Assembly Bill No. 446–Committee on Judiciary

 

March 20, 2003

____________

 

Referred to Committee on Judiciary

 

SUMMARY—Revises certain provisions relating to constructional defects, dissolution of corporations and limited-liability companies and commencement of civil actions by unit-owners’ associations. (BDR 3‑869)

 

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 civil actions; providing certain limitations on the ability of a contractor to seek indemnification from
a subcontractor who was not responsible for a constructional defect; requiring a contractor who repairs a constructional defect to pay for an independent person to supervise and inspect the repair and to provide a payment bond and performance bond to the claimant under certain circumstances; providing that a contract or agreement that limits or alters the damages that may be recovered for a constructional defect is void; requiring a court to revoke the license of a contractor if the contractor fails to correct or repair a constructional defect under certain circumstances; providing that a release or covenant not to sue given to a tortfeasor discharges the tortfeasor from liability for express indemnity under certain circumstances; providing that the dissolution of a corporation or limited-liability company does not impair certain claims, remedies or causes of action relating to a constructional defect; prohibiting a seller or contractor from including in certain contracts or agreements for the purchase and sale of real property a provision requiring binding or nonbinding arbitration; revising the provisions governing the commencement of a civil action by a unit-

owners’ association; 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. NRS 38.219 is hereby amended to read as follows:

1-2  38.219  1.  [An] Except as otherwise provided in sections 13

1-3  and 15 of this act, an agreement contained in a record to submit to

1-4  arbitration any existing or subsequent controversy arising between

1-5  the parties to the agreement is valid, enforceable and irrevocable

1-6  except upon a ground that exists at law or in equity for the

1-7  revocation of a contract.

1-8  2.  The court shall decide whether an agreement to arbitrate

1-9  exists or a controversy is subject to an agreement to arbitrate.

1-10      3.  An arbitrator shall decide whether a condition precedent to

1-11  arbitrability has been fulfilled and whether a contract containing a

1-12  valid agreement to arbitrate is enforceable.

1-13      4.  If a party to a judicial proceeding challenges the existence

1-14  of, or claims that a controversy is not subject to, an agreement to

1-15  arbitrate, the arbitral proceeding may continue pending final

1-16  resolution of the issue by the court, unless the court otherwise

1-17  orders.

1-18      Sec. 2.  NRS 38.221 is hereby amended to read as follows:

1-19      38.221  1.  On motion of a person showing an agreement to

1-20  arbitrate and alleging another person’s refusal to arbitrate pursuant

1-21  to the agreement:

1-22      (a) If the refusing party does not appear or does not oppose the

1-23  motion, the court shall order the parties to arbitrate; and

1-24      (b) If the refusing party opposes the motion, the court shall

1-25  proceed summarily to decide the issue and order the parties to

1-26  arbitrate unless it finds that there is no enforceable agreement to

1-27  arbitrate.

1-28      2.  On motion of a person alleging that an arbitral proceeding

1-29  has been initiated or threatened but that there is no agreement to

1-30  arbitrate[,] or that an agreement to arbitrate is void pursuant

1-31  to section 13 or 15 of this act, the court shall proceed summarily to

1-32  decide the issue. If the court finds that there is an enforceable

1-33  agreement to arbitrate, it shall order the parties to arbitrate.

1-34      3.  If the court finds that there is no enforceable agreement[,]

1-35  or that an agreement to arbitrate is void pursuant to section 13 or

1-36  15 of this act, it may not, pursuant to subsection 1 or 2, order the

1-37  parties to arbitrate.

2-1  4.  The court may not refuse to order arbitration because the

2-2  claim subject to arbitration lacks merit or grounds for the claim have

2-3  not been established.

2-4  5.  If a proceeding involving a claim referable to arbitration

2-5  under an alleged agreement to arbitrate is pending in court, a

2-6  motion under this section must be made in that court. Otherwise, a

2-7  motion under this section may be made in any court as provided in

2-8  NRS 38.246.

2-9  6.  If a party makes a motion to the court to order arbitration,

2-10  the court on just terms shall stay any judicial proceeding that

2-11  involves a claim alleged to be subject to the arbitration until the

2-12  court renders a final decision under this section.

2-13      7.  If the court orders arbitration, the court on just terms shall

2-14  stay any judicial proceeding that involves a claim subject to the

2-15  arbitration. If a claim subject to the arbitration is severable, the court

2-16  may limit the stay to that claim.

2-17      Sec. 3.  NRS 38.241 is hereby amended to read as follows:

2-18      38.241  1.  Upon motion to the court by a party to an arbitral

2-19  proceeding, the court shall vacate an award made in the arbitral

2-20  proceeding if:

2-21      (a) The award was procured by corruption, fraud or other undue

2-22  means;

2-23      (b) There was:

2-24          (1) Evident partiality by an arbitrator appointed as a neutral

2-25  arbitrator;

2-26          (2) Corruption by an arbitrator; or

2-27          (3) Misconduct by an arbitrator prejudicing the rights of a

2-28  party to the arbitral proceeding;

2-29      (c) An arbitrator refused to postpone the hearing upon showing

2-30  of sufficient cause for postponement, refused to consider evidence

2-31  material to the controversy, or otherwise conducted the hearing

2-32  contrary to NRS 38.231, so as to prejudice substantially the rights of

2-33  a party to the arbitral proceeding;

2-34      (d) An arbitrator exceeded his powers;

2-35      (e) There was no agreement to arbitrate[,] or the agreement to

2-36  arbitrate was void pursuant to section 13 or 15 of this act, unless

2-37  the movant participated in the arbitral proceeding without raising the

2-38  objection under subsection 3 of NRS 38.231 not later than the

2-39  beginning of the arbitral hearing; or

2-40      (f) The arbitration was conducted without proper notice of the

2-41  initiation of an arbitration as required in NRS 38.223 so as to

2-42  prejudice substantially the rights of a party to the arbitral

2-43  proceeding.

2-44      2.  A motion under this section must be made within 90 days

2-45  after the movant receives notice of the award pursuant to NRS

3-1  38.236 or within 90 days after he receives notice of a modified or

3-2  corrected award pursuant to NRS 38.237, unless he alleges that the

3-3  award was procured by corruption, fraud or other undue means, in

3-4  which case the motion must be made within 90 days after the

3-5  ground is known or by the exercise of reasonable care would have

3-6  been known by the movant.

3-7  3.  If the court vacates an award on a ground other than that set

3-8  forth in paragraph (e) of subsection 1, it may order a rehearing. If

3-9  the award is vacated on a ground stated in paragraph (a) or (b) of

3-10  subsection 1, the rehearing must be before a new arbitrator. If the

3-11  award is vacated on a ground stated in paragraph (c), (d) or (f) of

3-12  subsection 1, the rehearing may be before the arbitrator who made

3-13  the award or his successor. The arbitrator must render the decision

3-14  in the rehearing within the same time as that provided in subsection

3-15  2 of NRS 38.236 for an award.

3-16      4.  If the court denies a motion to vacate an award, it shall

3-17  confirm the award unless a motion to modify or correct the award is

3-18  pending.

3-19      Sec. 4.  NRS 40.640 is hereby amended to read as follows:

3-20      40.640  1.  In a claim to recover damages resulting from a

3-21  constructional defect, a contractor is liable for his acts or omissions

3-22  or the acts or omissions of his agents, employees or subcontractors

3-23  and is not liable for any damages caused by:

3-24      [1.] (a) The acts or omissions of a person other than the

3-25  contractor or his agent, employee or subcontractor;

3-26      [2.] (b) The failure of a person other than the contractor or his

3-27  agent, employee or subcontractor to take reasonable action to reduce

3-28  the damages or maintain the residence;

3-29      [3.] (c) Normal wear, tear or deterioration;

3-30      [4.] (d) Normal shrinkage, swelling, expansion or settlement; or

3-31      [5.] (e) Any constructional defect disclosed to an owner before

3-32  his purchase of the residence, if the disclosure was provided in

3-33  language that is understandable and was written in underlined and

3-34  boldfaced type with capital letters.

3-35      2.  A contractor may not seek indemnification from a

3-36  subcontractor for a constructional defect which was caused

3-37  entirely by a person other than the subcontractor unless the

3-38  subcontractor concealed the constructional defect and the

3-39  contractor demonstrates that the subcontractor:

3-40      (a) Had actual knowledge of the constructional defect; and

3-41      (b) Failed to provide a notice of the constructional defect to

3-42  the contractor or any party seeking to enforce or otherwise avail

3-43  himself of the provisions of the contract.

3-44  Any provision of a contract which conflicts with the provisions of

3-45  this subsection is void.

4-1  Sec. 5.  NRS 40.645 is hereby amended to read as follows:

4-2  40.645  Except as otherwise provided in this section and NRS

4-3  40.670:

4-4  1.  For a claim that is not a complex matter, at least 60 days

4-5  before a claimant commences anaction against a contractor for

4-6  damages arising from a constructional defect, the claimant must

4-7  give written notice by certified mail, return receipt requested, to the

4-8  contractor, at the contractor’s last known address, specifying in

4-9  reasonable detail the defects or any damages or injuries to each

4-10  residence or appurtenance that is the subject of the claim. The notice

4-11  must describe in reasonable detail the cause of the defects if the

4-12  cause is known, the nature and extent that is known of the damage

4-13  or injury resulting from the defects and the location of each defect

4-14  within each residence or appurtenance to the extent known. An

4-15  expert opinion concerning the cause of the defects and the nature

4-16  and extent of the damage or injury resulting from the defects based

4-17  on a representative sample of the components of the residences and

4-18  appurtenances involved in the action satisfies the requirements of

4-19  this section.During the 45‑day period after the contractor receives

4-20  the notice, on his written request, the contractor is entitled to inspect

4-21  the property that is the subject of the claim to determine the nature

4-22  and cause of the defect, damage or injury and the nature and extent

4-23  of repairs necessary to remedy the defect. The contractor shall,

4-24  before making the inspection, provide reasonable notice of the

4-25  inspection and shall make the inspection at a reasonable time.The

4-26  contractor may take reasonable steps to establish the existence of

4-27  the defect.

4-28      2.  If a residence or appurtenance that is the subject of the claim

4-29  is covered by a homeowner’swarranty that is purchased by or on

4-30  behalf of a claimant pursuant to NRS 690B.100 to 690B.180,

4-31  inclusive, a claimant shall diligently pursue a claim under the

4-32  contract.

4-33      3.  Within 60 days after the contractor receives the notice, the

4-34  contractor shall make a written response to the claimant. The

4-35  response:

4-36      (a) Must be served to the claimant by certified mail, return

4-37  receipt requested, at the claimant’s last known address.

4-38      (b) Must respond to each constructional defect set forth in the

4-39  claimant’s notice, and describe in reasonable detail the cause of the

4-40  defect, if known, the nature and extent of the damage or injury

4-41  resulting from the defect, and, unless the response is limited to a

4-42  proposal for monetary compensation, the method, adequacy and

4-43  estimated cost of any proposed repair.

4-44      (c) May include:

5-1       (1) A proposal for monetary compensation, which may

5-2  include a contribution from a subcontractor.

5-3       (2) If the contractor or his subcontractor is licensed to make

5-4  the repairs, an agreement by the contractor or subcontractor to make

5-5  the repairs.

5-6       (3) An agreement by the contractor to cause the repairs to be

5-7  made, at the [contractor’s expense,] expense of the contractor, by

5-8  another contractor who is licensed to make the repairs, bonded and

5-9  insured.

5-10  The repairs must be made within 45 days after the contractor

5-11  receives written notice of acceptance of the response, unless

5-12  completion is delayed by the claimant or by other events beyond the

5-13  control of the contractor, or timely completion of the repairs is not

5-14  reasonably possible. The claimant and the contractor may agree in

5-15  writing to extend the periods prescribed by this section.

5-16      4.  A contractor who repairs or causes a repair to be made of a

5-17  constructional defect pursuant to this section shall:

5-18      (a) Pay for an independent person to supervise and inspect the

5-19  repair. The independent person must be selected by the claimant

5-20  and must have the appropriate license and qualifications.

5-21      (b) Provide a payment bond and a performance bond to the

5-22  claimant in an amount which is not less than 1 1/2 times the

5-23  market value of the proposed repair. The market value of any

5-24  proposed repair must be determined by averaging three bids for

5-25  the proposed repair, which must be obtained by the contractor

5-26  from independent contractors who are appropriately licensed,

5-27  bonded and insured to perform the proposed repair.

5-28      5.  Not later than 15 days before the mediation required

5-29  pursuant to NRS 40.680 and upon providing 15 days’ notice, each

5-30  party shall provide the other party, or shall make a reasonable effort

5-31  to assist the other party to obtain, all relevant reports, photos,

5-32  correspondence, plans, specifications, warranties, contracts,

5-33  subcontracts, work orders for repair, videotapes, technical reports,

5-34  soil and other engineering reports and other documents or materials

5-35  relating to the claim that are not privileged.

5-36      [5.] 6. If the claimant is a representative of a homeowner’s

5-37  association, the association shall submit any response made by the

5-38  contractor to each member of the association.

5-39      [6.] 7. As used in this section, “subcontractor” means a

5-40  contractor who performs work on behalf of another contractor in the

5-41  construction of a residence or appurtenance.

5-42      Sec. 6.  NRS 40.655 is hereby amended to read as follows:

5-43      40.655  1.  Except as otherwise provided in NRS 40.650,

5-44  40.667 and 40.670, in a claim governed by NRS 40.600 to 40.695,

6-1  inclusive, the claimant may recover only the following damages to

6-2  the extent proximately caused by a constructional defect:

6-3  (a) Any reasonable attorney’s fees;

6-4  (b) The reasonable cost of any repairs already made that were

6-5  necessary and of any repairs yet to be made that are necessary to

6-6  cure any constructional defect that the contractor failed to cure and

6-7  the reasonable expenses of temporary housing reasonably necessary

6-8  during the repair;

6-9  (c) The reduction in market value of the residence or accessory

6-10  structure, if any, to the extent the reduction is because of structural

6-11  failure;

6-12      (d) The loss of the use of all or any part of the residence;

6-13      (e) The reasonable value of any other property damaged by the

6-14  constructional defect;

6-15      (f) Any additional costs reasonably incurred by the claimant,

6-16  including, but not limited to, any costs and fees incurred for the

6-17  retention of experts to:

6-18          (1) Ascertain the nature and extent of the constructional

6-19  defects;

6-20          (2) Evaluate appropriate corrective measures to estimate the

6-21  value of loss of use; and

6-22          (3) Estimate the value of loss of use, the cost of temporary

6-23  housing and the reduction of market value of the residence; and

6-24      (g) Any interest provided by statute.

6-25      2.  The amount of any attorney’s fees awarded pursuant to this

6-26  section must be approved by the court.

6-27      3.  [If] Except as otherwise provided in NRS 11.202 and

6-28  chapter 116 of NRS, if a contractor complies with the provisions of

6-29  NRS 40.600 to 40.695, inclusive, the claimant may not recover from

6-30  the contractor, as a result of the constructional defect, anything other

6-31  than that which is provided pursuant to NRS 40.600 to 40.695,

6-32  inclusive.

6-33      4.  No contract or agreement may limit or alter the damages

6-34  that may be recovered pursuant to this section. Any provision of a

6-35  contract or agreement that conflicts with the provisions of this

6-36  subsection is void.

6-37      5.  As used in this section, “structural failure” means physical

6-38  damage to the load-bearing portion of a residence or appurtenance

6-39  caused by a failure of the load-bearing portion of the residence or

6-40  appurtenance.

6-41      Sec. 7.  NRS 40.667 is hereby amended to read as follows:

6-42      40.667  1.  Except as otherwise provided in subsection 2, a

6-43  written waiver or settlement agreement executed by a claimant after

6-44  a contractor has corrected or otherwise repaired a constructional

6-45  defect does not bar a claim for the constructional defect if it is

7-1  determined that the contractor failed to correct or repair the defect

7-2  properly.

7-3  2.  The provisions of subsection 1 do not apply to any written

7-4  waiver or settlement agreement described in subsection 1, unless:

7-5  (a) The claimant has obtained the opinion of an expert

7-6  concerning the constructional defect;

7-7  (b) The claimant has provided the contractor with a written

7-8  notice of the defect pursuant to NRS 40.645 or 40.682 and a copy of

7-9  the expert’s opinion; and

7-10      (c) The claimant and the contractor have complied with the

7-11  requirements for inspection and repair as provided in NRS 40.600 to

7-12  40.695, inclusive.

7-13      3.  If a claimant does not prevail in any action which is not

7-14  barred pursuant to this section, the court may:

7-15      (a) Deny the claimant’s attorney’s fees, fees for an expert

7-16  witness or costs; and

7-17      (b) Award attorney’s fees and costs to the contractor.

7-18      4.  If the court determines in an action which is not barred

7-19  pursuant to this section that a contractor failed to correct or repair

7-20  a constructional defect properly:

7-21      (a) The limitation on damages provided in NRS 40.655 does

7-22  not apply and the claimant may recover the damages specified in

7-23  NRS 40.655 in addition to any other damages to which he may be

7-24  entitled;

7-25      (b) The court shall revoke the license of the contractor and

7-26  notify the State Contractors’ Board of the revocation; and

7-27      (c) The contractor is liable to the claimant for damages in an

7-28  amount equal to three times the reasonable cost of repairs

7-29  necessary to cure the constructional defect that the contractor

7-30  failed to correct or repair properly.

7-31      Sec. 8.  NRS 40.670 is hereby amended to read as follows:

7-32      40.670  1.  A contractor who receives written notice of a

7-33  constructional defect resulting from work performed by the

7-34  contractor or his agent, employee or subcontractor which creates an

7-35  imminent threat to the health or safety of the inhabitants of the

7-36  residence shall take reasonable steps to cure the defect as soon as

7-37  practicable. The contractor shall not cure the defect by making any

7-38  repairs for which he is not licensed or by causing any repairs to be

7-39  made by a person who is not licensed to make those repairs. [If]

7-40      2.  Except as otherwise provided in subsection 3 or 4, if the

7-41  contractor fails to cure the defect in a reasonable time, the owner of

7-42  the residence may have the defect cured and may recover from the

7-43  contractor the reasonable cost of the repairs plus reasonable

7-44  attorney’s fees and costs in addition to any other damages

7-45  recoverable under any other law.

8-1  [2.  A]

8-2  3.  Except as otherwise provided in subsection 4, a contractor

8-3  who does not cure a defect pursuant to this section because he has

8-4  determined, in good faith and after a reasonable inspection, that

8-5  there is not an imminent threat to the health or safety of the

8-6  inhabitants is not liable for the cost of repairs, attorney’s fees and

8-7  costs , or other damages relating to the defect pursuant to [this

8-8  section, except that if a building inspector, building official or other

8-9  similar authority employed by a governmental body with

8-10  jurisdiction certifies that there is an imminent threat to the health

8-11  and safety of the inhabitants of the residence, the contractor is

8-12  subject to the provisions of subsection 1.] subsection 2.

8-13      4.  If an architect or residential designer registered pursuant

8-14  to chapter 623 of NRS, or a professional engineer licensed

8-15  pursuant to chapter 625 of NRS, certifies that the defect creates an

8-16  imminent threat to the health or safety of the inhabitants of the

8-17  residence, and if the trier of fact determines that the contractor

8-18  refused to correct the defect in a timely manner and was not acting

8-19  in good faith:

8-20      (a) The limitation on damages provided in NRS 40.655 does

8-21  not apply and the owner of the residence may recover the damages

8-22  specified in NRS 40.655 in addition to any other damages to which

8-23  he may be entitled;

8-24      (b) The trier of fact shall revoke the license of the contractor

8-25  and notify the State Contactors’ Board of the revocation; and

8-26      (c) The contractor is liable to the owner of the residence for

8-27  damages in an amount equal to three times the reasonable cost of

8-28  repairs necessary to cure the constructional defect that the

8-29  contractor failed to correct or repair properly.

8-30      Sec. 9.  NRS 17.245 is hereby amended to read as follows:

8-31      17.245  1.  When a release or a covenant not to sue or not to

8-32  enforce a judgment is given in good faith to one of two or more

8-33  persons liable in tort for the same injury or the same wrongful death:

8-34      (a) It does not discharge any of the other tortfeasors from

8-35  liability for the injury or wrongful death unless its terms so provide,

8-36  but it reduces the claim against the others to the extent of any

8-37  amount stipulated by the release or the covenant, or in the amount of

8-38  the consideration paid for it, whichever is the greater; and

8-39      (b) It discharges the tortfeasor to whom it is given from all

8-40  liability for contribution and for express and equitable indemnity to

8-41  any other tortfeasor.

8-42      2.  As used in this section[, “equitable] :

8-43      (a) “Equitable indemnity” means a right of indemnity that is

8-44  created by the court . [rather than]

9-1  (b) “Express indemnity” means a right of indemnity that is

9-2  expressly provided for in a written contract or other express

9-3  agreement.

9-4  Sec. 10.  NRS 78.585 is hereby amended to read as follows:

9-5  78.585  [The]

9-6  1.  Except as otherwise provided in subsection 2, the

9-7  dissolution of a corporation does not impair any claim, remedy or

9-8  cause of action available to or against it or its directors, officers or

9-9  shareholders arising before its dissolution and commenced within 2

9-10  years after the date of the dissolution. It continues as a body

9-11  corporate for the purpose of prosecuting and defending suits,

9-12  actions, proceedings and claims of any kind or character by or

9-13  against it and of enabling it gradually to settle and close its business,

9-14  to collect and discharge its obligations, to dispose of and convey its

9-15  property, and to distribute its assets, but not for the purpose of

9-16  continuing the business for which it was established.

9-17      2.  The dissolution of a corporation does not impair any claim,

9-18  remedy or cause of action available to or against it or its directors,

9-19  officers or shareholders arising pursuant to NRS 40.600 to 40.695,

9-20  inclusive, before or after its dissolution and commenced before the

9-21  expiration of a statute of limitation or repose applicable to the

9-22  claim, remedy or cause of action.

9-23      3.  In addition to any other method of enforcement, a claim,

9-24  remedy or cause of action specified in subsection 2 that is brought

9-25  or maintained against the corporation or its directors, officers or

9-26  shareholders may be enforced to the extent of any undistributed

9-27  assets of the corporation, including, without limitation, any

9-28  money, payment, disbursement, recovery or other asset available

9-29  to the corporation or its directors, officers or shareholders under a

9-30  policy of insurance obtained or maintained by or for the

9-31  corporation before, during or after the dissolution.

9-32      Sec. 11.  NRS 78.615 is hereby amended to read as follows:

9-33      78.615  [If]

9-34      1.  Except as otherwise provided in subsection 2, if any

9-35  corporation organized under this chapter becomes dissolved by the

9-36  expiration of its charter or otherwise, before final judgment obtained

9-37  in any action pending or commenced in any court of record of this

9-38  state against the corporation, the action [shall] must not abate [by

9-39  reason thereof,] because of the dissolution of the corporation, but

9-40  the dissolution of the corporation being suggested upon the record,

9-41  and the names of the trustees or receivers of the corporation being

9-42  entered upon the record, and notice thereof served upon the trustees

9-43  or receivers, or , if such service [be] is impracticable , upon the

9-44  counsel of record in such a case, the action [shall] must proceed to

10-1  final judgment against the trustees or receivers [by] in the name of

10-2  the corporation.

10-3      2.  A pending action or proceeding for a claim, remedy or

10-4  cause of action arising pursuant to NRS 40.600 to 40.695,

10-5  inclusive, against a corporation organized pursuant to this

10-6  chapter, whether commenced before or after the corporation

10-7  becomes dissolved, must not abate because of the dissolution of

10-8  the corporation, but must proceed against the trustees or receivers

10-9  in the name of the corporation.

10-10     Sec. 12.  NRS 86.505 is hereby amended to read as follows:

10-11     86.505  [The]

10-12     1.  Except as otherwise provided in subsection 2, the

10-13  dissolution of a limited-liability company does not impair any

10-14  claim, remedy or cause of action available to or against it or its

10-15  managers or members arising before its dissolution and commenced

10-16  within 2 years after the date of the dissolution. A dissolved company

10-17  continues as a company for the purpose of prosecuting and

10-18  defending suits, actions, proceedings and claims of any kind or

10-19  nature by or against it and of enabling it gradually to settle and close

10-20  its business, to collect and discharge its obligations, to dispose of

10-21  and convey its property, and to distribute its assets, but not for the

10-22  purpose of continuing the business for which it was established.

10-23     2.  The dissolution of a limited-liability company does not

10-24  impair any claim, remedy or cause of action available to or against

10-25  it or its managers or members arising pursuant to NRS 40.600 to

10-26  40.695, inclusive, before or after its dissolution and commenced

10-27  before the expiration of a statute of limitation or repose applicable

10-28  to the claim, remedy or cause of action.

10-29     3.  In addition to any other method of enforcement, a claim,

10-30  remedy or cause of action specified in subsection 2 that is brought

10-31  or maintained against the limited-liability company or its

10-32  managers or members may be enforced to the extent of any

10-33  undistributed assets of the limited-liability company, including,

10-34  without limitation, any money, payment, disbursement, recovery or

10-35  other asset available to the limited-liability company or its

10-36  managers or members under a policy of insurance obtained or

10-37  maintained by or for the limited-liability company before, during

10-38  or after the dissolution.

10-39     Sec. 13.  Chapter 113 of NRS is hereby amended by adding

10-40  thereto a new section to read as follows:

10-41     1.  A seller shall not include in a contract for the purchase

10-42  and sale of real property in this state that is entered into on or

10-43  after October 1, 2003, a provision requiring binding or

10-44  nonbinding arbitration of a claim involving a constructional

10-45  defect which is governed by NRS 40.600 to 40.695, inclusive.

11-1      2.  A provision of a contract that conflicts with the provisions

11-2  of subsection 1 is void.

11-3      3.  The provisions of this section do not:

11-4      (a) Prohibit parties to a claim involving a constructional defect

11-5  that is governed by NRS 40.600 to 40.695, inclusive, from agreeing

11-6  to participate in binding or nonbinding arbitration, or any other

11-7  alternative method of resolving a dispute after a claim is

11-8  commenced pursuant to NRS 40.600 to 40.695, inclusive.

11-9      (b) Apply to the arbitration of a matter that is otherwise

11-10  required by law or rule of court.

11-11     4.  As used in this section, “constructional defect” has the

11-12  meaning ascribed to it in NRS 40.615.

11-13     Sec. 14.  NRS 116.3115 is hereby amended to read as follows:

11-14     116.3115  1.  Until the association makes an assessment for

11-15  common expenses, the declarant shall pay all common expenses.

11-16  After an assessment has been made by the association, assessments

11-17  must be made at least annually, based on a budget adopted at least

11-18  annually by the association in accordance with the requirements set

11-19  forth in NRS 116.31151. Unless the declaration imposes more

11-20  stringent standards, the budget must include a budget for the daily

11-21  operation of the association and the money for the reserve required

11-22  by paragraph (b) of subsection 2.

11-23     2.  Except for assessments under subsections 4 to 7, inclusive:

11-24     (a) All common expenses, including a reserve, must be assessed

11-25  against all the units in accordance with the allocations set forth in

11-26  the declaration pursuant to subsections 1 and 2 of NRS 116.2107.

11-27     (b) The association shall establish an adequate reserve, funded

11-28  on a reasonable basis, for the repair, replacement and restoration of

11-29  the major components of the common elements. The reserve may be

11-30  used only for those purposes, including, without limitation,

11-31  repairing, replacing and restoring roofs, roads and sidewalks, and

11-32  must not be used for daily maintenance.

11-33     3.  Any past due assessment for common expenses or

11-34  installment thereof bears interest at the rate established by the

11-35  association not exceeding 18 percent per year.

11-36     4.  To the extent required by the declaration:

11-37     (a) Any common expense associated with the maintenance,

11-38  repair, restoration or replacement of a limited common element

11-39  must be assessed against the units to which that limited common

11-40  element is assigned, equally, or in any other proportion the

11-41  declaration provides;

11-42     (b) Any common expense or portion thereof benefiting fewer

11-43  than all of the units must be assessed exclusively against the units

11-44  benefited; and

12-1      (c) The costs of insurance must be assessed in proportion to risk

12-2  and the costs of utilities must be assessed in proportion to usage.

12-3      5.  Assessments to pay a judgment against the association may

12-4  be made only against the units in the common-interest community at

12-5  the time the judgment was entered, in proportion to their liabilities

12-6  for common expenses.

12-7      6.  If any common expense is caused by the misconduct of any

12-8  unit’s owner, the association may assess that expense exclusively

12-9  against his unit.

12-10     7.  The association of a common‑interest community created

12-11  before January 1, 1992, is not required to make an assessment

12-12  against a vacant lot located within the community that is owned by

12-13  the declarant.

12-14     8.  If liabilities for common expenses are reallocated,

12-15  assessments for common expenses and any installment thereof not

12-16  yet due must be recalculated in accordance with the reallocated

12-17  liabilities.

12-18     9.  The association shall provide a written notice to the owner

12-19  of each unit of a meeting at which an assessment for a capital

12-20  improvement or the commencement of a civil action is to be

12-21  considered or action is to be taken on [such an] the assessment at

12-22  least 21 calendar days before the meeting.

12-23     10.  Except as otherwise provided in this subsection[,] and

12-24  subsection 11, the association may commence a civil action only

12-25  upon a vote or written agreement of the owners of units to which at

12-26  least a majority of the votes of the members of the association are

12-27  allocated. If the association, after making a good faith effort,

12-28  cannot obtain a majority of votes or agreements to commence a

12-29  civil action, the association may commence the civil action, unless

12-30  a majority of votes at the time a vote was taken were against the

12-31  commencement of the civil action. If an action is commenced

12-32  before the association obtains the required number of votes, the

12-33  association must obtain a ratification for the commencement of

12-34  the civil action within 90 days after the action is commenced by a

12-35  vote or written agreement of the owners of units to which at least a

12-36  majority of votes of the members of the association are allocated.

12-37  If such ratification is not obtained, the association shall seek a

12-38  dismissal of the action without prejudice only if a majority of votes

12-39  at the time a vote was taken were in favor of the dismissal.

12-40     11.  The provisions of [this] subsection 10 do not apply to a

12-41  civil action that is commenced:

12-42     (a) To enforce the payment of an assessment;

12-43     (b) To enforce the declaration, bylaws or rules of the

12-44  association;

12-45     (c) To proceed with a counterclaim; or

13-1      (d) To protect the health, safety and welfare of the members of

13-2  the association. [If a civil action is commenced pursuant to this

13-3  paragraph without the required vote or agreement, the action must

13-4  be ratified within 90 days after the commencement of the action by

13-5  a vote or written agreement of the owners of the units to which at

13-6  least a majority of votes of the members of the association are

13-7  allocated. If the association, after making a good faith effort, cannot

13-8  obtain the required vote or agreement to commence or ratify such a

13-9  civil action, the association may thereafter seek to dismiss the action

13-10  without prejudice for that reason only if a vote or written agreement

13-11  of the owners of the units to which at least a majority of votes of the

13-12  members of the association are allocated was obtained at the time

13-13  the approval to commence or ratify the action was sought.

13-14     10.] 12. At least 10 days before an association commences or

13-15  seeks to ratify the commencement of a civil action, the association

13-16  shall provide a written statement to all units’ owners that includes:

13-17     (a) A reasonable estimate of the costs of the civil action,

13-18  including reasonable attorney’s fees;

13-19     (b) An explanation of the potential benefits of the civil action

13-20  and the potential adverse consequences if the association does not

13-21  commence the action or if the outcome of the action is not favorable

13-22  to the association; and

13-23     (c) All disclosures that are required to be made upon the sale of

13-24  the property.

13-25     [11.] 13. No person other than a unit’s owner may request the

13-26  dismissal of a civil action commenced by the association on the

13-27  ground that the association failed to comply with any provision of

13-28  this section.

13-29     Sec. 15.  Chapter 624 of NRS is hereby amended by adding

13-30  thereto a new section to read as follows:

13-31     1.  A contractor shall not include in any contract or

13-32  agreement for the purchase and sale of real property, or for the

13-33  repair, alteration of or addition to a new or existing residence, or

13-34  of an appurtenance that is entered into on or after October 1,

13-35  2003, a provision requiring binding or nonbinding arbitration of a

13-36  claim involving a constructional defect which is governed by NRS

13-37  40.600 to 40.695, inclusive.

13-38     2.  A provision of a contract or agreement that conflicts with

13-39  the provisions of subsection 1 is void.

13-40     3.  The provisions of this section do not:

13-41     (a) Prohibit parties to a claim involving a constructional defect

13-42  that is governed by NRS 40.600 to 40.695, inclusive, from agreeing

13-43  to participate in binding or nonbinding arbitration, or any other

13-44  alternative method of resolving a dispute after a claim has been

13-45  commenced pursuant to those sections.

14-1      (b) Apply to the arbitration of a matter that is otherwise

14-2  required by law or rule of court.

14-3      4.  As used in this section, “constructional defect” has the

14-4  meaning ascribed to it in NRS 40.615.

14-5      Sec. 16.  NRS 624.300 is hereby amended to read as follows:

14-6      624.300  1.  Except as otherwise provided in [subsection 3,]

14-7  subsections 3 and 7, the Board may:

14-8      (a) Suspend or revoke licenses already issued;

14-9      (b) Refuse renewals of licenses;

14-10     (c) Impose limits on the field, scope and monetary limit of the

14-11  license;

14-12     (d) Impose an administrative fine of not more than $10,000;

14-13     (e) Order a licensee to repay to the account established pursuant

14-14  to NRS 624.470, any amount paid out of the account pursuant to

14-15  NRS 624.510 as a result of an act or omission of that licensee;

14-16     (f) Order the licensee to take action to correct a condition

14-17  resulting from an act which constitutes a cause for disciplinary

14-18  action, at the licensee’s cost, that may consist of requiring the

14-19  licensee to:

14-20         (1) Perform the corrective work himself;

14-21         (2) Hire and pay another licensee to perform the corrective

14-22  work; or

14-23         (3) Pay to the owner of the construction project a specified

14-24  sum to correct the condition; or

14-25     (g) Reprimand or take other less severe disciplinary action,

14-26  including, without limitation, increasing the amount of the surety

14-27  bond or cash deposit of the licensee,

14-28  if the licensee commits any act which constitutes a cause for

14-29  disciplinary action.

14-30     2.  If the Board suspends or revokes the license of a contractor

14-31  for failure to establish financial responsibility, the Board may, in

14-32  addition to any other conditions for reinstating or renewing the

14-33  license, require that each contract undertaken by the licensee for a

14-34  period to be designated by the Board, not to exceed 12 months, be

14-35  separately covered by a bond or bonds approved by the Board and

14-36  conditioned upon the performance of and the payment of labor and

14-37  materials required by the contract.

14-38     3.  If a licensee violates the provisions of NRS 624.3014 or

14-39  subsection 3 of NRS 624.3015, the Board may impose an

14-40  administrative fine of not more than $20,000.

14-41     4.  If a licensee commits a fraudulent act which is a cause for

14-42  disciplinary action under NRS 624.3016, the correction of any

14-43  condition resulting from the act does not preclude the Board from

14-44  taking disciplinary action.

15-1      5.  If the Board finds that a licensee has engaged in repeated

15-2  acts that would be cause for disciplinary action, the correction of

15-3  any resulting conditions does not preclude the Board from taking

15-4  disciplinary action pursuant to this section.

15-5      6.  The expiration of a license by operation of law or by order

15-6  or decision of the Board or a court, or the voluntary surrender of a

15-7  license by a licensee, does not deprive the Board of jurisdiction to

15-8  proceed with any investigation of, or action or disciplinary

15-9  proceeding against, the licensee or to render a decision suspending

15-10  or revoking the license.

15-11     7.  A licensee whose license is revoked by an order issued

15-12  pursuant to NRS 40.667 or 40.670 may apply for a reinstatement

15-13  of his license if the order is reversed on appeal.

15-14     8.  If discipline is imposed pursuant to this section, including

15-15  any discipline imposed pursuant to a stipulated settlement, the costs

15-16  of the proceeding, including investigative costs and attorney’s fees,

15-17  may be recovered by the Board.

15-18     [8.] 9. All fines collected pursuant to this section must be

15-19  deposited with the State Treasurer for credit to the Construction

15-20  Education Account created pursuant to NRS 624.580.

15-21     Sec. 17.  1.  The amendatory provisions of this act do not

15-22  apply to a claim initiated or an action or suit filed before October 1,

15-23  2003.

15-24     2.  The amendatory provisions of this act apply to a contract or

15-25  agreement entered into on or after October 1, 2003.

 

15-26  H