Home Defect Bill Divides Nevada Lawmakers

May 18, 2009

Nevada senators and sssembly members are battling over a construction defect bill that has turned into one of the most contentious issues of the 2009 Nevada Legislature, now in its final weeks.

Senators voted 19-1 in mid-April for SB349, which would curtail homeowner lawsuits against builders and subcontractors — a priority for the powerful but struggling construction industry and a target for critics who say it unfairly limits homebuyers’ rights.

Since then, SB349 has been bottled up in the Assembly Judiciary Committee, chaired by Assemblyman Bernie Anderson, D-Sparks. Anderson has warned his panel members that some of their bills might die on a today’s deadline for action in Senate Judiciary, chaired by Sen. Terry Care, D-Las Vegas.

Among those Assembly-approved measures in Senate Judiciary is AB495, which would loosen caps on medical malpractice awards. It’s sought by trial lawyers — who oppose the construction defect bill.

Current construction defect law offers a process to avert full-blown litigation, known as Chapter 40 for its place in Nevada statutes. Builders and subcontractors say the current system is flooded with bogus claims and exorbitant legal fees and often impedes home repairs.

Chapter 40 was a compromise passed during the 1990s building boom to create a process to resolve disputes before litigation. Under it, homeowners who sue can’t claim noneconomic damages, such as emotional distress or punitive damages.

On the other hand, builders are obligated to pay the homeowners’ costs of bringing lawsuits, provided homeowners agree to reasonable settlements.

The proposed legislation would more narrowly define a construction defect. To qualify as defective, a home would have to present “unreasonable risk of injury to a person or property.” Alternately, it would have to meet all of the following criteria: violate building codes, cause damage to the property, and be built in a manner not “good and workmanlike” according to industry standards.

Currently, just one of those criteria — violating a building code — needs to exist to mark a home as defective and qualify it for the Chapter 40 process.

The legislation would also eliminate a provision in the law that allows plaintiffs to collect “reasonable attorney’s fees.”

Topics Legislation Homeowners Construction Nevada

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