Effect on the State or on Industrial Insurance: No.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to actions concerning property; revising the provisions governing actions concerning 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:
Section 1 Chapter 40 of NRS is hereby amended by adding thereto the provisions set forth as sections 2, 3 and 4 of this act.
Sec. 2 "Complex matter" means a claim:
1. In which the claimant is a representative of a homeowner's association that is responsible for a residence or for an appurtenance and is acting within the scope of his duties pursuant to chapter 116 or 117 of NRS; or
2. That involves five or more separate residences at the time the action is commenced or at any time during the subsequent action.
Sec. 3 Notwithstanding any other provision of law:
1. A claimant shall, within 10 days after commencing an action against a contractor, disclose to the contractor all information about any homeowner's warranty that is applicable to the claim.
2. The contractor shall, no later than 10 days after any settlement offer is made pursuant to this chapter, disclose to the claimant any information about insurance agreements that may be obtained by discovery pursuant to rule 26(b)(2) of the Nevada Rules of Civil Procedure. Such disclosure does not affect the admissibility at trial of the information disclosed.
3. Except as otherwise provided in subsection 4, if either party fails to provide the information required pursuant to subsection 1 or 2 within the time allowed, the other party may petition the court to compel production of the information. Upon receiving such a petition, the court may order the party to produce the required information and may award the petitioning party reasonable attorney's fees and costs incurred in petitioning the court pursuant to this subsection.
4. The parties may agree to an extension of time to produce the information required pursuant to this section.
5. For the purposes of this section, "information about insurance agreements" is limited to any declaration sheets, endorsements and contracts of insurance issued to the contractor from the commencement of construction of the residence of the claimant to the date on which the request for the information is made and does not include information concerning any disputes between the contractor and an insurer or information concerning any reservation of rights by an insurer.
Sec. 4 1. Upon petition by a party:
(a) The court shall give preference in setting a date for the trial of an action commenced pursuant to NRS 40.600 to 40.695, inclusive, this section and sections 2 and 3 of this act; and
(b) The court may assign an action commenced pursuant to NRS 40.600 to 40.695, inclusive, this section and sections 2 and 3 of this act to a senior judge.
2. If the action is assigned to a senior judge upon petition by a party:
(a) Any additional expenses caused by the assignment must be borne equally by each party involved; or
(b) The judge may distribute any additional expenses among the parties as he deems appropriate.
Sec. 5 NRS 40.600 is hereby amended to read as follows:
40.600As used in NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act, unless the context otherwise requires, the words and terms defined in NRS 40.605 to 40.630, inclusive, and section 2 of this act have the meanings ascribed to them in those sections.
Sec. 6 NRS 40.605 is hereby amended to read as follows:
40.605"Appurtenance" means a structure, installation, facility or amenity that is appurtenant to a residence, but is not a part of the dwelling unit. The term includes, without limitation, the parcel of real property, recreational facilities, golf courses, walls, sidewalks, driveways, landscaping and other structures, installations, facilities and amenities associated with a residence.
Sec. 7 NRS 40.610 is hereby amended to read as follows:
40.610"Claimant" means an owner of a residence or appurtenance or a representative of a homeowner's association that is responsible for a residence or appurtenance [.] and is acting within the scope of his duties pursuant to chapter 116 or 117 of NRS.
Sec. 8 NRS 40.620 is hereby amended to read as follows:
40.620"Contractor" means a person who, with or without a license issued pursuant to chapter 624 of NRS, by himself or through his agents, employees or subcontractors:
1. [Constructs,] Develops, constructs, alters, repairs, improves or landscapes a residence, appurtenance or any part thereof; [or]
2. Develops a site for a residence, appurtenance or any part thereof; or
3. Sells a residence or appurtenance, any part of which the person, by himself or through his agents, employees or subcontractors, has developed, constructed, altered, repaired, improved or landscaped.
[The term includes a risk retention group which operates in compliance with chapter 695E of NRS and insures all or any part of a contractor's liability for the cost to repair a residential constructional defect.]
Sec. 9 NRS 40.625 is hereby amended to read as follows:
40.625"Homeowner's warranty" means a warranty or [contract] policy of insurance [for the protection of a homeowner which is issued by an insurer authorized to issue such a warranty or contract in this state or issued] :
1. Issued or purchased by or on behalf of a contractor [.] for the protection of a claimant; or
2. Purchased by a claimant pursuant to NRS 690B.100 to 690B.180, inclusive.
The term includes a warranty contract issued by a risk retention group that operates in compliance with chapter 695E of NRS and insures all or any part of the liability of a contractor for the cost to repair a constructional defect in a residence.
Sec. 10 NRS 40.630 is hereby amended to read as follows:
40.630"Residence" means [a dwelling designed for not more than four families or a unit in such a] any dwelling in which title to the individual units is transferred to the owners . [pursuant to chapter 116 or 117 of NRS.]
Sec. 11 NRS 40.635 is hereby amended to read as follows:
40.635NRS 40.600 to 40.695, inclusive [:] , and sections 2, 3 and 4 of this act:
1. Apply to [a claim or cause of action which arises after] any claim that arises before, on or after July 1, 1995, [to recover damages resulting, directly or indirectly, from] as the result of a constructional defect, except a claim for personal injury or wrongful death, [and prevail] if the claim is the subject of an action commenced on or after July 1, 1995.
2. Prevail over any conflicting law otherwise applicable to the claim or cause of action.
[2.] 3. Do not bar or limit any defense otherwise available except as otherwise provided in those sections.
4. Do not create a new theory upon which liability may be based.
Sec. 12 NRS 40.640 is hereby amended to read as follows:
40.640In a claim [or cause of action] to recover damages resulting from a constructional defect, a contractor is liable for his acts or omissions or the acts or omissions of his agents, employees or subcontractors and is not liable for any damages caused by:
1. The acts or omissions of a person other than the contractor or his agent, employee or subcontractor;
2. The failure of a person other than the contractor or his agent, employee or subcontractor to take reasonable action to reduce the damages or maintain the residence;
3. Normal wear, tear or deterioration;
4. Normal shrinkage, swelling, expansion or settlement; or
5. Any constructional defect disclosed to an owner before his purchase of the residence, if the disclosure was provided in [a] language that is understandable and was written in underlined and boldfaced type with capital letters.
Sec. 13 NRS 40.645 is hereby amended to read as follows:
40.645Except as otherwise provided in this section and NRS 40.670:
1. At least 60 days before a claimant [brings a cause of] commences action against a contractor for damages arising from a constructional defect, the claimant must give written notice by certified mail, return receipt requested, to the contractor, at the contractor's last known address, specifying in reasonable detail the defects or any damages or injuries to each residence or each unit within a multiple unit residence that [are] is the subject of the [complaint.] claim. The notice must describe in reasonable detail the cause of the defects if the cause is known, and the nature and extent that is known of the damage or injury resulting from the defects. In a complex matter, an expert opinion concerning the cause of the defects and the nature and extent of the damage or injury resulting from the defects based on a representative sample of the residences or of the units of each multiple unit residence involved in the action satisfies the requirements of this section. During the 35-day period after the contractor receives the notice, on his written request, the contractor is entitled to inspect the property that is the subject of the [complaint] claim to determine the nature and cause of the defect, damage or injury and the nature and extent of repairs necessary to remedy the defect. The contractor shall, before making the inspection, provide reasonable notice of the inspection and must make the inspection at a reasonable time. The contractor may take reasonable steps to establish the existence of the defect.
2. If the residence is covered by a homeowner's warranty , [or contract of insurance issued by an insurer authorized by this state to issue such a warranty or contract,] a claimant must diligently pursue a claim under the warranty or contract.
[2.] 3. Within 45 days after the contractor receives the notice, the contractor may make a written offer of settlement to the claimant. The offer:
(a) Must be served to the claimant by certified mail, return receipt requested, at the claimant's last known address.
(b) Must respond to each constructional defect set forth in the claimant's notice, and describe in reasonable detail the cause of the defect, if known, the nature and extent of the damage or injury resulting from the defect, and, unless the offer is limited to a proposal for monetary compensation, the method, adequacy and estimated cost of the proposed repair.
(c) May include:
(1) A proposal for monetary compensation.
(2) If the contractor is licensed to make the repairs, an agreement by the contractor to make the repairs.
(3) An agreement by the contractor to cause the repairs to be made, at the contractor's expense, by another contractor who is licensed to make the repairs, bonded and insured.
The repairs must be made within 45 days after the contractor receives written notice of acceptance of the offer, unless completion is delayed by the claimant or by other events beyond the control of the contractor. The claimant and the contractor may agree in writing to extend the periods prescribed by this section.
4. The periods provided in subsections 1 and 3 must be extended by 60 days if the claim is a complex matter. The parties may stipulate to a further extension.
5. Not later than 15 days before the mediation required pursuant to NRS 40.680 and upon providing 15 days' notice, each party shall provide the other party, or shall make a reasonable effort to assist the other party to obtain, all relevant reports, photos, correspondence, plans, specifications, warranties, contracts, subcontracts, work orders for repair, videotapes and soil and other engineering reports that are not privileged.
6. If the claimant is a representative of a homeowner's association, the association shall submit any offer of settlement made by the contractor to each member of the association. The offer may contain arguments concerning the existence, nature and scope of the constructional defects and concerning the reasonableness of the settlement offer. The homeowner's association need not forward to the members of the association any opinion of the contractor concerning the cost of litigation or the likelihood of success at trial or on appeal.
Sec. 14 NRS 40.650 is hereby amended to read as follows:
40.6501. If a claimant unreasonably rejects a reasonable written offer of settlement made pursuant to NRS 40.645 or does not permit the contractor or independent contractor a reasonable opportunity to repair the defect pursuant to an accepted offer of settlement and thereafter [files a cause of] commences an action governed by NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act, the court in which the [cause of] action is [filed] commenced may:
(a) Deny the claimant's attorney's fees and costs; and
(b) Award attorney's fees and costs to the contractor.
Any sums paid under a homeowner's warranty, other than sums paid in satisfaction of claims that are collateral to any coverage issued to or by the contractor, must be deducted from any recovery.
2. If a contractor fails to [make a reasonable] :
(a) Make an offer of settlement [pursuant to NRS 40.645 or fails to complete,] ;
(b) Make a good faith response to the claim asserting no liability;
(c) Complete, in a good and workmanlike manner, the repairs specified in an accepted offer [,] ;
(d) Agree to a mediator or accept the appointment of a mediator pursuant to NRS 40.680; or
(e) Participate in mediation,
the limitations on damages and defenses to liability provided in NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act do not apply [.] and the claimant may commence an action without satisfying any other requirement of NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act.
3. If coverage under a homeowner's warranty [or contract of insurance] is denied by an insurer in bad faith, the homeowner and the contractor have a right of action for the sums that would have been paid if coverage had been provided, plus reasonable attorney's fees and costs.
Sec. 15 NRS 40.655 is hereby amended to read as follows:
40.6551. Except as otherwise provided in NRS 40.650, in a claim [or cause of action] governed by NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act, the claimant may recover only the following damages to the extent proximately caused by a constructional defect:
(a) Any reasonable attorney's fees;
(b) The reasonable cost of any repairs already made that were necessary and of any repairs yet to be made that are necessary to cure any constructional defect that the contractor failed to cure and the reasonable expenses of temporary housing reasonably necessary during the repair;
(c) The reduction in market value of the residence or accessory structure, if any, to the extent the reduction is because of structural failure;
(d) The loss of the use of all or any part of the residence ; [during the time of the repair;]
(e) The reasonable value of any other property damaged by the constructional defect;
(f) Any additional costs reasonably incurred by the claimant, including , but not limited to, any costs and fees incurred for [hiring experts reasonably necessary to ascertain] the retention of experts to:
(1) Ascertain the nature and extent of the constructional [defect; and] defects;
(2) Evaluate appropriate corrective measures to estimate the value of loss of use; and
(3) Estimate the value of loss of use, the cost of temporary housing and the reduction of market value of the residence.
(g) Any interest provided by statute.
2. The amount of any attorney's fees awarded pursuant to this section must be approved by the court.
3. If a contractor complies with the provisions of NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act, the claimant may not recover from the contractor, as a result of the constructional defect, anything other than that which is provided pursuant to NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act.
4. As used in this section, "structural failure" means physical damage to the load-bearing portion of a residence or appurtenance caused by a failure of the load-bearing portion of the residence or appurtenance.
Sec. 16 NRS 40.665 is hereby amended to read as follows:
40.665In addition to any other method provided for settling a claim pursuant to NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act, a contractor may, pursuant to a written agreement entered into with a claimant, settle a claim by repurchasing the claimant's residence and the real property upon which it is located. The agreement may include [, without limitation,] provisions which reimburse the claimant for:
1. The market value of the residence as if no constructional defect existed, except that if a residence is less than 2 years of age and was purchased from the contractor against whom the claim is brought, the market value is the price at which the residence was sold to the claimant;
2. The value of any improvements made to the property by a person other than the contractor;
[2.] 3. Reasonable attorney's fees and fees for experts; and
[3.] 4. Any costs, including costs and expenses for moving and costs, points and fees for loans.
Any offer of settlement made that includes the items listed in this section shall be deemed reasonable for the purposes of subsection 1 of NRS 40.650.
Sec. 17 NRS 40.670 is hereby amended to read as follows:
40.6701. A contractor who receives written notice of a constructional defect resulting from work performed by the contractor or his agent, employee or subcontractor which creates an imminent threat to the health or safety of the inhabitants of the residence shall take reasonable steps to cure the defect as soon as practicable. The contractor shall not cure the defect by making any repairs for which he is not licensed or by causing any repairs to be made by a person who is not licensed to make those repairs. If the contractor fails to cure the defect in a reasonable time, the owner of the residence may have the defect cured and may recover from the contractor the reasonable cost of the repairs plus reasonable attorney's fees and costs in addition to any other damages recoverable under any other law.
2. A contractor who does not cure a defect pursuant to this section because he has determined, in good faith and after a reasonable inspection, that there is not an imminent threat to the health or safety of the inhabitants is not liable for attorney's fees and costs pursuant to this section, except that if a building inspector employed by a governmental body with jurisdiction certifies that there is an imminent threat to the health and safety of the inhabitants of the residence, the contractor is subject to the provisions of subsection 1.
Sec. 18 NRS 40.680 is hereby amended to read as follows:
40.6801. [Before a complaint in a cause of action governed] Except as otherwise provided in this chapter, before an action based on a claim governed by NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act, may be [filed] commenced in court, the matter must be submitted to mediation, unless mediation is waived in writing by the contractor and the claimant.
2. The claimant and contractor must select a mediator by agreement. If the claimant and contractor fail to agree upon a mediator within 45 days after a mediator is first selected by the claimant, either party may petition the American Arbitration Association, the Nevada Arbitration Association, Nevada Dispute Resolution Services or any other mediation service acceptable to the parties for the appointment of a mediator. A mediator so appointed may discover only those documents or records which are necessary to conduct the mediation. The mediator shall convene the mediation within 60 days after the matter is submitted to him, unless the parties agree to extend the time. [The] Except in a complex matter, the claimant shall, before the mediation begins, deposit $50 with the mediation service and the contractor shall deposit with the [mediator before mediation begins the entire] mediation service the remaining amount estimated by the [mediator] mediation service as necessary to pay the [salary] fees and expenses of the mediator [,] for the first session of mediation, and the contractor shall deposit additional amounts demanded by the [mediator] mediation service as incurred for that purpose. [The] In a complex matter, each party shall share equally in the deposits estimated by the mediation service. Unless otherwise agreed, the total fees for each day of mediation and the mediator must not exceed $750 per day.
3. [If, after undergoing mediation pursuant to subsection 2,] If the parties do not reach an agreement concerning the matter [,] during mediation or if the contractor fails to pay the required fees and appear, the claimant may [file his complaint] commence his action in court and:
(a) The reasonable costs and fees of the mediation are recoverable by the prevailing party as costs of the action.
(b) [The claimant] Either party may petition the court in which the [complaint is filed] action is commenced for the appointment of a special master.
4. A special master appointed pursuant to subsection 3 may:
(a) Review all pleadings, papers or documents filed with the court concerning the [cause of] action.
(b) Coordinate the discovery of any books, records, papers or other documents by the parties, including the disclosure of witnesses and the taking of the deposition of any party.
(c) Order any inspections on the site of the property by a party and any consultants or experts of a party.
(d) Order settlement conferences and attendance at those conferences by any representative of the insurer of a party.
(e) Require any attorney representing a party to provide statements of legal and factual issues concerning the [cause of] action.
(f) Refer to the judge who appointed him or to the presiding judge of the court in which the [cause of action is filed] action is commenced any matter requiring assistance from the court.
The special master shall not, unless otherwise agreed by the parties, personally conduct any settlement conferences or engage in any ex parte meetings regarding the action.
5. Upon application by a party to the court in which the [cause of action is filed,] action is commenced, any decision or other action taken by a special master appointed pursuant to this section may be appealed to the court for a [trial de novo.] decision.
6. A report issued by a mediator or special master that indicates that either party has failed to appear before him or to mediate in good faith is admissible in the [cause of] action, but a statement or admission made by either party in the course of mediation is not admissible.
Sec. 19 NRS 40.685 is hereby amended to read as follows:
40.6851. Except as otherwise provided in subsection 2, a written waiver or settlement agreement executed by a claimant after a contractor has corrected or otherwise repaired a constructional defect does not bar a [cause of action] claim for the constructional defect if it is determined that the contractor failed to correct or repair the defect properly.
2. The provisions of subsection 1 do not apply to any written waiver or settlement agreement described in subsection 1 , unless:
(a) The claimant has obtained the opinion of an expert concerning the constructional defect;
(b) The claimant has provided the contractor with a written notice of the defect pursuant to NRS 40.645 and a copy of the expert's opinion; and
(c) The claimant and the contractor have complied with the requirements for inspection and repair as provided in NRS 40.600 to 40.695, inclusive [.] , and sections 2, 3 and 4 of this act.
3. If a claimant does not prevail in any [cause of] action which is not barred pursuant to this section, the court may:
(a) Deny the claimant's attorney's fees, fees for an expert witness or costs; and
(b) Award attorney's fees and costs to the contractor.
Sec. 20 NRS 40.690 is hereby amended to read as follows:
40.690[No claim or cause of action]
1. A claim governed by NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act may not be brought by a claimant or contractor against any third parties, including a government, governmental agency or political subdivision of a government, during the period in which a claim [or cause of action] for a constructional defect is being settled, mediated or otherwise resolved pursuant to NRS 40.600 to 40.695, inclusive [.] , and sections 2, 3 and 4 of this act. The settlement of such a claim [or cause of action] does not affect the rights or obligations of any person who is not a party to the settlement, and the failure to reach such a settlement does not affect the rights or obligations of the claimant or contractor in any action brought by the claimant or contractor against a third party.
2. A contractor may require any third party except a government, governmental agency or political subdivision of a government to appear and participate in proceedings pursuant to NRS 40.600 to 40.695, inclusive, and subsections 2, 3 and 4 of this act as if the third party were a contractor.
Sec. 21 NRS 40.695 is hereby amended to read as follows:
40.695[Any]
1. All statutes of limitation or repose applicable to a claim [or cause of action] based on a constructional defect governed by NRS 40.600 to 40.695, inclusive, and sections 2, 3 and 4 of this act are tolled from the time [a claimant provides] notice of the [claimed defect, damage or injury to the contractor pursuant to NRS 40.645] claim is given, until 30 days after mediation is concluded or waived in writing pursuant to NRS 40.680.
2. Tolling under this section applies to a third party regardless of whether the party is required to appear in the proceeding.
Sec. 22 The amendatory provisions of this act apply to actions that are commenced before, on or after October 1, 1997.