Nevada lawmakers take up home defect inspection limits

State Sen. Mike Schneider clicked through dramatic photographs showing what he called obvious insurance fraud on Thursday in pitching his "consumer protection" plan to limit inspections of home defects.

The photos show defect inspectors at a Las Vegas townhouse complex planting slipped tiles and breaking others while walking on a red tile roof. In others, a high-pressure pump sprays upward causing a leak in a window.

Schneider says the inspectors were hired by lawyers pushing a homeowner association to sue builders. He calls the practice common in fast-growing southern Nevada.

"A story is spun and woven to scare these people into construction defect litigation," he told the Senate Commerce and Labor Committee during its review of SB273, requiring builders or contractors to be present during any defect inspection.

The bill was picked apart and called unenforceable by the Senate panel and Bob Maddox of the Nevada Trial Lawyers Association. Maddox said such fraud was rare and should be prosecuted as such. He called the measure "awkward."

But Schneider vowed to return with amendments allowing homeowners to send notification of an inspection to the builder, instead of requiring them to be there. He also may limit its scope to require builders on-scene only when lawsuits from homeowner associations are pending.

The effort won support from Assembly Minority Leader Lynn Hettrick, who said a lawyer visited his condominium development last year and found several defects in an effort to force a lawsuit.

"Once the inspection was done, it was either 'You'll sue now or fix it yourself,"' said Hettrick, R-Gardnerville.

Schneider has proposed another "consumer protection" home defects bill, SB371, which would screen out claims through a state panel and reduce big legal settlements.

"Once they get to court, you just hit the money pool," Schneider said. "It's like hitting Megabucks."

The Senate panel took no action on either bill.

Also on Thursday, a more lawyer-friendly home defects measure was introduced in the Assembly.

Among other changes, AB446 would cut down on builders' ability to sue their subcontractors and require a court to revoke the license of a contractor who won't repair defects. It was referred to the Assembly Judiciary Committee.