Home defect lawsuit limits advance in Nevada Senate

A Senate panel on Friday advanced a builder-backed bill redefining home defects and requiring Nevada homeowners to file notice and wait several months before suing over leaky roofs or cracked walls.

The Commerce and Labor Committee approved SB241, sought by builders and contractors who said it would reduce the number of home defects lawsuits and eventually lower their construction liability insurance rates.

SB241 would require homeowners with crooked doors and windows or other problems to issue a formal complaint to a builder. The homeowner could only file a lawsuit if the builder didn't fix the problem within five months or didn't respond to the complaint within three months.

The definition of construction defects also would be modified. It would block claims against contractors for "normal" wear and tear, settling or other deterioration.

The measure moved to the full Senate for a vote, though Commerce and Labor Chairman Randolph Townsend, R-Reno, said that if passed, it likely faces opposition in the Democrat-controlled Assembly.

"They're going to make changes, we're going to conference to find a solution," Townsend said. Similar legislation has died in past sessions.

SB241 won committee approval following two hearings in which opposing groups of homeowners argued for and against it. Both sides wore yellow T-shirts with black lettering.

"Safe Homes Nevada" activists shared tales of "nightmare" construction problems in the booming Las Vegas housing market. Group leader Dave Duritsa said the Legislature shouldn't set up obstacles to litigation. His North Las Vegas homeowner association was awarded $7.8 million by a jury in February after a defect claim against developer Beazer Homes.

Other homeowners in the "Coalition for Fairness in Construction" said the bill would help halt pushy southern Nevada lawyers who force homeowner associations into defect litigation.

"We have to absolutely protect the rights of homeowners," said Sen. Warren Hardy, R-Las Vegas, whose employer is part of the builder-backed coalition. "SB241 does that. They still have the full access to courts."

Hardy said the glut of home defect lawsuits in southern Nevada courts has raised insurance rates for builders, and that the bill -- along with other lawsuit reform -- would ensure the state is "competitive and attractive" to insurers.

Bob Maddox of the Nevada Trial Lawyers Association argued that there is no evidence of frivolous lawsuits or of homeowners suing before giving builders a chance to fix problems.

"We don't have a lawsuit problem, we have a construction defects problem," Maddox said.

Another home defect bill from Sen. Mike Schneider, R-Las Vegas, will be modified by the Senate panel to include elements of three measures that were discussed by the 2001 Legislature but not passed.

Schneider's SB273 will require builders or contractors to be notified in advance of a defect inspection by a homeowners association.