Senate Bill No. 241–Committee on Commerce and Labor

 

March 6, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes to provisions governing certain claims for constructional defects. (BDR 3‑156)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

~

 

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

 

AN ACT relating to real property; making various changes to provisions governing certain claims for constructional defects; establishing certain rights, remedies and procedures governing certain claims for constructional defects; revising and recodifying various provisions governing certain claims for constructional defects; 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. Title 3 of NRS is hereby amended by adding

1-2  thereto a new chapter to consist of the provisions set forth as

1-3  sections 2 to 53, inclusive, of this act.

1-4  Sec. 2.  As used in this chapter, unless the context otherwise

1-5  requires, the words and terms defined in sections 3 to 21,

1-6  inclusive, of this act have the meanings ascribed to them in those

1-7  sections.

1-8  Sec. 3.  “Amend a complaint to add a cause of action for a

1-9  constructional defect” means any act by which a claimant seeks

1-10  to:

1-11      1.  Add to the pleadings a constructional defect that is not

1-12  otherwise included in the pleadings; or

2-1  2.  Amend the pleadings in such a manner that the practical

2-2  effect is the addition of a constructional defect that is not

2-3  otherwise included in the pleadings.

2-4  Sec. 4.  1.  “Appurtenance” means any structure,

2-5  installation, facility, amenity or other improvement which is

2-6  appurtenant to or benefits one or more residences but which is not

2-7  a part of the dwelling unit.

2-8  2.  The term includes, without limitation, the parcel of real

2-9  property, recreational facilities, golf courses, walls, sidewalks,

2-10  driveways, landscaping, common elements and limited common

2-11  elements other than those described in NRS 116.2102, and other

2-12  structures, installations, facilities, amenities and improvements

2-13  associated with or benefiting one or more residences.

2-14      Sec. 5.  “Building inspector” means an inspector who is

2-15  employed by a governmental entity and who has the authority to

2-16  approve or certify any construction project.

2-17      Sec. 6.  “Cause of action for a constructional defect” means a

2-18  claim brought by a claimant in a court of competent jurisdiction in

2-19  which the claimant alleges that one or more contractors,

2-20  subcontractors, suppliers, design professionals or other persons

2-21  are liable for damages arising from a constructional defect.

2-22      Sec. 7.  “Claimant” means:

2-23      1.  An owner of a residence or appurtenance;

2-24      2.  A representative of a homeowners’ association that is

2-25  responsible for a residence or appurtenance if the representative is

2-26  acting within the scope of his authority under the law and the

2-27  governing documents for the homeowners’ association; or

2-28      3.  Each member of a class action who has complied with the

2-29  notice provisions of section 27 of this act.

2-30      Sec. 8.  “Common elements” has the meaning ascribed to it

2-31  in NRS 116.110318.

2-32      Sec. 9.  “Construction project” means any design,

2-33  development, construction, manufacturing, alteration,

2-34  improvement, repair or landscaping involving a residence or

2-35  appurtenance, or any part thereof.

2-36      Sec. 10.  1.  “Constructional defect” means a defect in the

2-37  design, construction, manufacturing, alteration, improvement,

2-38  repair or landscaping of:

2-39      (a) A new residence or a new appurtenance; or

2-40      (b) An existing residence or an existing appurtenance, when

2-41  the existing residence or existing appurtenance is changed,

2-42  altered, added to or improved by a construction project.

2-43      2.  The term includes physical damage to the residence, an

2-44  appurtenance or the real property to which the residence or

3-1  appurtenance is affixed that is proximately caused by a

3-2  constructional defect.

3-3  3.  The term does not include:

3-4  (a) Any design, construction, manufacturing, alteration,

3-5  improvement, repair or landscaping for which a contractor,

3-6  subcontractor, supplier or design professional cannot be held

3-7  liable pursuant to section 24 of this act; or

3-8  (b) Any act, omission, condition or damage for which a

3-9  contractor, subcontractor, supplier or design professional cannot

3-10  be held liable pursuant to section 25 of this act.

3-11      Sec. 11.  “Contractor” means a person who, with or without a

3-12  license issued pursuant to chapter 624 of NRS, by himself or

3-13  through his agents, employees or subcontractors:

3-14      1.  Develops, designs, constructs, manufactures, alters,

3-15  improves, repairs or landscapes a residence, appurtenance or any

3-16  part thereof;

3-17      2.  Develops a site for a residence, appurtenance or any part

3-18  thereof; or

3-19      3.  Sells a residence or appurtenance, any part of which the

3-20  person, by himself or through his agents, employees or

3-21  subcontractors, has developed, designed, constructed,

3-22  manufactured, altered, improved, repaired or landscaped.

3-23      Sec. 12.  “Contractor for the construction project” means,

3-24  with regard to any construction project:

3-25      1.  The contractor who is the general contractor for the

3-26  construction project; or

3-27      2.  In the absence of a general contractor for the construction

3-28  project, the contractor who is the primary contractor for the

3-29  construction project or who is responsible for the work performed

3-30  on the construction project.

3-31      Sec. 13.  “Design professional” means:

3-32      1.  A person who holds a professional license or certificate

3-33  issued pursuant to chapter 623, 623A or 625 of NRS and who

3-34  provides professional services with regard to any construction

3-35  project; or

3-36      2.  A person who is primarily engaged in the practice of

3-37  professional engineering, land surveying, architecture or

3-38  landscape architecture and who provides professional services

3-39  with regard to any construction project.

3-40      Sec. 14.  1.  “Homeowner’s warranty” means a warranty or

3-41  policy of insurance:

3-42      (a) Issued or purchased by or on behalf of a contractor,

3-43  subcontractor, supplier or design professional for the protection of

3-44  a claimant; or

4-1  (b) Purchased by or on behalf of a claimant pursuant to NRS

4-2  690B.100 to 690B.180, inclusive.

4-3  2.  The term includes a warranty contract issued by a risk

4-4  retention group that operates in compliance with chapter 695E of

4-5  NRS and insures all or any part of the liability of a contractor,

4-6  subcontractor, supplier or design professional for the cost to

4-7  repair a constructional defect.

4-8  Sec. 15.  “Limited common element” has the meaning

4-9  ascribed to it in NRS 116.110355.

4-10      Sec. 16.  “Master developer” means a person who buys, sells

4-11  or develops a planned unit development, including, without

4-12  limitation, a person who enters into a development agreement

4-13  pursuant to NRS 278.0201.

4-14      Sec. 17.  “Planned unit development” has the meaning

4-15  ascribed to it in NRS 278A.065.

4-16      Sec. 18.  “Residence” means any dwelling in which title to

4-17  the individual units is transferred to the owners.

4-18      Sec. 19.  “Subcontractor” means a contractor who performs

4-19  work on behalf of another contractor for any construction project.

4-20      Sec. 20.  “Subdivider” has the meaning ascribed to it in

4-21  NRS 278.0185.

4-22      Sec. 21.  “Supplier” means a person who provides materials,

4-23  equipment or other supplies for any construction project.

4-24      Sec. 22.  For the purposes of this chapter, a claimant

4-25  “recovers money for a constructional defect” if the claimant

4-26  recovers any amount of money to remedy the constructional defect

4-27  or to compensate the claimant for the constructional defect,

4-28  whether the recovery occurs through a final judgment, order,

4-29  award, settlement or compromise or through any other means that

4-30  resolves the claim for the constructional defect.

4-31      Sec. 23.  1.  The provisions of this chapter apply to any

4-32  claim for a constructional defect that arises before, on or after the

4-33  effective date of this act, unless the claimant:

4-34      (a) Has commenced an action concerning the claim in

4-35  accordance with NRS 40.600 to 40.695, inclusive, before the

4-36  effective date of this act; or

4-37      (b) Has given notice of the claim to the contractor,

4-38  subcontractor, supplier or design professional pursuant to NRS

4-39  40.600 to 40.695, inclusive, before the effective date of this act.

4-40      2.  Except as otherwise provided in this chapter, the provisions

4-41  of this chapter prevail over any conflicting law otherwise

4-42  applicable to a claim or cause of action for a constructional defect.

4-43      3.  The provisions of this chapter do not:

4-44      (a) Create a new theory upon which liability may be based; or

5-1  (b) Bar or limit any defense otherwise available, unless the

5-2  defense is expressly barred or limited pursuant to the provisions of

5-3  this chapter.

5-4  4.  The provisions of this chapter do not apply to:

5-5  (a) A claim for personal injury or wrongful death; or

5-6  (b) A claim that is subject to the provisions of NRS 40.600 to

5-7  40.695, inclusive.

5-8  Sec. 24.  1.  A contractor, subcontractor, supplier or design

5-9  professional is not liable for any design, construction,

5-10  manufacturing, alteration, improvement, repair or landscaping

5-11  that:

5-12      (a) Is functioning as intended and was completed in

5-13  compliance with the provisions of the applicable building codes in

5-14  effect when it was completed; or

5-15      (b) Is not the proximate cause of any damage or injury.

5-16      2.  For the purposes of this section, the approval of any

5-17  design, construction, manufacturing, alteration, improvement,

5-18  repair or landscaping by a building inspector is prima facie

5-19  evidence that the design, construction, manufacturing, alteration,

5-20  improvement, repair or landscaping was completed in compliance

5-21  with the provisions of the applicable building codes in effect when

5-22  it was completed.

5-23      Sec. 25.  1.  A contractor, subcontractor, supplier or design

5-24  professional:

5-25      (a) Is liable only for damages that are proximately caused by

5-26  his own acts or omissions or the acts or omissions of his agents,

5-27  employees or subcontractors; and

5-28      (b) Is not liable for damages that are proximately caused by:

5-29          (1) The acts or omissions of any other person; or

5-30          (2) The failure of any other person to take reasonable

5-31  action to maintain a residence or appurtenance or to reduce or

5-32  mitigate any damage or injury.

5-33      2.  A contractor, subcontractor, supplier or design

5-34  professional is not liable for:

5-35      (a) Normal wear, tear or deterioration; or

5-36      (b) Normal shrinkage, swelling, expansion or settlement.

5-37      3.  A contractor, subcontractor, supplier or design

5-38  professional is not liable for any constructional defect that is

5-39  disclosed to an owner before his purchase of the residence, if the

5-40  disclosure was provided in language that is understandable and

5-41  was written in underlined and boldfaced type with capital letters.

5-42      Sec. 26.  1.  Except as otherwise provided in this chapter, a

5-43  claimant may not bring a cause of action for a constructional

5-44  defect or amend a complaint to add a cause of action for a

6-1  constructional defect against a contractor, subcontractor, supplier

6-2  or design professional, unless the claimant has:

6-3  (a) Complied with the procedures concerning notice set forth

6-4  in this chapter with regard to each constructional defect that

6-5  forms the basis of the cause of action;

6-6  (b) Complied with the procedures concerning repairs set forth

6-7  in this chapter with regard to each constructional defect that

6-8  forms the basis of the cause of action; and

6-9  (c) Complied with the procedures concerning mediation set

6-10  forth in this chapter with regard to each constructional defect that

6-11  forms the basis of the cause of action.

6-12      2.  If a claimant brings a cause of action for a constructional

6-13  defect in violation of this section or amends a complaint to add a

6-14  cause of action for a constructional defect in violation of this

6-15  section, the court does not have jurisdiction to hear the subject

6-16  matter of the cause of action and the court shall dismiss the cause

6-17  of action without prejudice. The provisions of this section do not

6-18  preclude the court from dismissing the cause of action with

6-19  prejudice for reasons other than a violation of this section.

6-20      Sec. 27.  1.  Except as otherwise provided in this chapter,

6-21  before a claimant may bring a cause of action for a constructional

6-22  defect or amend a complaint to add a cause of action for a

6-23  constructional defect against a contractor, subcontractor, supplier

6-24  or design professional, the claimant must provide the contractor

6-25  for the construction project with written notice of each

6-26  constructional defect that forms the basis of the cause of action.

6-27  To provide such written notice, the claimant must:

6-28      (a) Use the standard form for providing notice of a

6-29  constructional defect;

6-30      (b) List on the standard form each contractor, subcontractor,

6-31  supplier and design professional who may be liable for the

6-32  constructional defect and whose identity is known by the claimant;

6-33  and

6-34      (c) Send the standard form by registered mail, return receipt

6-35  requested, to:

6-36          (1) The last known address of the contractor; or

6-37          (2) The address of the contractor that is listed in the records

6-38  of the State Contractors’ Board, the office of the county recorder

6-39  for the county where the work was performed, or the office of

6-40  the clerk that issues business licenses for the county or city where

6-41  the work was performed.

6-42      2.  If, before the claimant provides written notice to the

6-43  contractor for the construction project, the claimant knows that

6-44  the contractor for the construction project is no longer in business

6-45  as a contractor, the claimant shall provide written notice to each

7-1  subcontractor, supplier and design professional who may be liable

7-2  for the constructional defect and whose identity is known by the

7-3  claimant. To provide such written notice, the claimant must:

7-4  (a) Use the standard form for providing notice of a

7-5  constructional defect;

7-6  (b) List on the standard form each contractor, subcontractor,

7-7  supplier and design professional who may be liable for the

7-8  constructional defect and whose identity is known by the claimant;

7-9  and

7-10      (c) Send the standard form by registered mail, return receipt

7-11  requested, to:

7-12          (1) The last known address of the subcontractor, supplier

7-13  or design professional; or

7-14          (2) The address of the subcontractor, supplier or design

7-15  professional that is listed in the records of the State Contractors’

7-16  Board, the office of the county recorder for the county where the

7-17  work was performed, or the office of the clerk that issues business

7-18  licenses for the county or city where the work was performed.

7-19      3.  A subcontractor, supplier or design professional who

7-20  receives written notice from a claimant pursuant to this section is

7-21  entitled to the same rights to repair the constructional defect that

7-22  are afforded to a contractor pursuant to this chapter.

7-23      4.  A representative of a homeowners’ association that is

7-24  responsible for a residence or appurtenance may not provide the

7-25  written notice required by this section, unless the representative is

7-26  acting within the scope of his authority under the law and the

7-27  governing documents for the homeowners’ association and has

7-28  obtained an affirmative vote of at least a simple majority of the

7-29  members of the association.

7-30      5.  The State Contractors’ Board shall:

7-31      (a) Develop a standard form for providing notice of a

7-32  constructional defect for the purposes of this section; and

7-33      (b) Make the standard form available to claimants.

7-34      Sec. 28.  1.  After the claimant sends written notice of a

7-35  constructional defect pursuant to section 27 of this act, the

7-36  claimant, upon reasonable notice, shall provide the contractor for

7-37  the construction project and each subcontractor, supplier or

7-38  design professional who may be liable for the constructional

7-39  defect with access to the residence or appurtenance where the

7-40  constructional defect is located for the purposes of inspecting the

7-41  residence or appurtenance to determine the nature and extent of

7-42  the constructional defect and the nature and extent of any repairs

7-43  that may be necessary.

7-44      2.  The claimant shall provide the access required by this

7-45  section not later than 60 days after the date that written notice is

8-1  sent to the contractor pursuant to section 27 of this act or, if

8-2  written notice is sent to a subcontractor, supplier or design

8-3  professional pursuant to that section, not later than 60 days after

8-4  the date that written notice is sent to the subcontractor, supplier or

8-5  design professional.

8-6  Sec. 29.  1.  Not later than 30 days after the date that written

8-7  notice of a constructional defect is received by the contractor for

8-8  the construction project pursuant to section 27 of this act, the

8-9  contractor shall provide a copy of the written notice to each

8-10  subcontractor, supplier or design professional who the contractor

8-11  reasonably believes may be liable for the constructional defect.

8-12  The contractor must send the copy by registered mail, return

8-13  receipt requested, to:

8-14      (a) The last known address of the subcontractor, supplier or

8-15  design professional; and

8-16      (b) The address of the subcontractor, supplier or design

8-17  professional that is listed in the contract between the contractor

8-18  and the subcontractor, supplier or design professional.

8-19      2.  Not later than 15 days after the date of the inspection of

8-20  the constructional defect, the subcontractor, supplier or design

8-21  professional shall provide the contractor with:

8-22      (a) A written statement indicating whether the subcontractor,

8-23  supplier or design professional has elected to repair the

8-24  constructional defect; and

8-25      (b) If such an election is made:

8-26          (1) A written estimate as to the length of time to complete

8-27  the repairs and at least two proposed dates and times when the

8-28  repairs will begin; and

8-29          (2) A written statement waiving all rights to file mechanics’

8-30  and materialmen’s liens against the residence and its

8-31  appurtenances pursuant to NRS 108.221 to 108.246, inclusive,

8-32  with regard to the repairs performed pursuant to this chapter.

8-33      3.  Except as otherwise provided in this chapter, the

8-34  contractor may not pursue any claim related to the constructional

8-35  defect against a subcontractor, supplier or design professional

8-36  who is liable for the constructional defect, unless the contractor

8-37  has provided the subcontractor, supplier or design professional

8-38  with:

8-39      (a) A copy of the written notice from the claimant as required

8-40  by this section; and

8-41      (b) A reasonable opportunity to repair the constructional

8-42  defect.

8-43      4.  The contractor may pursue a claim related to the

8-44  constructional defect against a subcontractor, supplier or design

9-1  professional who is liable for the constructional defect if the

9-2  contractor:

9-3  (a) Made a good faith effort to discover the identity of the

9-4  subcontractor, supplier or design professional after the contractor

9-5  received written notice of the constructional defect from the

9-6  claimant; and

9-7  (b) Was unable to discover the identity of the subcontractor,

9-8  supplier or design professional within the 30-day period for

9-9  providing a copy of the written notice to the subcontractor,

9-10  supplier or design professional.

9-11      Sec. 30.  1.  Not later than 90 days after the date that written

9-12  notice is sent to the contractor pursuant to section 27 of this act or,

9-13  if written notice is sent to a subcontractor, supplier or design

9-14  professional pursuant to that section, not later than 90 days after

9-15  the date that written notice is sent to the subcontractor, supplier or

9-16  design professional, the contractor, subcontractor, supplier or

9-17  design professional, as appropriate, shall provide the claimant

9-18  with a written statement indicating whether the contractor,

9-19  subcontractor, supplier or design professional has elected to repair

9-20  the constructional defect.

9-21      2.  Except as otherwise provided in this chapter:

9-22      (a) If the contractor, subcontractor, supplier or design

9-23  professional has elected not to repair the constructional defect, the

9-24  claimant may bring a cause of action for the constructional defect

9-25  or amend a complaint to add a cause of action for the

9-26  constructional defect.

9-27      (b) If the contractor, subcontractor, supplier or design

9-28  professional has elected to repair the constructional defect, the

9-29  claimant must provide the contractor, subcontractor, supplier or

9-30  design professional with a reasonable opportunity to repair the

9-31  constructional defect.

9-32      3.  If the contractor, subcontractor, supplier or design

9-33  professional has elected to repair the constructional defect, the

9-34  contractor, subcontractor, supplier or design professional must:

9-35      (a) Either perform the repairs, but only if he is properly

9-36  licensed, bonded and insured to perform the repairs, or have the

9-37  repairs performed by a properly licensed, bonded and insured

9-38  contractor or subcontractor;

9-39      (b) Perform the repairs or have the repairs performed at

9-40  reasonable dates and times that are agreed to in advance with the

9-41  claimant;

9-42      (c) Complete the repairs or have the repairs completed within a

9-43  reasonable period as required by the provisions of this section;

9-44      (d) Not later than 30 days after the repairs are completed,

9-45  provide the claimant with a written statement indicating the nature

10-1  and extent of the repairs, the methods that were used to perform

10-2  the repairs and the nature and extent of any materials or parts that

10-3  were replaced; and

10-4      (e) Ensure that all contractors, subcontractors and suppliers

10-5  are paid for any labor performed or materials furnished for the

10-6  repairs so that there are no mechanics’ and materialmen’s liens

10-7  filed against the residence and its appurtenances pursuant to NRS

10-8  108.221 to 108.246, inclusive, and indemnify the claimant against

10-9  all such liens.

10-10     4.  Except as otherwise provided in this chapter, the

10-11  contractor, subcontractor, supplier or design professional must

10-12  complete or have the repairs completed not later than 150 days

10-13  after the date that written notice of the constructional defect is

10-14  sent to the contractor pursuant to section 27 of this act or, if

10-15  written notice is sent to the subcontractor, supplier or design

10-16  professional pursuant to that section, not later than 150 days after

10-17  the date that written notice is sent to the subcontractor, supplier or

10-18  design professional.

10-19     5.  The contractor, subcontractor, supplier or design

10-20  professional is not required to complete or have the repairs

10-21  completed within the period set forth in subsection 4 if:

10-22     (a) Completion of the repairs is delayed by the claimant or by

10-23  other events beyond the control of the contractor, subcontractor,

10-24  supplier or design professional; or

10-25     (b) Timely completion of the repairs is not reasonably possible.

10-26  If timely completion of the repairs is not reasonably possible, the

10-27  claimant and the contractor, subcontractor, supplier or design

10-28  professional must negotiate in good faith to set a reasonable

10-29  period for completion of the repairs.

10-30     6.  The claimant and any contractor, subcontractor, supplier

10-31  or design professional may agree in writing to extend the periods

10-32  prescribed by this section and sections 28 and 29 of this act.

10-33     Sec. 31.  1.  If the claimant disputes the method or adequacy

10-34  of any repairs that are performed pursuant to section 30 of this

10-35  act, the contractor, subcontractor, supplier or design professional

10-36  who performed or had the repairs performed may submit the

10-37  dispute to the State Contractors’ Board.

10-38     2.  If a dispute is submitted to the State Contractors’ Board

10-39  pursuant to this section, the State Contractors’ Board shall

10-40  investigate the dispute and render a decision concerning:

10-41     (a) Whether the method used to perform the repairs was

10-42  appropriate; and

10-43     (b) Whether the repairs were performed adequately in a good

10-44  and workmanlike manner and in accordance with applicable law.

10-45     3.  The decision of the State Contractors’ Board:

11-1      (a) Is not subject to judicial review pursuant to the provisions

11-2  of chapters 233B and 624 of NRS; and

11-3      (b) Is admissible in any action brought pursuant to the

11-4  provisions of this chapter.

11-5      4.  The provisions of this chapter do not preclude a claimant

11-6  or a contractor, subcontractor, supplier or design professional

11-7  from pursuing any remedy otherwise available from the State

11-8  Contractors’ Board pursuant to the provisions of chapter 624 of

11-9  NRS concerning a constructional defect.

11-10     5.  If a claimant or a contractor, subcontractor, supplier or

11-11  design professional pursues any remedy available from the State

11-12  Contractors’ Board pursuant to the provisions of this section or

11-13  chapter 624 of NRS concerning a constructional defect, no person

11-14  may bring a cause of action for the constructional defect or, if

11-15  such a cause of action already has been brought in a court of

11-16  competent jurisdiction, no further court proceedings may be held

11-17  concerning the cause of action until the State Contractors’ Board

11-18  renders a decision in the matter.

11-19     Sec. 32.  1.  Any statutes of limitation or statutes of repose

11-20  applicable to a cause of action for a constructional defect are

11-21  tolled during the following periods:

11-22     (a) From the date that the claimant sends written notice of the

11-23  constructional defect pursuant to section 27 of this act until:

11-24         (1) Sixty days after the date that the period for completion

11-25  of the repairs has expired pursuant to this chapter; or

11-26         (2) If the parties by mutual agreement have set a later date

11-27  for the completion of the repairs, 60 days after the later date.

11-28     (b) During any period in which the constructional defect is

11-29  the subject of an administrative proceeding that is pending before

11-30  the State Contractors’ Board.

11-31     (c) During any period in which the constructional defect is the

11-32  subject of a mediation that is pending.

11-33     2.  The tolling of any applicable statutes of limitation or

11-34  statutes of repose pursuant to this section:

11-35     (a) Applies only to the specific constructional defect that is the

11-36  subject of the repairs, the administrative proceeding pending

11-37  before the State Contractors’ Board or the mediation; and

11-38     (b) Does not apply to any other constructional defect,

11-39  regardless of whether the other constructional defect is in the

11-40  same residence or appurtenance.

11-41     3.  If any applicable statutes of limitation or statutes of repose

11-42  are tolled pursuant to this section, that tolling applies to the

11-43  claimant and to each contractor, subcontractor, supplier or design

11-44  professional who may be liable for the constructional defect.

12-1      Sec. 33.  1.  If a contractor, subcontractor, supplier or

12-2  design professional receives written notice of a constructional

12-3  defect pursuant to this chapter, the contractor, subcontractor,

12-4  supplier or design professional may present the claim to an

12-5  insurer which has issued a policy of insurance that covers all or

12-6  any portion of the business of the contractor, subcontractor,

12-7  supplier or design professional.

12-8      2.  If the contractor, subcontractor, supplier or design

12-9  professional presents the claim to the insurer pursuant to this

12-10  section, the insurer:

12-11     (a) Must treat the claim as if a civil action has been brought

12-12  against the contractor, subcontractor, supplier or design

12-13  professional; and

12-14     (b) Must provide coverage under the policy of insurance as if a

12-15  civil action has been brought against the contractor,

12-16  subcontractor, supplier or design professional.

12-17     3.  A contractor, subcontractor, supplier or design

12-18  professional is not required to present a claim to the insurer

12-19  pursuant to this section, and the failure to present such a claim to

12-20  the insurer does not relieve the insurer of any duty under the

12-21  policy of insurance to the contractor, subcontractor, supplier or

12-22  design professional.

12-23     Sec. 34.  1.  If a claimant brings a cause of action for a

12-24  constructional defect or amends a complaint to add a cause of

12-25  action for a constructional defect against the contractor for the

12-26  construction project, any subcontractor, supplier or design

12-27  professional who is liable for the constructional defect and who

12-28  did not receive written notice of the constructional defect pursuant

12-29  to section 27 or 29 of this act may make directly to the claimant an

12-30  offer to repair the constructional defect.

12-31     2.  Except as otherwise provided in this section, if the claimant

12-32  accepts the offer of the subcontractor, supplier or design

12-33  professional, the contractor may not pursue any claim related to

12-34  the constructional defect against the subcontractor, supplier or

12-35  design professional if:

12-36     (a) The subcontractor, supplier or design professional has the

12-37  constructional defect repaired to the satisfaction of the claimant;

12-38  and

12-39     (b) The claimant provides a written statement to the

12-40  subcontractor, supplier or design professional which indicates that

12-41  the constructional defect has been repaired to the satisfaction of

12-42  the claimant and which releases all claims against the contractor,

12-43  subcontractor, supplier or design professional with regard to the

12-44  constructional defect.

13-1      3.  Notwithstanding the provisions of subsections 1 and 2, the

13-2  contractor may pursue a claim related to the constructional defect

13-3  against the subcontractor, supplier or design professional if the

13-4  contractor:

13-5      (a) Made a good faith effort to discover the identity of the

13-6  subcontractor, supplier or design professional after the contractor

13-7  received written notice of the constructional defect from the

13-8  claimant; and

13-9      (b) Was unable to discover the identity of the subcontractor,

13-10  supplier or design professional within the 30-day period for

13-11  providing a copy of the written notice to the subcontractor,

13-12  supplier or design professional.

13-13     Sec. 35.  1.  Notwithstanding any other provision of this

13-14  chapter, if a claimant sends written notice of a constructional

13-15  defect to the contractor for the construction project and the nature

13-16  and extent of the constructional defect would lead a reasonable

13-17  contractor to believe that the constructional defect creates an

13-18  imminent threat to the health or safety of the inhabitants of the

13-19  residence, the contractor is required to repair the constructional

13-20  defect as soon as reasonably practicable. The contractor must:

13-21     (a) Either perform the repairs, but only if he is properly

13-22  licensed, bonded and insured to perform the repairs, or have the

13-23  repairs performed by a properly licensed, bonded and insured

13-24  contractor or subcontractor; and

13-25     (b) Ensure that all contractors, subcontractors and suppliers

13-26  are paid for any labor performed or materials furnished for the

13-27  repairs so that there are no mechanics’ and materialmen’s liens

13-28  filed against the residence and its appurtenances pursuant to NRS

13-29  108.221 to 108.246, inclusive, and indemnify the claimant against

13-30  all such liens.

13-31     2.  If the contractor does not repair the constructional defect

13-32  as soon as reasonably practicable, the claimant may have

13-33  the defect repaired and may bring a cause of action for the

13-34  constructional defect against the contractor to recover:

13-35     (a) The reasonable costs of the repairs;

13-36     (b) Reasonable attorney’s fees and costs; and

13-37     (c) Any other damages recoverable under any other law.

13-38     3.  If, after a reasonable inspection of the residence, the

13-39  contractor determines, in good faith, that the constructional defect

13-40  does not create an imminent threat to the health or safety of the

13-41  inhabitants of the residence, the contractor is not subject to the

13-42  provisions of this section unless, after the contractor makes his

13-43  determination, a building inspector certifies that the

13-44  constructional defect creates an imminent threat to the health or

13-45  safety of the inhabitants of the residence.

14-1      Sec. 36.  1.  Notwithstanding any other provision of this

14-2  chapter, if a claimant is the initial purchaser of a new residence

14-3  and, not later than 1 year after the close of escrow for the initial

14-4  purchase, the claimant sends to the contractor for the construction

14-5  project written notice of a constructional defect that does not

14-6  create an imminent threat to the health or safety of the inhabitants

14-7  of the residence, the contractor is required to repair the

14-8  constructional defect in accordance with the provisions of this

14-9  section, unless:

14-10     (a) After a reasonable inspection, the contractor determines, in

14-11  good faith, that there is no constructional defect; and

14-12     (b) The contractor provides to the claimant written notice of

14-13  the contractor’s determination.

14-14     2.  If the contractor is required to repair the constructional

14-15  defect in accordance with the provisions of this section, the

14-16  contractor must:

14-17     (a) Either perform the repairs, but only if he is properly

14-18  licensed, bonded and insured to perform the repairs, or have the

14-19  repairs performed by a properly licensed, bonded and insured

14-20  contractor or subcontractor;

14-21     (b) Perform the repairs or have the repairs performed at

14-22  reasonable dates and times that are agreed to in advance with the

14-23  claimant;

14-24     (c) Complete the repairs or have the repairs completed within a

14-25  reasonable period as required by the provisions of this section;

14-26  and

14-27     (d) Ensure that all contractors, subcontractors and suppliers

14-28  are paid for any labor performed or materials furnished for the

14-29  repairs so that there are no mechanics’ and materialmen’s liens

14-30  filed against the residence and its appurtenances pursuant to NRS

14-31  108.221 to 108.246, inclusive, and indemnify the claimant against

14-32  all such liens.

14-33     3.  The contractor must complete the repairs or have the

14-34  repairs completed not later than 45 days after the date that written

14-35  notice of the constructional defect is sent to the contractor, unless:

14-36     (a) Completion of the repairs is delayed by the claimant or by

14-37  other events beyond the control of the contractor; or

14-38     (b) Timely completion of the repairs is not reasonably possible.

14-39  If timely completion of the repairs is not reasonably possible, the

14-40  claimant and the contractor must negotiate in good faith to set a

14-41  reasonable period for completion of the repairs.

14-42     4.  The claimant and the contractor may agree in writing to

14-43  extend the periods prescribed by this section.

15-1      5.  If the contractor fails to comply with this section, the

15-2  contractor is immediately subject to discipline pursuant to

15-3  NRS 624.300.

15-4      Sec. 37.  1.  In addition to the other requirements of this

15-5  chapter, a claimant may not bring a cause of action for a

15-6  constructional defect or amend a complaint to add a cause of

15-7  action for a constructional defect against a contractor,

15-8  subcontractor, supplier or design professional, unless:

15-9      (a) The matter is first submitted to a mediation; or

15-10     (b) The claimant and the other parties agree, in writing, to

15-11  waive the mediation.

15-12     2.  If the matter is submitted to a mediation, the mediator must

15-13  be selected by an agreement between the claimant and the other

15-14  parties. If the claimant and the other parties fail to agree upon a

15-15  mediator within 45 days after a mediator is first selected by the

15-16  claimant, the claimant or any other party may petition the

15-17  American Arbitration Association, the Nevada Arbitration

15-18  Association, Nevada Dispute Resolution Services or any other

15-19  mediation service acceptable to the parties for the appointment of

15-20  a mediator.

15-21     3.  The mediator shall commence the mediation within 60

15-22  days after the matter is submitted to him, unless the claimant and

15-23  the other parties agree to extend the time for the commencement

15-24  of the mediation.

15-25     4.  Before the mediation begins:

15-26     (a) The claimant shall deposit $50 with the mediation service;

15-27  and

15-28     (b) The other parties shall deposit with the mediation service

15-29  the remaining amount estimated by the mediation service as

15-30  necessary to pay the fees and expenses of the mediator for the first

15-31  session of the mediation. The other parties shall deposit additional

15-32  amounts demanded by the mediation service as incurred for that

15-33  purpose.

15-34     5.  The total fees for each day of the mediation and the

15-35  mediator must not exceed $750 per day, unless the claimant and

15-36  the other parties agree to a different amount.

15-37     6.  The mediator may discover only those documents or

15-38  materials which are necessary to conduct the mediation.

15-39     7.  Not later than 15 days before the mediation begins and

15-40  upon providing 15 days’ notice, each party shall provide the other

15-41  party, or shall make a reasonable effort to assist the other party to

15-42  obtain, all relevant reports, photos, correspondence, plans,

15-43  specifications, warranties, contracts, subcontracts, work orders for

15-44  repair, videotapes, technical reports, soil and other engineering

15-45  reports and other documents or materials relating to the

16-1  constructional defect to the extent that such documents or

16-2  materials are not privileged.

16-3      Sec. 38.  1.  If the claimant and any other party fail to

16-4  resolve the matter during the mediation or if any other party fails

16-5  to pay the required fees for the mediation or fails to appear for the

16-6  mediation:

16-7      (a) The claimant may bring a cause of action for the

16-8  constructional defect or amend a complaint to add a cause of

16-9  action for the constructional defect against the party; and

16-10     (b) The prevailing party in the action may recover, as costs of

16-11  the action, the reasonable costs and fees paid by the party for the

16-12  mediation.

16-13     2.  In such an action, the claimant or any other party may

16-14  petition the court in which the action is commenced for the

16-15  appointment of a special master. If the court appoints a special

16-16  master, the special master may:

16-17     (a) Review all pleadings, papers or documents filed with the

16-18  court concerning the action.

16-19     (b) Coordinate the discovery of any books, records, papers or

16-20  other documents or materials by the parties, including the

16-21  disclosure of witnesses and the taking of the deposition of any

16-22  party.

16-23     (c) Order any inspections on the site of the property by a party

16-24  and any consultants or experts of a party.

16-25     (d) Order settlement conferences and attendance at those

16-26  conferences by any representative of the insurer of a party.

16-27     (e) Require any attorney representing a party to provide

16-28  statements of legal and factual issues concerning the action.

16-29     (f) Refer to the judge who appointed him or to the presiding

16-30  judge of the court in which the action is commenced any matter

16-31  requiring assistance from the court.

16-32     3.  The special master shall not personally conduct any

16-33  settlement conferences or engage in any ex parte meetings

16-34  regarding the action, unless the claimant and the other parties

16-35  agree to allow the special master to engage in such conduct.

16-36     4.  Upon application by a party to the court in which the

16-37  action is commenced, any decision or other action taken by the

16-38  special master may be appealed to the court for a decision.

16-39     5.  A report issued by a mediator or a special master which

16-40  indicates that a party has failed to appear before him or to mediate

16-41  in good faith is admissible in the action, but a statement or

16-42  admission made by a party in the course of the mediation or an

16-43  appearance before the special master is not admissible.

16-44     Sec. 39.  1.  In addition to the other requirements of this

16-45  chapter and except as otherwise provided in subsection 2, if a

17-1  claimant brings a cause of action for a constructional defect or

17-2  amends a complaint to add a cause of action for a constructional

17-3  defect against a design professional, including, without limitation,

17-4  a cause of action for professional negligence, the attorney for the

17-5  claimant must file an affidavit with the court concurrently with the

17-6  service of the first pleading in the action stating that the attorney:

17-7      (a) Has reviewed the facts of the case;

17-8      (b) Has consulted with an expert;

17-9      (c) Reasonably believes the expert who was consulted is

17-10  knowledgeable in the relevant discipline involved in the action;

17-11  and

17-12     (d) Has concluded on the basis of his review and the

17-13  consultation with the expert that the action has a reasonable basis

17-14  in law and fact.

17-15     2.  The attorney for the claimant may file the affidavit

17-16  required pursuant to subsection 1 at a later time if the attorney

17-17  could not consult with an expert and prepare the affidavit before

17-18  filing the action without causing the action to be impaired or

17-19  barred by any statutes of limitations or statutes of repose, or other

17-20  limitations prescribed by law. If the attorney must submit the

17-21  affidavit late, the attorney shall:

17-22     (a) File an affidavit concurrently with the service of the first

17-23  pleading in the action stating his reason for failing to comply with

17-24  subsection 1; and

17-25     (b) Consult with an expert and file the affidavit required

17-26  pursuant to subsection 1 not later than 45 days after filing the

17-27  action.

17-28     3.  In addition to the statement included in the affidavit

17-29  pursuant to subsection 1, a report must be attached to the

17-30  affidavit. Except as otherwise provided in subsection 4, the report

17-31  must be prepared by the expert consulted by the attorney and

17-32  include, without limitation:

17-33     (a) The resume of the expert;

17-34     (b) A statement that the expert is experienced in each

17-35  discipline which is the subject of the report;

17-36     (c) A copy of each nonprivileged document reviewed by the

17-37  expert in preparing his report, including, without limitation, each

17-38  record, report and related document that the expert has

17-39  determined is relevant to the allegations of negligent conduct that

17-40  are the basis for the action;

17-41     (d) The conclusions of the expert and the basis for the

17-42  conclusions; and

17-43     (e) A statement that the expert has concluded that there is a

17-44  reasonable basis for filing the action.

18-1      4.  In an action brought by a claimant in which an affidavit is

18-2  required to be filed pursuant to subsection 1:

18-3      (a) The report required pursuant to subsection 3 is not

18-4  required to include the information set forth in paragraphs (c) and

18-5  (d) of subsection 3 if the claimant or his attorney files an affidavit,

18-6  at the time that the affidavit is filed pursuant to subsection 1,

18-7  stating that he made reasonable efforts to obtain the nonprivileged

18-8  documents described in paragraph (c) of subsection 3, but was

18-9  unable to obtain such documents before filing the action;

18-10     (b) The claimant or his attorney shall amend the report

18-11  required pursuant to subsection 3 to include any documents and

18-12  information required pursuant to paragraph (c) or (d) of

18-13  subsection 3 as soon as reasonably practicable after receiving the

18-14  document or information; and

18-15     (c) The court may dismiss the action if the claimant and his

18-16  attorney fail to comply with the requirements of paragraph (b).

18-17     5.  An expert consulted by the attorney of the claimant to

18-18  prepare an affidavit pursuant to this section must not be a party to

18-19  the action.

18-20     6.  The court shall dismiss the action against the design

18-21  professional if the attorney for the claimant fails to:

18-22     (a) File an affidavit required pursuant to this section;

18-23     (b) File a report required pursuant to subsection 3; or

18-24     (c) Name the expert consulted in the affidavit required

18-25  pursuant to subsection 1.

18-26     7.  The fact that the attorney for the claimant has complied or

18-27  failed to comply with the provisions of this section is admissible in

18-28  the action.

18-29     8.  As used in this section, “expert” means a person who is

18-30  licensed in a state to engage in the practice of professional

18-31  engineering, land surveying, architecture or landscape

18-32  architecture.

18-33     Sec. 40.  1.  Notwithstanding any other provision of this

18-34  chapter, a claimant may not bring a cause of action or amend a

18-35  complaint to add a cause of action against a subdivider or master

18-36  developer for a constructional defect in an appurtenance

18-37  constructed on behalf of the subdivider or master developer in a

18-38  planned unit development, to the extent that the appurtenance was

18-39  constructed by or through a licensed general contractor, unless:

18-40     (a) The subdivider or master developer fails to provide to the

18-41  claimant the name, address and telephone number of each

18-42  contractor hired by the subdivider or master developer to construct

18-43  the appurtenance within 30 days after the receipt by the subdivider

18-44  or master developer of a request from the claimant for such

18-45  information; or

19-1      (b) After the claimant has made a good faith effort to obtain

19-2  full recovery from the contractors hired by the subdivider or

19-3  master developer to construct the appurtenance, the claimant has

19-4  not obtained a full recovery.

19-5      2.  Any statutes of limitation or statutes of repose applicable to

19-6  a claim governed by this section are tolled from the time the

19-7  claimant notifies a contractor hired by the subdivider or master

19-8  developer of the claim until the earlier of the date:

19-9      (a) A court determines that the claimant cannot obtain a full

19-10  recovery against those contractors; or

19-11     (b) The claimant receives notice that those contractors are

19-12  bankrupt, insolvent or dissolved.

19-13  Tolling pursuant to this subsection applies only to the subdivider

19-14  or master developer. Notwithstanding any applicable statutes of

19-15  limitation or statutes of repose, the claimant may commence an

19-16  action against the subdivider or master developer for the claim

19-17  within 1 year after the end of the tolling described in this

19-18  subsection.

19-19     3.  The provisions of this section do not prohibit the

19-20  commencement of an action against a subdivider or master

19-21  developer for a constructional defect in a residence sold, designed

19-22  or constructed by or on behalf of the subdivider or master

19-23  developer.

19-24     4.  The provisions of this section do not prohibit a person

19-25  other than the claimant from commencing an action against a

19-26  subdivider or master developer to enforce his own rights.

19-27     5.  The provisions of this section do not apply to a subdivider

19-28  or master developer who acts as a general contractor or uses his

19-29  license as a general contractor in the course of constructing the

19-30  appurtenance that is the subject of the action.

19-31     Sec. 41.  1.  In any action brought pursuant to this chapter,

19-32  any party to the action may petition the court to assign the action

19-33  to a senior judge.

19-34     2.  If the court assigns the action to a senior judge, any

19-35  additional expenses caused by that assignment must be borne by

19-36  the party who petitioned the court for the assignment of the senior

19-37  judge.

19-38     Sec. 42.  1.  If any party brings an action pursuant to this

19-39  chapter as a class action or seeks certification of an action

19-40  brought pursuant to this chapter as a class action, a claimant shall

19-41  not be deemed to be a member of the class or a party to the class

19-42  action and is not bound by any order, decision or judgment in the

19-43  class action, unless:

19-44     (a) The claimant, or a party to the class action acting on

19-45  behalf of the claimant, files with the court a certification which is

20-1  signed and sworn by the claimant and which contains an

20-2  affirmative representation stating that the claimant has complied

20-3  with the notice provisions of section 27 of this act; and

20-4      (b) Each other claimant who has chosen to be a member of the

20-5  class, or a party to the class action acting on behalf of that

20-6  claimant, files with the court a certification which is signed and

20-7  sworn by the claimant and which contains an affirmative

20-8  representation stating that the claimant has complied with the

20-9  notice provisions of section 27 of this act.

20-10     2.  If there is a conflict between the provisions of this section

20-11  and the provisions of any other statute or any court rule or any

20-12  principle of the common law or equity, the provisions of this

20-13  section prevail and must be interpreted to supersede any other

20-14  provisions or principles that are in conflict with the provisions of

20-15  this section.

20-16     Sec. 43.  1.  At the same time that a claimant brings a cause

20-17  of action for a constructional defect or amends a complaint to add

20-18  a cause of action for a constructional defect, the claimant shall

20-19  send written notice of the cause of action by registered mail,

20-20  return receipt requested, to each person who holds a security

20-21  interest in the residence or appurtenance which is the subject of

20-22  the constructional defect and whose security interest is recorded in

20-23  the office of the county recorder for the county where the

20-24  residence or appurtenance is located.

20-25     2.  If the claimant recovers money for the constructional

20-26  defect, not later than 30 days before the claimant disburses or

20-27  spends the money, the claimant shall send written notice by

20-28  registered mail, return receipt requested, to each person who was

20-29  entitled to receive the prior written notice from the claimant

20-30  pursuant to subsection 1. The written notice must set forth the

20-31  amount of money that the claimant recovered for the

20-32  constructional defect.

20-33     Sec. 44.  1.  If a constructional defect is part of a residence

20-34  or appurtenance which is covered by a homeowner’s warranty that

20-35  has been purchased by or on behalf of a claimant pursuant to

20-36  NRS 690B.100 to 690B.180, inclusive, the claimant shall diligently

20-37  pursue a claim under the homeowner’s warranty.

20-38     2.  If the claimant is paid any money under the homeowner’s

20-39  warranty for the constructional defect, the amount paid to the

20-40  claimant under the homeowner’s warranty must be deducted from

20-41  any amount that the claimant recovers from a contractor,

20-42  subcontractor, supplier or design professional for the

20-43  constructional defect. The provisions of this subsection do not

20-44  apply to any amount paid to the claimant in satisfaction of claims

21-1  that are collateral to any coverage issued to or by the contractor,

21-2  subcontractor, supplier or design professional.

21-3      3.  If an insurer, in bad faith, denies coverage under a

21-4  homeowner’s warranty, the claimant and each contractor,

21-5  subcontractor, supplier or design professional who is liable for the

21-6  constructional defect may bring a cause of action against the

21-7  insurer to recover:

21-8      (a) The money that would have been paid under the

21-9  homeowner’s warranty if the coverage had been provided; and

21-10     (b) Reasonable attorney’s fees and costs.

21-11     Sec. 45.  1.  Not later than 10 days after bringing a cause of

21-12  action or amending a complaint to add a cause of action for a

21-13  constructional defect against a contractor, subcontractor, supplier

21-14  or design professional, the claimant shall disclose all information

21-15  about any homeowner’s warranty that is applicable to the cause of

21-16  action.

21-17     2.  Not later than 10 days after the claimant’s disclosure, the

21-18  contractor, subcontractor, supplier or design professional shall

21-19  disclose any information about insurance agreements that may be

21-20  obtained by discovery pursuant to Rule 26(b)(2) of the Nevada

21-21  Rules of Civil Procedure. Such disclosure does not affect the

21-22  admissibility at trial of the information disclosed.

21-23     3.  Except as otherwise provided in subsection 4, if any party

21-24  fails to provide the information required pursuant to subsection 1

21-25  or 2 within the time allowed, any party who is aggrieved by the

21-26  failure may petition the court to compel production of the

21-27  information. Upon receiving such a petition, the court may order

21-28  the party to produce the required information and may award the

21-29  petitioning party reasonable attorney’s fees and costs incurred in

21-30  petitioning the court pursuant to this subsection.

21-31     4.  The parties may agree to an extension of time to produce

21-32  the information required pursuant to this section.

21-33     5.  If there is a conflict between the provisions of this section

21-34  and the provisions of any other statute or any court rule or any

21-35  principle of the common law or equity, the provisions of this

21-36  section prevail and must be interpreted to supersede any other

21-37  provisions or principles that are in conflict with the provisions of

21-38  this section.

21-39     6.  As used in this section, “information about insurance

21-40  agreements” means any declaration sheets, endorsements and

21-41  contracts of insurance issued to the contractor, subcontractor,

21-42  supplier or design professional from the commencement of

21-43  construction of the residence or appurtenance to the date on

21-44  which the request for the information is made. The term does not

21-45  include any information concerning any disputes between the

22-1  contractor, subcontractor, supplier or design professional and the

22-2  insurer, or any information concerning any reservation of rights

22-3  by the insurer.

22-4      Sec. 46.  1.  Not later than 30 days after the date of service

22-5  of the answer to the complaint, the parties shall meet to establish:

22-6      (a) A schedule for the parties to exchange or provide

22-7  reasonable access to all relevant reports, photos, correspondence,

22-8  plans, specifications, warranties, contracts, subcontracts, work

22-9  orders for repair, videotapes, technical reports, soil and other

22-10  engineering reports and other documents or materials relating to

22-11  each constructional defect to the extent that such documents or

22-12  materials are not privileged.

22-13     (b) A schedule for the parties to inspect the residence or

22-14  appurtenance where each constructional defect is located.

22-15     (c) A schedule for the parties to conduct any tests that are

22-16  reasonably necessary to determine the nature and cause of each

22-17  constructional defect or any damage or injury, and the nature and

22-18  extent of any repairs necessary to remedy each constructional

22-19  defect or any damage or injury. The party conducting the test shall

22-20  provide reasonable notice of the test to all other parties and

22-21  conduct the test at a reasonable time.

22-22     (d) A deadline for the claimant to issue to the other parties a

22-23  final defect list. The deadline must not be later than 180 days after

22-24  the date that the meeting is held pursuant to this subsection. The

22-25  final defect list must include:

22-26         (1) A description of each constructional defect;

22-27         (2) The disclosure of each specific location which has been

22-28  inspected with regard to each constructional defect;

22-29         (3) The disclosure of each specific location which has

22-30  been intrusively tested with regard to each constructional defect;

22-31         (4) A description of any other testing which has been

22-32  conducted to substantiate each constructional defect; and

22-33         (5) A statement of the legal and factual basis for each

22-34  constructional defect, including, without limitation, any applicable

22-35  construction standards or specifications which may have been

22-36  violated.

22-37     (e) A deadline for the claimant to issue to the other parties a

22-38  statement of the method and cost of repair. The deadline must not

22-39  be later than 180 days after the date that the meeting is held

22-40  pursuant to this subsection. The statement of the method and cost

22-41  of repair must include:

22-42         (1) A description of the method to be used to repair each

22-43  constructional defect described in the final defect list; and

22-44         (2) An estimate of the cost to repair each constructional

22-45  defect described in the final defect list, including, without

23-1  limitation, an estimate of the quantities of materials needed for the

23-2  repairs and the unit cost for those materials, an estimate of the

23-3  cost for labor and other materials and an estimate of any

23-4  construction burdens.

23-5      2.  The claimant shall issue the final defect list and the

23-6  statement of the method and cost of repair to the other parties not

23-7  later than the deadline established by the parties pursuant to

23-8  subsection 1. After the claimant issues the final defect list and the

23-9  statement of the method and cost of repair, the claimant may not

23-10  amend or otherwise change the final defect list or the statement of

23-11  the method and cost of repair to include any additional

23-12  constructional defects, unless the claimant is able to demonstrate,

23-13  by clear and convincing evidence, that the additional

23-14  constructional defects arose after the date that the claimant issued

23-15  the final defect list.

23-16     3.  At the meeting held pursuant to subsection 1, the parties

23-17  shall establish a schedule for adding additional parties to the

23-18  complaint and for filing any third-party complaints against

23-19  additional parties who may be liable, in whole or in part, for the

23-20  constructional defects alleged in the complaint.

23-21     4.  If any party adds an additional party to the complaint or

23-22  files a third-party complaint against an additional party:

23-23     (a) The additional party shall file and serve an answer as

23-24  required by law; and

23-25     (b) Not later than 30 days after the date that the additional

23-26  party files an answer, the additional party shall meet with the

23-27  other parties to establish or modify the schedules and deadlines

23-28  required by subsection 1 with regard to the additional party.

23-29     Sec. 47.  1.  If a settlement conference is held concerning a

23-30  claim for a constructional defect, the special master, if any, or the

23-31  judge presiding over the claim may order a representative of an

23-32  insurer of a party to attend the settlement conference. If a

23-33  representative of an insurer is ordered to attend the settlement

23-34  conference, the insurer shall ensure that the representative is

23-35  authorized, on behalf of the insurer, to:

23-36     (a) Bind the insurer to any settlement agreement relating to

23-37  the claim;

23-38     (b) Enter into any agreement relating to coverage under the

23-39  party’s policy of insurance that is required to carry out any

23-40  settlement relating to the claim; and

23-41     (c) Commit for expenditure any money or other assets

23-42  available under the party’s policy of insurance.

23-43     2.  If a representative of an insurer who is ordered to attend a

23-44  settlement conference pursuant to subsection 1 fails to attend the

23-45  settlement conference or attends but is substantially unprepared to

24-1  participate, or fails to participate in good faith, the special master

24-2  or the judge may, on his own motion or that of a party, issue any

24-3  order with regard thereto that is just under the circumstances.

24-4      3.  In lieu of or in addition to any other sanction, the special

24-5  master or the judge may require the insurer to pay any reasonable

24-6  expenses or attorney’s fees incurred by a party because of the

24-7  failure of the insurer or its representative to comply with the

24-8  provisions of this section or any order issued pursuant to this

24-9  section, unless the special master or the judge finds that the

24-10  failure to comply was substantially justified or that any other

24-11  circumstances make the award of such expenses or fees unjust.

24-12     4.  The special master may report any violation of this section

24-13  or any order issued by the special master pursuant to this section

24-14  to any judge who subsequently presides over the claim and may

24-15  recommend any appropriate sanctions as a result of the violation.

24-16     5.  Any insurer which conducts business in this state and

24-17  which insures a party against liability for the claim shall be

24-18  deemed to have consented to the jurisdiction of the special master

24-19  or the judge for the purposes of this section. To the extent that the

24-20  insurer fails to comply with any order issued by the special master

24-21  or the judge, the insurer is subject to an award of sanctions

24-22  imposed by the special master or the judge.

24-23     6.  The authority conferred upon the special master or the

24-24  judge pursuant to this section is in addition to any other authority

24-25  conferred upon the special master or the judge pursuant to any

24-26  other statute or any court rule.

24-27     Sec. 48.  1.  In addition to any other method for settling a

24-28  claim for a constructional defect, a contractor, subcontractor,

24-29  supplier or design professional may enter into a written agreement

24-30  with the claimant to settle the claim by repurchasing the

24-31  claimant’s residence and the real property upon which it is

24-32  located.

24-33     2.  The agreement may include provisions which reimburse

24-34  the claimant for:

24-35     (a) The market value of the residence as if no constructional

24-36  defect existed, except that if a residence is less than 2 years of age

24-37  and was purchased from the contractor against whom the claim is

24-38  brought, the market value is the price at which the residence was

24-39  sold to the claimant;

24-40     (b) The value of any improvements made to the property by a

24-41  person other than the contractor, subcontractor, supplier or design

24-42  professional;

24-43     (c) Reasonable attorney’s fees and fees for experts; and

24-44     (d) Any other costs, including, without limitation:

 

25-1          (1) Costs and expenses for moving; and

25-2          (2) Costs, points and fees for loans.

25-3      Sec. 49.  1.  If a contractor, subcontractor, supplier or

25-4  design professional is found liable to the claimant for a cause of

25-5  action for a constructional defect, the claimant is entitled to

25-6  recover only the damages set forth in this section to the extent

25-7  those damages are proximately caused by the constructional

25-8  defect.

25-9      2.  The claimant is entitled to recover the lesser of:

25-10     (a) The reasonable cost of any repairs already made that were

25-11  necessary and of any repairs yet to be made that are necessary to

25-12  cure the constructional defect to the extent that the contractor,

25-13  subcontractor, supplier or design professional failed to cure the

25-14  constructional defect, plus the reasonable expenses of any

25-15  temporary housing that was or will be reasonably necessary

25-16  during any such repairs; or

25-17     (b) The diminution in the value of the residence, appurtenance

25-18  or other property resulting from the constructional defect to the

25-19  extent that the contractor, subcontractor, supplier or design

25-20  professional failed to cure the constructional defect.

25-21     3.  The claimant is entitled to recover the reasonable value of

25-22  any other property damaged by the constructional defect.

25-23     4.  The claimant is entitled to recover any interest provided by

25-24  statute, except that the claimant is not entitled to recover any

25-25  prejudgment interest if the claimant is using present value as the

25-26  basis for determining the cost of repairs or the amount of the

25-27  damages.

25-28     Sec. 50.  1.  For each cause of action for a constructional

25-29  defect, the court shall determine which party is the prevailing

25-30  party for the cause of action. A prevailing party is entitled to

25-31  recover:

25-32     (a) Reasonable attorney’s fees; and

25-33     (b) Any other fees and costs reasonably incurred by the

25-34  prevailing party, including, without limitation, any fees and costs

25-35  incurred for the retention of experts.

25-36     2.  For the purposes of this section, the claimant is not a

25-37  prevailing party and is not entitled to recover any attorney’s fees

25-38  or other fees and costs with regard to a cause of action for a

25-39  constructional defect if the court finds that there is no contractor,

25-40  subcontractor, supplier or design professional who is liable to the

25-41  claimant for the constructional defect.

25-42     3.  For the purposes of this section, if the claimant rejects any

25-43  offer or any best and final offer made by a contractor,

25-44  subcontractor, supplier or design professional, and if the final

25-45  judgment in the action is less favorable to the claimant than the

26-1  offer or the best and final offer rejected by the claimant, the

26-2  contractor, subcontractor, supplier or design professional who

26-3  made the offer or the best and final offer shall be deemed to be the

26-4  prevailing party beginning on the date that the offer or the best

26-5  and final offer was rejected by the claimant. If the final judgment

26-6  in the action is more favorable to the claimant than the offer or

26-7  best and final offer rejected by the claimant, the claimant shall be

26-8  deemed to be the prevailing party beginning on the date that the

26-9  offer or the best and final offer was rejected by the claimant.

26-10     4.  Any party may challenge the reasonableness of any

26-11  attorney’s fees or other fees and costs requested pursuant to this

26-12  section.

26-13     5.  Any party may submit an offer to repair a constructional

26-14  defect or to settle a claim directly to the claimant. In such an offer,

26-15  the party may reserve the right to challenge the reasonableness of

26-16  any attorney’s fees or other fees and costs. An attorney who

26-17  represents the claimant shall not refuse to present an offer to the

26-18  claimant because the offer contains a reservation of rights to

26-19  challenge the reasonableness of any attorney’s fees or other fees

26-20  and costs.

26-21     6.  The court is given the discretion to determine the

26-22  reasonableness of any attorney’s fees or other fees and costs

26-23  requested pursuant to this section, and the court must approve the

26-24  reasonableness of any attorney’s fees or other fees and costs

26-25  before they are awarded to the claimant or any other party.

26-26     7.  In determining the reasonableness of any attorney’s fees or

26-27  other fees and costs, the court:

26-28     (a) Must multiply the number of hours reasonably spent on the

26-29  case by a reasonable hourly rate as determined by the court;

26-30     (b) Must take into account the nature and the extent of the risk

26-31  involved in prosecuting or defending the cause of action and the

26-32  necessity of agreeing to a contingency arrangement to procure

26-33  competent counsel; and

26-34     (c) May consider the extent to which the attorney’s fees or

26-35  other fees and costs are based on causes of action for which the

26-36  claimant prevailed and did not prevail.

26-37     8.  A determination made by the court relating to the

26-38  reasonableness of any attorney’s fees or other fees and costs:

26-39     (a) Is binding upon the attorney; and

26-40     (b) Controls over any conflicting provision set forth in a

26-41  contract or other agreement entered into between the attorney and

26-42  the party.

26-43     9.  The provisions of this chapter:

26-44     (a) Do not prohibit a party from making an offer of judgment

26-45  pursuant to NRS 17.115 or Rule 68 of the Nevada Rules of Civil

27-1  Procedure or obtaining an award of attorney’s fees or other fees

27-2  and costs pursuant thereto;

27-3      (b) Do not prevail over, but must be applied in addition to, any

27-4  other statute or court rule relating to the settlement of claims or

27-5  the award of attorney’s fees or other fees and costs; and

27-6      (c) Do not impair any right of a contractor, subcontractor,

27-7  supplier or design professional to enter into or enforce any

27-8  contract or agreement providing for the recovery of attorney’s fees

27-9  or other fees and costs from another contractor, subcontractor,

27-10  supplier or design professional.

27-11     Sec. 51.  1.  Notwithstanding any other provision of this

27-12  chapter, a claimant or a contractor, subcontractor, supplier or

27-13  design professional may not bring any claim relating to a

27-14  constructional defect against a government, governmental agency

27-15  or political subdivision of a government during the period in

27-16  which the claim is being settled, mediated or otherwise resolved

27-17  pursuant to the provisions of this chapter.

27-18     2.  The settlement of any claim relating to a constructional

27-19  defect does not affect the rights or obligations of the claimant or

27-20  any contractor, subcontractor, supplier or design professional in

27-21  any action brought by the claimant or the contractor,

27-22  subcontractor, supplier or design professional against a third

27-23  party.

27-24     Sec. 52.  1.  A contractor who develops, constructs or

27-25  landscapes a new residence shall provide to the initial purchaser

27-26  of the new residence, not later than 60 days after the close of

27-27  escrow for the initial purchase, a written statement which contains

27-28  the following information:

27-29     (a) For each subcontractor who performed any work relating

27-30  to the development, construction or landscaping of the new

27-31  residence:

27-32         (1) The name, license number, business address and

27-33  telephone number of the subcontractor; and

27-34         (2) A brief description of the work performed by the

27-35  subcontractor.

27-36     (b) An informational statement indicating that each

27-37  subcontractor is entitled to record a notice of lien upon the new

27-38  residence and its appurtenances pursuant to NRS 108.221 to

27-39  108.246, inclusive, for any labor performed or materials furnished

27-40  by the subcontractor in the development, construction or

27-41  landscaping of the new residence.

27-42     (c) An informational statement describing the rights and duties

27-43  of contractors, subcontractors and owners with regard to:

27-44         (1) The provisions of chapter 624 of NRS; and

28-1          (2) The filing and enforcement of mechanics’ and

28-2  materialmen’s liens pursuant to NRS 108.221 to 108.246,

28-3  inclusive.

28-4      2.  The State Contractors’ Board shall prescribe requirements

28-5  relating to the form and contents for the written statement that a

28-6  contractor must provide to the initial purchaser of a new residence

28-7  pursuant to this section.

28-8      3.  A contractor shall not provide to the initial purchaser of a

28-9  new residence a written statement that deviates materially from the

28-10  requirements prescribed by the State Contractors’ Board.

28-11     4.  A contractor who violates any provision of this section:

28-12     (a) Shall be deemed to have violated the provisions of chapter

28-13  624 of NRS; and

28-14     (b) Is subject to any appropriate disciplinary action or

28-15  punishment that is authorized for a violation of the provisions of

28-16  chapter 624 of NRS.

28-17     Sec. 53. 1.  If a claimant attempts to sell a residence that is

28-18  or has been the subject of a cause of action for a constructional

28-19  defect, the claimant shall disclose, in writing, to any prospective

28-20  purchaser of the residence:

28-21     (a) All notices which the claimant has given to a contractor,

28-22  subcontractor, supplier or design professional regarding the

28-23  constructional defect that is or has been the subject of the cause of

28-24  action;

28-25     (b) All opinions which the claimant has obtained from experts

28-26  regarding the constructional defect that is or has been the subject

28-27  of the cause of action;

28-28     (c) The terms of any settlement, order or judgment relating to

28-29  the cause of action; and

28-30     (d) A detailed report of all repairs made to the residence by or

28-31  on behalf of the claimant as a result of the constructional defect

28-32  that is or has been the subject of the cause of action.

28-33     2.  The claimant shall provide the disclosure required by this

28-34  section:

28-35     (a) Not less than 30 days before the close of escrow for the sale

28-36  of the residence, if escrow is to close more than 30 days after the

28-37  execution of the sales agreement;

28-38     (b) Immediately upon the execution of the sales agreement, if

28-39  escrow is to close not more than 30 days after the execution of the

28-40  sales agreement; or

28-41     (c) Within 24 hours after sending written notice to a

28-42  contractor, subcontractor, supplier or design professional

28-43  pursuant to section 27 of this act, if the claimant sends such notice

28-44  after the execution of the sales agreement.

29-1      3.  Before taking any action on a claim for a constructional

29-2  defect pursuant to this chapter, the attorney for the claimant shall

29-3  notify the claimant in writing of the provisions of this section.

29-4      Sec. 54.  NRS 40.635 is hereby amended to read as follows:

29-5      40.635  1.  The provisions of NRS 40.600 to 40.695, inclusive

29-6  [:

29-7      1.  Apply] , apply to any claim for a constructional defect that

29-8  arises before, on or after July 1, 1995, [as the result of a

29-9  constructional defect, except a claim for personal injury or wrongful

29-10  death, if the claim is the subject of] and before the effective date of

29-11  this act, if the claimant:

29-12     (a) Has commenced an action [commenced] concerning the

29-13  claim pursuant to NRS 40.600 to 40.695, inclusive, on or after

29-14  July 1, 1995[.] , and before the effective date of this act; or

29-15     (b) Has provided notice of the claim to the contractor,

29-16  subcontractor, supplier or design professional pursuant to NRS

29-17  40.600 to 40.695, inclusive, before the effective date of this act.

29-18     2.  The provisions of NRS 40.600 to 40.695, inclusive:

29-19     (a) Prevail over any conflicting law otherwise applicable to the

29-20  claim or cause of action.

29-21     [3.] (b) Do not bar or limit any defense otherwise available

29-22  except as otherwise provided in those sections.

29-23     [4.] (c) Do not create a new theory upon which liability may be

29-24  based.

29-25     3.  The provisions of NRS 40.600 to 40.695, inclusive, do not

29-26  apply to:

29-27     (a) A claim for personal injury or wrongful death; or

29-28     (b) A claim that is subject to the provisions of sections 2 to 53,

29-29  inclusive, of this act.

29-30     Sec. 55.  NRS 113.135 is hereby amended to read as follows:

29-31     113.135  1.  Upon signing a sales agreement with the initial

29-32  purchaser of residential property that was not occupied by the

29-33  purchaser for more than 120 days after substantial completion of the

29-34  construction of the residential property, the seller shall:

29-35     (a) Provide to the initial purchaser a copy of NRS 11.202 to

29-36  11.206, inclusive, and [40.600 to 40. 695, inclusive;] sections 2 to

29-37  53, inclusive, of this act;

29-38     (b) Notify the initial purchaser of any soil report prepared for the

29-39  residential property or for the subdivision in which the residential

29-40  property is located; and

29-41     (c) If requested in writing by the initial purchaser not later than

29-42  5 days after signing the sales agreement, provide to the purchaser

29-43  without cost each report described in paragraph (b) not later than 5

29-44  days after the seller receives the written request.

30-1      2.  Not later than 20 days after receipt of all reports pursuant to

30-2  paragraph (c) of subsection 1, the initial purchaser may rescind the

30-3  sales agreement.

30-4      3.  The initial purchaser may waive his right to rescind the sales

30-5  agreement pursuant to subsection 2. Such a waiver is effective only

30-6  if it is made in a written document that is signed by the purchaser.

30-7      Sec. 56.  NRS 624.160 is hereby amended to read as follows:

30-8      624.160  1.  The Board is vested with all of the functions and

30-9  duties relating to the administration of this chapter.

30-10     2.  The Board shall:

30-11     (a) Carry out a program of education for customers of

30-12  contractors.

30-13     (b) Maintain and make known a telephone number for the public

30-14  to obtain information about self-protection from fraud in

30-15  construction and other information concerning contractors and

30-16  contracting.

30-17     3.  The Board may provide advisory opinions and take other

30-18  actions that are necessary for the effective administration of this

30-19  chapter and the regulations of the Board.

30-20     4.  The Board may exercise any powers granted to the Board

30-21  pursuant to this chapter in carrying out any duties assigned to the

30-22  Board pursuant to sections 2 to 53, inclusive, of this act.

30-23     Sec. 57.  This act becomes effective upon passage and

30-24  approval.

 

30-25  H