notice, in the manner provided in NRS

23-8  116.3108, of all meetings at which lessees are entitled to vote.

23-9    5.  No votes allocated to a unit owned by the association may be cast.

23-10  6.  Votes cast for the election of a member of the executive board of an

23-11  association must be counted in public.

23-12  Sec. 43.  NRS 116.31139 is hereby amended to read as follows:

23-13  116.31139  1.  An association may employ a person engaged in

23-14  property management for the common-interest community.

23-15  2.  Except as otherwise provided in this section, a person engaged in

23-16  property management for a common-interest community must:

23-17  (a) Hold a permit to engage in property management that is issued

23-18  pursuant to the provisions of chapter 645 of NRS; or

23-19  (b) Hold a certificate issued by the real estate commission pursuant to

23-20  subsection 3.

23-21  3.  The real estate commission shall provide by regulation for the

23-22  issuance of certificates for the management of common-interest

23-23  communities to persons who are not otherwise authorized to engage in

23-24  property management pursuant to the provisions of chapter 645 of NRS.

23-25  The regulations:

23-26  (a) Must establish the qualifications for the issuance of such a

23-27  certificate, including the education and experience required to obtain such

23-28  a certificate;

23-29  (b) May require applicants to pass an examination in order to obtain a

23-30  certificate;

23-31  (c) Must establish standards of practice for persons engaged in property

23-32  management for a common-interest community;

23-33  (d) Must establish the grounds for initiating disciplinary action against a

23-34  person to whom a certificate has been issued, including, without limitation,

23-35  the grounds for placing conditions, limitations or restrictions on a

23-36  certificate and for the suspension or revocation of a certificate; and

23-37  (e) Must establish rules of practice and procedure for conducting

23-38  disciplinary hearings.

23-39  The real estate division of the department of business and industry may

23-40  investigate the property managers to whom certificates have been issued to

23-41  ensure their compliance with section 40 of this act and the standards of

23-42  practice adopted pursuant to this subsection and collect a fee for the

23-43  issuance of a certificate by the commission in an amount not to exceed the

23-44  administrative costs of issuing the certificate.

23-45  4.  The provisions of subsection 2 do not apply to:

23-46  (a) A person who is engaged in property management for a common-

23-47  interest community on October 1, 1999, and is granted an exemption from

23-48  the requirements of subsection 2 by the administrator upon demonstration

24-1  that he is qualified and competent to engage in property management for a

24-2  common-interest community.

24-3    (b) A financial institution.

24-4    (c) An attorney licensed to practice in this state.

24-5    (d) A trustee.

24-6    (e) An employee of a corporation who manages only the property of the

24-7  corporation.

24-8    (f) A declarant.

24-9    (g) A receiver.

24-10  5.  As used in this section, “property management” means the physical,

24-11  administrative or financial maintenance and management of real property,

24-12  or the supervision of those activities for a fee, commission or other

24-13  compensation or valuable consideration.

24-14  Sec. 44.  NRS 116.3115 is hereby amended to read as follows:

24-15  116.3115  1.  Until the association makes an assessment for common

24-16  expenses, the declarant shall pay all common expenses. After an

24-17  assessment has been made by the association, assessments must be made at

24-18  least annually, based on a budget adopted at least annually by the

24-19  association in accordance with the requirements set forth in NRS

24-20  116.31151. Except for an association for a time-share project governed by

24-21  the provisions of chapter 119A of NRS, and unless the declaration imposes

24-22  more stringent standards, the budget must include a budget for the daily

24-23  operation of the association and the money for the reserve required by

24-24  paragraph (b) of subsection 2.

24-25  2.  Except for assessments under subsections 4 to 7, inclusive:

24-26  (a) All common expenses, including a reserve, must be assessed against

24-27  all the units in accordance with the allocations set forth in the declaration

24-28  pursuant to subsections 1 and 2 of NRS 116.2107.

24-29  (b) The association shall establish an adequate reserve, funded on a

24-30  reasonable basis, for the repair, replacement and restoration of the major

24-31  components of the common elements. The reserve may be used only for

24-32  those purposes, including, without limitation, repairing, replacing and

24-33  restoring roofs, roads and sidewalks, and must not be used for daily

24-34  maintenance.

24-35  3.  Any past due assessment for common expenses or installment

24-36  thereof bears interest at the rate established by the association not

24-37  exceeding 18 percent per year.

24-38  4.  To the extent required by the declaration:

24-39  (a) Any common expense associated with the maintenance, repair,

24-40  restoration or replacement of a limited common element must be assessed

24-41  against the units to which that limited common element is assigned,

24-42  equally, or in any other proportion the declaration provides;

24-43  (b) Any common expense or portion thereof benefiting fewer than all of

24-44  the units must be assessed exclusively against the units benefited; and

24-45  (c) The costs of insurance must be assessed in proportion to risk and the

24-46  costs of utilities must be assessed in proportion to usage.

24-47  5.  Assessments to pay a judgment against the association may be made

24-48  only against the units in the common-interest community at the time the

25-1  judgment was entered, in proportion to their liabilities for common

25-2  expenses.

25-3    6.  If any common expense is caused by the misconduct of any unit’s

25-4  owner, the association may assess that expense exclusively against his unit.

25-5    7.  The association of a common-interest community created before

25-6  January 1, 1992, is not required to make an assessment against a vacant lot

25-7  located within the community that is owned by the declarant.

25-8    8.  If liabilities for common expenses are reallocated, assessments for

25-9  common expenses and any installment thereof not yet due must be

25-10  recalculated in accordance with the reallocated liabilities.

25-11  9.  The association shall provide written notice by certified mail, return

25-12  receipt requested, to the owner of each unit of a meeting at which an

25-13  assessment for a capital improvement or the commencement of a civil

25-14  action is to be considered or action is to be taken on such an assessment at

25-15  least 21 calendar days before the meeting. Except as otherwise provided in

25-16  this subsection, the association may commence a civil action only upon a

25-17  vote [or written agreement] of the owners of units to which at least a

25-18  majority of the votes of the members of the association are allocated[.] ,

25-19  taken at a scheduled meeting. The provisions of this subsection do not

25-20  apply to a civil action that is commenced:

25-21  (a) By an association for a time-share project governed by the

25-22  provisions of chapter 119A of NRS;

25-23  (b) To enforce the payment of an assessment;

25-24  (c) To enforce the declaration, bylaws or rules of the association;

25-25  (d) To proceed with a counterclaim; or

25-26  (e) To protect the health, safety and welfare of the members of the

25-27  association[.] from an imminent risk of loss of life or serious and

25-28  permanent damage to property. If a civil action is commenced pursuant to

25-29  this paragraph without the required vote or agreement, the action must be

25-30  ratified within [90] 30 days after the commencement of the action [by]

25-31  upon a vote [or written agreement] of the owners of the units to which at

25-32  least a majority of votes of the members of the association are allocated. If

25-33  the [association, after making a good faith effort, cannot obtain the

25-34  required vote or agreement to commence or ratify such a civil action,]

25-35  action is not so ratified, the association [may thereafter seek] shall file a

25-36  special motion to dismiss the action and the court shall dismiss the action

25-37  without prejudice for [that reason only if a vote or written agreement of the

25-38  owners of the units to which at least a majority of votes of the members of

25-39  the association are allocated was obtained at the time the approval to

25-40  commence or ratify the action was sought.] failure to comply with this

25-41  paragraph.

25-42  10.  At least 10 days before an association commences or seeks to

25-43  ratify the commencement of a civil action, the association shall provide a

25-44  written statement by certified mail, return receipt requested, to all units’

25-45  owners that includes:

25-46  (a) A reasonable estimate of the costs of the civil action, including ,

25-47  without limitation, reasonable attorney’s fees[;] and fees for experts and

25-48  other witnesses;

26-1    (b) An explanation that the costs and fees required to be paid in

26-2  connection with the civil action will be paid before the units’ owners

26-3  receive money as a result of the civil action, and an explanation that the

26-4  amount of money paid for such costs and fees may be greater than the

26-5  amount of money available to compensate the units’ owners;

26-6    (c) An explanation of the potential benefits of the civil action and the

26-7  potential adverse consequences if the association does not commence the

26-8  action or if the outcome of the action is not favorable to the association;

26-9  and

26-10  [(c)] (d) All disclosures that are required to be made upon the sale of

26-11  the property.

26-12  11.  No person other than a unit’s owner may request the dismissal of a

26-13  civil action commenced by the association on the ground that the

26-14  association failed to comply with any provision of this section.

26-15  Sec. 45.  NRS 119A.165 is hereby amended to read as follows:

26-16  119A.165  1.  If a matter governed by this chapter is also governed by

26-17  chapter 116 of NRS, compliance with the provisions of chapter 116 of

26-18  NRS governing the matter which are in addition to or different from the

26-19  provisions in this chapter governing the same matter is not required. In the

26-20  event of a conflict between provisions of this chapter and chapter 116 of

26-21  NRS, the provisions of this chapter prevail.

26-22  2.  Without limiting the generality of subsection 1, the provisions of

26-23  NRS 116.11145, 116.12065, 116.3103, 116.31031, 116.31034, 116.3106,

26-24  116.31065, 116.3108 to 116.311, inclusive, 116.31139, 116.31145 to

26-25  116.31158, inclusive, 116.31162, 116.31175, 116.31177, 116.41095 and

26-26  116.4117 and section 40 of this act do not apply to a time share or a time-

26-27  share project.

26-28  Sec. 46.  The amendatory provisions of this act do not apply to a claim

26-29  initiated or an action commenced pursuant to NRS 40.600 to 40.695,

26-30  inclusive, before October 1, 2001.

26-31  Sec. 47.  The amendatory provisions of section 40 of this act do not

26-32  apply to offenses committed before October 1, 2001.

 

26-33  H