REQUIRES TWO-THIRDS MAJORITY VOTE (§§ 11, 15, 20)exempt

                                                 (Reprinted with amendments adopted on April 21, 2003)

 

Senate Bill No. 371–Senator Schneider

 

March 17, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Creates Constructional Defect Commission and revises various provisions governing actions resulting from constructional defects. (BDR 54‑251)

 

FISCAL NOTE:    Effect on Local Government: Yes.

                             Effect on the State: Yes.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to real property; creating the Constructional Defect Commission; providing for its membership; setting forth the duties of the Commission; conferring exclusive jurisdiction upon the Commission to determine claims or causes of action for constructional defects; providing exceptions; requiring a claimant to provide certain notices and to allow a contractor a reasonable opportunity to repair a constructional defect before presenting a claim involving the constructional defect to the Commission; setting forth the manner in which a complaint must be presented to the Commission; requiring the Commission to hear a claim of a constructional defect within a certain period; authorizing the Commission to require a contractor to repair a constructional defect under certain circumstances; prohibiting the exclusion of a public officer from a meeting of a unit-owners’ association under certain circumstances; and providing other matters properly relating thereto.

 

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

2-1  Section 1. Chapter 624 of NRS is hereby amended by adding

2-2  thereto the provisions set forth as sections 2 to 19, inclusive, of this

2-3  act.

2-4  Sec. 2.  As used in sections 2 to 19, inclusive, of this act,

2-5  unless the context otherwise requires, the words and terms defined

2-6  in sections 3, 4 and 5 of this act have the meanings ascribed to

2-7  them in those sections.

2-8  Sec. 3.  “Commission” means the Constructional Defect

2-9  Commission created pursuant to section 6 of this act.

2-10      Sec. 4.  “Construction record” means a document received or

2-11  produced by a contractor, or any person employed by the

2-12  contractor, that contains information relating to the construction

2-13  of a residence or appurtenance, including, without limitation, any

2-14  report, record, plan, permit, contract, subcontract, invoice, work

2-15  order or other document.

2-16      Sec. 5.  “Constructional defect” includes a defect in the

2-17  design, construction, manufacture, repair or landscaping of a new

2-18  residence, of an alteration of or addition to an existing residence,

2-19  or of an appurtenance. The term includes physical damage to the

2-20  residence, an appurtenance or the real property to which the

2-21  residence or appurtenance is affixed that is proximately caused by

2-22  a constructional defect.

2-23      Sec. 6.  1.  The Board shall create the Constructional Defect

2-24  Commission consisting of seven members appointed by the

2-25  Governor.

2-26      2.  Each member who is appointed to the Commission serves

2-27  for a term of 4 years. A member may be reappointed to the

2-28  Commission.

2-29      3.  The Governor shall appoint to the Commission:

2-30      (a) Three members who are contractors recommended by the

2-31  Board, each of whom:

2-32          (1) Holds a license issued pursuant to this chapter;

2-33          (2) Is actively engaged in the contracting business and has

2-34  been so engaged for not less than 5 years preceding the date of his

2-35  appointment; and

2-36          (3) Has been a resident of this state for at least 5 years

2-37  immediately preceding his appointment; and

2-38      (b) Four members who are representatives of the general

2-39  public.

2-40      4.  The Governor shall appoint a Chairman of the

2-41  Commission.

2-42      Sec. 7.  1.  The members of the Commission:

2-43      (a) Serve without compensation; and

2-44      (b) Upon written request to the Board, are entitled to receive

2-45  the per diem allowance and travel expenses provided for state

3-1  officers and employees generally while engaged in the business of

3-2  the Commission. A claim submitted pursuant to this paragraph

3-3  must be paid from the account established by NRS 624.470.

3-4  2.  The Governor may remove a member of the Commission

3-5  before the expiration of his term for misconduct in office,

3-6  incompetence or neglect of duty.

3-7  3.  If a vacancy occurs in the membership of the Commission,

3-8  the Governor shall appoint a person to fill the vacancy for the

3-9  remainder of the unexpired term. A vacancy on the Commission

3-10  must be filled in the same manner as the original appointment.

3-11      4.  Four members, at least one of whom must be a contractor,

3-12  constitute a quorum.

3-13      5.  Notwithstanding any other provision of law, a member of

3-14  the Commission:

3-15      (a) Is not disqualified from public employment or holding a

3-16  public office because of his membership on the Commission; and

3-17      (b) Does not forfeit his public office or public employment

3-18  because of his membership on the Commission.

3-19      Sec. 8.  1.  The Board shall arrange for courses of

3-20  instruction in the rules of procedure and substantive law

3-21  appropriate for members of the Commission.

3-22      2.  Each person appointed to serve on the Commission shall

3-23  attend the instruction provided pursuant to subsection 1 before

3-24  serving on the Commission.

3-25      Sec. 9.  1.  Except as otherwise provided in sections 2 to 19,

3-26  inclusive, of this act, the Commission has exclusive jurisdiction to

3-27  determine claims or causes of action for the recovery of damages

3-28  based on constructional defects, and no person may bring or

3-29  maintain such a claim or cause of action in a manner other than

3-30  that prescribed in sections 2 to 19, inclusive, of this act.

3-31      2.  A final decision of the Commission concerning a claim or

3-32  cause of action specified in subsection 1 is subject to judicial

3-33  review in accordance with chapter 233B of NRS.

3-34      3.  The provisions of chapter 241 of NRS do not apply to any

3-35  meeting or hearing of the Commission held to carry out the

3-36  provisions of sections 2 to 19, inclusive, of this act or to the

3-37  deliberations of the Commission on any information or evidence

3-38  pursuant to sections 2 to 19, inclusive, of this act.

3-39      Sec. 10.  The Commission and its members acting pursuant to

3-40  sections 2 to 19, inclusive, of this act are immune from any civil

3-41  liability for any decision or action taken in good faith and without

3-42  malicious intent in response to a complaint filed with the

3-43  Commission.

3-44      Sec. 11.  1.  The Board:

4-1  (a) Shall develop and maintain a list of alternate members who

4-2  satisfy the requirements of sections 6 and 8 of this act;

4-3  (b) Shall schedule the hearings for the Commission;

4-4  (c) Shall obtain, before or after the filing of a complaint with

4-5  the Commission, such construction records and other materials as

4-6  may be required by the parties or the Commission in connection

4-7  with the claim of a constructional defect;

4-8  (d) Shall charge and collect a reasonable fee for copying

4-9  materials produced under subpoena;

4-10      (e) For good cause shown, may authorize a continuance for

4-11  the proceedings involving the Commission;

4-12      (f) To the extent necessary for the Commission to carry out its

4-13  duties, shall provide the Commission with administrative support,

4-14  equipment and office space; and

4-15      (g) May adopt such rules of practice and procedure as are

4-16  necessary to carry out the provisions of sections 2 to 19, inclusive,

4-17  of this act.

4-18      2.  The Attorney General shall serve as legal counsel for the

4-19  Commission.

4-20      Sec. 12.  1.  A member of the Commission may disqualify

4-21  himself from acting in any matter upon the ground of actual or

4-22  implied bias.

4-23      2.  A party to a matter who seeks to disqualify a member of the

4-24  Commission from acting on a complaint of a constructional defect

4-25  filed pursuant to section 15 of this act shall file a request for

4-26  disqualification in writing with the Board not later than 15 days

4-27  after the expiration of the time in which to answer the complaint,

4-28  specifying the facts upon which such disqualification is sought. A

4-29  party may make a request for the disqualification of any member

4-30  of the Commission for cause on any of the grounds provided

4-31  pursuant to NRS 16.050 for the challenge of jurors.

4-32      3.  The Board shall determine whether cause exists to

4-33  disqualify a member of the Commission pursuant to a request filed

4-34  by a party and shall notify each party in writing of its decision not

4-35  later than 15 days after the request is made.

4-36      4.  Except as otherwise provided in subsection 5, the

4-37  Commission, less any member who has been disqualified, may

4-38  proceed to review a complaint without designating a person to sit

4-39  in the place of a disqualified member.

4-40      5.  If the number of members who are disqualified or whose

4-41  temporary absence prohibits a quorum of the Commission from

4-42  forming, the Board shall, upon the disqualification or temporary

4-43  absence of a member of the Commission, designate an alternate

4-44  member from the list developed pursuant to section 11 of this act

4-45  who is the same class of member as the disqualified or absent

5-1  member to sit in the place of the disqualified or absent member. If

5-2  an alternate member is designated, that member must be identified

5-3  in the notice provided to the parties pursuant to subsection 3.

5-4  Sec. 13.  1.  Except as otherwise provided in this section, no

5-5  claim involving a constructional defect may be presented to the

5-6  Commission until the claimant provides:

5-7  (a) Two written notices by certified mail, return receipt

5-8  requested, to the contractor, at the contractor’s last known

5-9  address, of the constructional defect alleged in the complaint

5-10  against the contractor; and

5-11      (b) A reasonable opportunity, following the written notices, for

5-12  the contractor to repair the alleged constructional defect.

5-13      2.  The written notices required pursuant to subsection 1

5-14  must:

5-15      (a) Be mailed at least 30 days apart;

5-16      (b) Specify, in reasonable detail, the defect or any damage or

5-17  injury to each residence or appurtenance that is the subject of the

5-18  claim;

5-19      (c) Describe in reasonable detail the cause of the defect, if the

5-20  cause is known, and the nature and extent that is known of the

5-21  damage or injury resulting from the defect; and

5-22      (d) Provide the location of each defect within each residence

5-23  or appurtenance to the extent known.

5-24      3.  Within 45 days after the contractor receives the first notice,

5-25  on his written request, the contractor is entitled to inspect the

5-26  property that is the subject of the claim to determine the nature

5-27  and cause of the defect, damage or injury and the nature and

5-28  extent of repairs necessary to remedy the defect. The contractor

5-29  shall, before conducting the inspection, provide reasonable notice

5-30  of the inspection, and shall conduct the inspection at a reasonable

5-31  time. The contractor may take reasonable steps to establish the

5-32  existence of the defect, damage or injury.

5-33      4.  Within 15 days after a contractor receives the second

5-34  notice, a claimant may present a claim to the Commission as set

5-35  forth in section 15 of this act if the contractor fails to:

5-36      (a) Make an agreement that is acceptable to the claimant to

5-37  make repairs, if the contractor is licensed to make the repairs, or

5-38  cause the repairs to be made, at the contractor’s expense, by

5-39  another contractor who is bonded, insured and licensed to make

5-40  the repairs; or

5-41      (b) Make the repairs specified in an agreement between the

5-42  claimant and contractor pursuant to paragraph (a):

5-43          (1) Within the time specified in the agreement; and

5-44          (2) In a good and workmanlike manner.

6-1  5.  A written waiver or settlement agreement executed by a

6-2  claimant after a contractor has corrected or otherwise repaired a

6-3  constructional defect pursuant to this section does not bar a claim

6-4  for the constructional defect if it is determined that the contractor

6-5  failed to correct or repair the defect properly.

6-6  Sec. 14.  A contractor or his representative must be present at

6-7  any inspection at the residence or appurtenance, if any, that is the

6-8  subject of a claim governed by sections 2 to 19, inclusive, of this

6-9  act, which is conducted by the claimant or his representative,

6-10  including, without limitation, an expert hired or retained by the

6-11  claimant to conduct the inspection.

6-12      Sec. 15.  1.  A claim of a constructional defect is properly

6-13  presented to the Commission by filing a complaint with the Board.

6-14      2.  The complaint must contain a clear and concise statement

6-15  of the facts of the case, including, without limitation, the persons

6-16  involved and the dates and circumstances, so far as they are

6-17  known, of the alleged constructional defect. The Commission may

6-18  dismiss a complaint if the complaint is filed without an affidavit

6-19  supporting the allegations of the complaint submitted by an expert

6-20  concerning the alleged constructional defect.

6-21      3.  The person against whom a complaint is made must,

6-22  within 30 days after receipt of the complaint, file an answer with

6-23  the Board, accompanied by a fee of $250. The Board may

6-24  authorize an extension of the time in which an answer must be

6-25  filed only if all parties to the action stipulate to the extension.

6-26      4.  Unless otherwise stipulated to by all the parties to the

6-27  action, an answer or response that is not timely filed may not be:

6-28      (a) Accepted by the Board; or

6-29      (b) Considered by the Commission.

6-30      5.  The claimant may respond only to the allegations of the

6-31  answer or any accompanying affidavit by filing a written response

6-32  with the Board within 15 days after he receives the answer. The

6-33  Commission shall disregard any portion of the response that does

6-34  not address an allegation raised in the answer or an affidavit

6-35  accompanying the answer. No fee may be charged or collected by

6-36  the Board for the filing of the response. The Board may authorize

6-37  an extension of the time in which a response may be filed only if

6-38  all parties to the action stipulate to the extension.

6-39      6.  A copy of any pleading required by this section to be filed

6-40  with the Board must be delivered by the party, by certified or

6-41  registered mail or by personal service, to each opposing party or, if

6-42  an opposing party is represented in the proceedings by counsel, to

6-43  his attorney.

6-44      7.  The fees provided by this section must not be charged or

6-45  collected more than once from any party.

7-1  8.  If a person fails to pay any fee required by this section, the

7-2  Board may refer the nonpayment to the Office of the Attorney

7-3  General for collection of the fee and any costs incurred.

7-4  Sec. 16.  1.  The Board may, by certified or registered mail,

7-5  issue subpoenas as may be required by the Commission, to compel

7-6  the attendance of expert witnesses and, as may be required by the

7-7  parties or the Commission, to compel the production of

7-8  construction records or other materials.

7-9  2.  The Board shall keep the material so produced and make it

7-10  available to the parties, upon request, for inspection or copying. If

7-11  the material is reasonably capable of being copied, the Board shall

7-12  provide a copy to the parties, upon request and the receipt of a fee

7-13  for the copying.

7-14      3.  If an expert witness refuses to attend or testify or if a

7-15  person refuses to produce any construction records or other

7-16  materials as required by the subpoena, the Board may petition the

7-17  district court for an order compelling the expert witness to attend

7-18  and testify or the other person to produce the construction records

7-19  or other materials. The petition must include a statement

7-20  indicating that:

7-21      (a) Notice has been given of the time and place of attendance

7-22  of the expert witness or for the production of the construction

7-23  records or other materials;

7-24      (b) The expert witness or the person required to produce the

7-25  construction records or other materials has been subpoenaed by

7-26  the Board pursuant to this section; and

7-27      (c) The expert witness has failed or refused to attend or testify,

7-28  to produce the construction records or other materials required by

7-29  the subpoena, or to answer questions propounded to him.

7-30      4.  Upon receiving a petition pursuant to subsection 3, the

7-31  court shall enter an order directing the expert witness or other

7-32  person to appear before the court at a time and place to be fixed by

7-33  the court in its order, which is not more than 10 days after the date

7-34  of the order, and show cause why he has not attended, testified, or

7-35  produced the construction records or other materials. A certified

7-36  copy of the order must be served upon the expert witness or other

7-37  person.

7-38      5.  If it appears to the court that the subpoena was regularly

7-39  issued by the Board, the court shall enter an order that the expert

7-40  witness or other person appear at the time and place fixed in the

7-41  order and testify or produce the required construction records or

7-42  other materials, and upon his failure to obey the order, the expert

7-43  witness or other person must be dealt with as for contempt of

7-44  court.

8-1  Sec. 17.  1.  A claim of a constructional defect must be heard

8-2  by the Commission within 45 days after the expiration of the time

8-3  in which to answer the complaint filed pursuant to section 15 of

8-4  this act.

8-5  2.  The Commission shall consider all the construction

8-6  records or other materials, including, without limitation, the

8-7  complaint, answer and response, construction records and the

8-8  testimony of an expert witness the Commission considers

8-9  necessary, and shall, based on the evidence submitted, determine

8-10  only whether there is a reasonable probability that a

8-11  constructional defect exists and that the claimant was damaged

8-12  thereby.

8-13      3.  Copies of the original complaint and of the findings of the

8-14  Commission with regard to each matter considered by the

8-15  Commission must be forwarded to the city or county building

8-16  department where the alleged constructional defect occurred, as

8-17  appropriate.

8-18      4.  The Board shall promptly mail to each party to the claim a

8-19  copy of the findings of the Commission concerning the complaint.

8-20      5.  The findings must be based upon a vote of the members of

8-21  the Commission made by a written ballot, must be rendered within

8-22  5 days after the hearing on the claim and must be in substantially

8-23  the following form:

8-24      (a) Based upon a review of the materials submitted by the

8-25  parties and the testimony of expert witnesses, if any, the

8-26  Commission finds that there is a reasonable probability that a

8-27  constructional defect exists and that the claimant was damaged

8-28  thereby; or

8-29      (b) Based upon a review of the materials submitted by the

8-30  parties and the testimony of expert witnesses, if any, the

8-31  Commission finds that there is no reasonable probability that a

8-32  constructional defect exists.

8-33      6.  A finding made pursuant to paragraph (a) of subsection 5

8-34  must also include the findings of the Commission concerning each

8-35  claim of constructional defect alleged by the claimant.

8-36      Sec. 18.  1.  If the Commission issues a finding in favor of

8-37  the claimant pursuant to paragraph (a) of subsection 5 of section

8-38  17 of this act, the Commission may order the contractor to:

8-39      (a) Make repairs at the contractor’s expense, if the contractor

8-40  is licensed to make the repairs; or

8-41      (b) Cause the repairs to be made, at the contractor’s expense

8-42  and, if insured, his insurer’s expense, by another contractor who

8-43  is bonded, insured and licensed to make the repairs.

9-1  2.  Any repairs ordered pursuant to this section must be

9-2  completed within 90 days after the contractor is served with a

9-3  written notice of the order.

9-4  3.  A copy of the order must be served on each party to the

9-5  claim personally, or by registered or certified mail. The order is

9-6  effective upon such service, unless the Commission orders

9-7  otherwise.

9-8  4.  A contractor may petition the Board, by written request

9-9  supported by an affidavit of the contractor, for an extension of

9-10  the time for completion of repairs if completion is delayed by the

9-11  claimant or by any other event beyond the control of the

9-12  contractor, or if timely completion of the repairs is not reasonably

9-13  possible.

9-14      5.  The Board may grant one extension of time not to exceed

9-15  45 days for a contractor to complete the repairs required by the

9-16  order of the Commission if the extension is timely requested and

9-17  supported by an affidavit of the contractor. The Board shall

9-18  provide written notice of any grant or denial of an extension of

9-19  time to each party to the claim within 10 days after receipt of the

9-20  request.

9-21      6.  If the contractor fails to comply with an order issued

9-22  pursuant to this section, upon the written request of the claimant

9-23  made within 10 days after the expiration of the period for making

9-24  the repairs or causing the repairs to be made as described in the

9-25  order, or any authorized extension for the contractor to make the

9-26  repairs or cause the repairs to be made, the Commission:

9-27      (a) May cause the repairs to be made, at the constructor’s

9-28  expense and, if insured, at his insurer’s expense, by another

9-29  contractor who is bonded, insured and licensed to make the

9-30  repairs; and

9-31      (b) Shall notify the Board in writing of the failure of the

9-32  contractor to comply with the order. As soon as practicable after

9-33  receiving a written notice pursuant to this paragraph, the Board

9-34  shall revoke the license of the contractor.

9-35      Sec. 19.  If the Commission issues a finding that there is no

9-36  reasonable probability that a constructional defect exists, the

9-37  Commission shall dismiss the complaint filed in the action

9-38  pursuant to section 15 of this act.

9-39      Sec. 20.  NRS 624.470 is hereby amended to read as follows:

9-40      624.470  1.  Except as otherwise provided in subsection 3, in

9-41  addition to the annual fee for a license required pursuant to NRS

9-42  624.280, a residential contractor shall pay to the Board an annual

9-43  assessment in the following amount, if the monetary limit on his

9-44  license is:

 

10-1  Not more than $1,000,000............... $100

10-2  More than $1,000,000 but limited..... 250

10-3  Unlimited............................................. 500

 

10-4      2.  The Board shall administer and account separately for the

10-5  money received from the annual assessments collected pursuant to

10-6  subsection 1. The Board may refer to the money in the account as

10-7  the “Recovery Fund.”

10-8      3.  The Board[shall] :

10-9      (a) Shall suspend the collection of assessments pursuant to

10-10  subsection 1 when the balance in the account reaches 150 percent of

10-11  the largest balance in the account during the previous fiscal year[.] ;

10-12  and

10-13     (b) May increase the annual assessment imposed pursuant to

10-14  subsection 1 in an amount that, as determined by the Board, is

10-15  required to pay:

10-16         (1) Any costs and expenses that are incurred to carry out

10-17  the provisions of sections 2 to 19, inclusive, of this act, including,

10-18  without limitation, any costs and expenses incurred by the Office

10-19  of the Attorney General; and

10-20         (2) Any claims for per diem allowances and travel expenses

10-21  of the Constructional Defect Commission pursuant to section 7 of

10-22  this act.

10-23     4.  Except as otherwise provided in NRS 624.540, the money in

10-24  the account must be used to pay [claims made:] :

10-25     (a) Claims made by owners who are damaged by the failure of a

10-26  residential contractor to perform qualified services adequately, as

10-27  provided in [NRS 624.400 to 624.560, inclusive,] sections 2 to 19,

10-28  inclusive, of this act;

10-29     (b) Claims submitted pursuant to section 7 of this act; or

10-30     (c) Any other costs and expenses that are incurred to carry out

10-31  the provisions of sections 2 to 19, inclusive, of this act, including,

10-32  without limitation, any costs and expenses incurred by the Office

10-33  of the Attorney General.

10-34     Sec. 21.  NRS 113.135 is hereby amended to read as follows:

10-35     113.135  1.  Upon signing a sales agreement with the initial

10-36  purchaser of residential property that was not occupied by the

10-37  purchaser for more than 120 days after substantial completion of the

10-38  construction of the residential property, the seller shall:

10-39     (a) Provide to the initial purchaser a copy of NRS 11.202 to

10-40  11.206, inclusive, and [40.600 to 40.695, inclusive;] sections 2 to

10-41  19, inclusive, of this act;

10-42     (b) Notify the initial purchaser of any soil report prepared for the

10-43  residential property or for the subdivision in which the residential

10-44  property is located; and

11-1      (c) If requested in writing by the initial purchaser not later than

11-2  5 days after signing the sales agreement, provide to the purchaser

11-3  without cost each report described in paragraph (b) not later than 5

11-4  days after the seller receives the written request.

11-5      2.  Not later than 20 days after receipt of all reports pursuant to

11-6  paragraph (c) of subsection 1, the initial purchaser may rescind the

11-7  sales agreement.

11-8      3.  The initial purchaser may waive his right to rescind the sales

11-9  agreement pursuant to subsection 2. Such a waiver is effective only

11-10  if it is made in a written document that is signed by the purchaser.

11-11     Sec. 22.  NRS 116.3115 is hereby amended to read as follows:

11-12     116.3115  1.  Until the association makes an assessment for

11-13  common expenses, the declarant shall pay all common expenses.

11-14  After an assessment has been made by the association, assessments

11-15  must be made at least annually, based on a budget adopted at least

11-16  annually by the association in accordance with the requirements set

11-17  forth in NRS 116.31151. Unless the declaration imposes more

11-18  stringent standards, the budget must include a budget for the daily

11-19  operation of the association and the money for the reserve required

11-20  by paragraph (b) of subsection 2.

11-21     2.  Except for assessments under subsections 4 to 7, inclusive:

11-22     (a) All common expenses, including a reserve, must be assessed

11-23  against all the units in accordance with the allocations set forth in

11-24  the declaration pursuant to subsections 1 and 2 of NRS 116.2107.

11-25     (b) The association shall establish an adequate reserve, funded

11-26  on a reasonable basis, for the repair, replacement and restoration of

11-27  the major components of the common elements. The reserve may be

11-28  used only for those purposes, including, without limitation,

11-29  repairing, replacing and restoring roofs, roads and sidewalks, and

11-30  must not be used for daily maintenance.

11-31     3.  Any past due assessment for common expenses or

11-32  installment thereof bears interest at the rate established by the

11-33  association not exceeding 18 percent per year.

11-34     4.  To the extent required by the declaration:

11-35     (a) Any common expense associated with the maintenance,

11-36  repair, restoration or replacement of a limited common element

11-37  must be assessed against the units to which that limited common

11-38  element is assigned, equally, or in any other proportion the

11-39  declaration provides;

11-40     (b) Any common expense or portion thereof benefiting fewer

11-41  than all of the units must be assessed exclusively against the units

11-42  benefited; and

11-43     (c) The costs of insurance must be assessed in proportion to risk

11-44  and the costs of utilities must be assessed in proportion to usage.

12-1      5.  Assessments to pay a judgment against the association may

12-2  be made only against the units in the common-interest community at

12-3  the time the judgment was entered, in proportion to their liabilities

12-4  for common expenses.

12-5      6.  If any common expense is caused by the misconduct of any

12-6  unit’s owner, the association may assess that expense exclusively

12-7  against his unit.

12-8      7.  The association of a common-interest community created

12-9  before January 1, 1992, is not required to make an assessment

12-10  against a vacant lot located within the community that is owned by

12-11  the declarant.

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

12-13  assessments for common expenses and any installment thereof not

12-14  yet due must be recalculated in accordance with the reallocated

12-15  liabilities.

12-16     9.  The association shall provide written notice to the owner of

12-17  each unit of a meeting at which an assessment for a capital

12-18  improvement or the commencement of a civil action is to be

12-19  considered or action is to be taken on such an assessment at least 21

12-20  calendar days before the meeting. Except as otherwise provided in

12-21  this subsection, the association may commence a civil action only

12-22  upon a vote or written agreement of the owners of units to which at

12-23  least a majority of the votes of the members of the association are

12-24  allocated. The provisions of this subsection do not apply to a civil

12-25  action that is commenced:

12-26     (a) To enforce the payment of an assessment;

12-27     (b) To enforce the declaration, bylaws or rules of the

12-28  association;

12-29     (c) To proceed with a counterclaim; or

12-30     (d) To protect the health, safety and welfare of the members of

12-31  the association. If a civil action is commenced pursuant to this

12-32  paragraph without the required vote or agreement, the action must

12-33  be ratified within 90 days after the commencement of the action by

12-34  a vote or written agreement of the owners of the units to which at

12-35  least a majority of votes of the members of the association are

12-36  allocated. If the association, after making a good faith effort, cannot

12-37  obtain the required vote or agreement to commence or ratify such a

12-38  civil action, the association may thereafter seek to dismiss the action

12-39  without prejudice for that reason only if a vote or written agreement

12-40  of the owners of the units to which at least a majority of votes of the

12-41  members of the association are allocated was obtained at the time

12-42  the approval to commence or ratify the action was sought.

12-43     10.  At least 10 days before an association commences or seeks

12-44  to ratify the commencement of a civil action, the association shall

12-45  provide a written statement to all units’ owners that includes:

13-1      (a) A reasonable estimate of the costs of the civil action,

13-2  including reasonable attorney’s fees;

13-3      (b) An explanation of the potential benefits of the civil action

13-4  and the potential adverse consequences if the association does not

13-5  commence the action or if the outcome of the action is not favorable

13-6  to the association; and

13-7      (c) All disclosures that are required to be made upon the sale of

13-8  the property.

13-9      11.  At any meeting at which the filing of a claim for a

13-10  constructional defect is considered, the executive board shall not

13-11  exclude a public officer from attending the meeting if the public

13-12  officer is invited to attend the meeting by a unit’s owner who is

13-13  authorized to attend the meeting. The authority of the public

13-14  officer to attend a meeting pursuant to this subsection is

13-15  coextensive with the authority of the unit’s owner to attend the

13-16  meeting pursuant to NRS 116.31085. As used in this subsection:

13-17     (a) “Constructional defect” has the meaning ascribed to it in

13-18  section 5 of this act.

13-19     (b) “Public officer” means:

13-20         (1) The Ombudsman for Owners in Common-Interest

13-21  Communities; and

13-22         (2) Any other person who is an elected or appointed public

13-23  officer.

13-24     12.  No person other than a unit’s owner may request the

13-25  dismissal of a civil action commenced by the association on the

13-26  ground that the association failed to comply with any provision of

13-27  this section.

13-28     Sec. 23.  NRS 278.577 is hereby amended to read as follows:

13-29     278.577  1.  Except as otherwise provided in subsection 2, in a

13-30  county whose population is 100,000 or more, or in any city located

13-31  within such a county, if the city or county provides for the

13-32  inspection of structures and the enforcement of building codes

13-33  pursuant to NRS 278.570, 278.573 and 278.575, the city or county

13-34  shall:

13-35     (a) Prepare a list of national and international organizations

13-36  which certify persons who inspect a structure or a portion of a

13-37  structure and which are approved by the city or county, as

13-38  appropriate, for certifying persons pursuant to this subsection;

13-39     (b) Require a person who fills the position of building official,

13-40  reviews plans or inspects a structure or building or a portion of a

13-41  structure or building pursuant to NRS 278.570 or 278.575 to be

13-42  certified by an organization included on the list prepared pursuant to

13-43  paragraph (a);

13-44     (c) Establish requirements for continuing education for a person

13-45  who is required to be certified pursuant to this subsection; and

14-1      (d) Prohibit a person who is not certified or does not fulfill the

14-2  requirements for continuing education pursuant to this subsection

14-3  from filling the position of building official, reviewing plans or

14-4  inspecting a structure or building or a portion of a structure or

14-5  building pursuant to NRS 278.570 or 278.575.

14-6      2.  A city or county specified in subsection 1 may authorize an

14-7  employee of the city or county to perform duties for which

14-8  certification is required pursuant to that subsection if those duties

14-9  are performed under the supervision of a person who is certified by

14-10  an organization that is included on the list prepared by the city or

14-11  county pursuant to paragraph (a) of that subsection. The city or

14-12  county may authorize an employee to perform duties pursuant to

14-13  this subsection for not more than 1 year.

14-14     3.  The requirements for continuing education established

14-15  pursuant to paragraph (c) of subsection 1 must:

14-16     (a) Include the completion of at least 45 hours of continuing

14-17  education every 3 years; and

14-18     (b) Specify the manner in which a person may complete those

14-19  hours.

14-20     4.  In a county whose population is less than 100,000, or in any

14-21  city located within such a county, if the city or county provides for

14-22  the inspection of structures and the enforcement of building codes

14-23  pursuant to NRS 278.570, 278.573 and 278.575, the city or county

14-24  shall, by resolution, establish the requirements for certifying and for

14-25  continuing education for a person who, on a full-time basis, fills the

14-26  position of building official, reviews plans or inspects a structure or

14-27  building or a portion of a structure or building pursuant to NRS

14-28  278.570 or 278.575.

14-29     5.  In addition to the requirements for continuing education

14-30  established pursuant to this section, each city or county that

14-31  provides for the inspection of structures and the enforcement of

14-32  building codes pursuant to NRS 278.570, 278.573 and 278.575

14-33  shall, by resolution, require each person who:

14-34     (a) Fills the position of building official, reviews plans or

14-35  inspects a structure or building or a portion of a structure or

14-36  building pursuant to NRS 278.570 or 278.575; and

14-37     (b) Is required to attend a course of continuing education

14-38  pursuant to this section,

14-39  to complete a course of instruction in constructional defects

14-40  approved by the State Contractors’ Board. The resolution must

14-41  require the person to complete the course annually and must

14-42  include the requirements for submission of proof of attendance at

14-43  the course. As used in this subsection, “constructional defect” has

14-44  the meaning ascribed to it in section 5 of this act.

15-1      Sec. 24.  NRS 40.600, 40.605, 40.610, 40.613, 40.615, 40.620,

15-2  40.625, 40.630, 40.635, 40.640, 40.645, 40.650, 40.655, 40.660,

15-3  40.665, 40.667, 40.668, 40.670, 40.672, 40.675, 40.680, 40.682,

15-4  40.687, 40.688, 40.6881, 40.6882, 40.6883, 40.6884, 40.6885,

15-5  40.689, 40.690, 40.692 and 40.695 are hereby repealed.

15-6      Sec. 25.  1.  Each person who, before October 1, 2003,

15-7  submitted a claim to recover damages resulting from a

15-8  constructional defect pursuant to NRS 40.600 to 40.695, inclusive,

15-9  but who has not filed a civil action concerning the claim, may, if the

15-10  claim has not been withdrawn, settled or otherwise resolved in

15-11  accordance with those sections before October 1, 2003, submit the

15-12  claim to the Constructional Defect Commission for disposition in

15-13  accordance with the provisions of sections 2 to 19, inclusive, of this

15-14  act. The claim must be submitted within 1 year after October 1,

15-15  2003.

15-16     2.  The clerk of each court in this state in which a civil action

15-17  for damages resulting from a constructional defect has been filed

15-18  before October 1, 2003, and for which a trial has not been

15-19  commenced in that court before October 1, 2003, shall, as soon as

15-20  practicable after October 1, 2003, transmit the file for the civil

15-21  action to the Constructional Defect Commission for disposition in

15-22  accordance with the provisions of sections 2 to 19, inclusive, of this

15-23  act.

15-24     3.  Notwithstanding the provisions of section 24 of this act, if:

15-25     (a) A civil action for damages resulting from a constructional

15-26  defect has been filed before October 1, 2003; and

15-27     (b) A trial for the civil action has been commenced before

15-28  October 1, 2003,

15-29  the civil action must be adjudicated in accordance with the

15-30  provisions of NRS 40.600 to 40.695, inclusive, as if those

15-31  provisions had not been repealed.

 

15-32  LEADLINES OF REPEALED SECTIONS

 

15-33     40.600  Definitions.

15-34     40.605  “Appurtenance” defined.

15-35     40.610  “Claimant” defined.

15-36     40.613  “Complex matter” defined.

15-37     40.615  “Constructional defect” defined.

15-38     40.620  “Contractor” defined.

15-39     40.625  “Homeowner’s warranty” defined.

15-40     40.630  “Residence” defined.

16-1      40.635  Applicability; effect on other defenses.

16-2      40.640  Liability of contractor.

16-3      40.645  Written notice to contractor required before

16-4   claimant commences certain actions; contents of notice;

16-5   inspection by contractor; pursuit of claim under warranty;

16-6   written response by contractor required; mutual duty to

16-7   disclose documentary evidence.

16-8      40.650  Effect of rejecting reasonable offer of settlement or

16-9   denying opportunity to repair defect; effect of payment under

16-10   warranty; effect of contractor failing to take certain actions;

16-11   effect of bad faith denial of coverage under warranty.

16-12     40.655  Limitation on recovery.

16-13     40.660  Nonacceptance of offer of settlement deemed

16-14   rejection.

16-15     40.665  Settlement by repurchase; certain offers of

16-16   settlement deemed reasonable.

16-17     40.667  Effect of written waiver or settlement agreement

16-18   when contractor fails to correct or repair defect properly;

16-19   conditions to bringing action; effect of failure to prevail in

16-20   action.

16-21     40.668  Action against subdivider or master developer for

16-22   defect in appurtenance in planned unit development:

16-23   Conditions and limitations; tolling of statutes of limitation or

16-24   repose; applicability.

16-25     40.670  Defect which creates imminent threat to health or

16-26   safety: Duty of contractor to cure; effect of failure to cure;

16-27   exceptions.

16-28     40.672  Defect in new residence: Duty of contractor to

16-29   repair; time limits; extensions; disciplinary action for failure to

16-30   comply.

16-31     40.675  Inspection of repairs.

16-32     40.680  Mediation of certain claims required before action

16-33   commenced; procedure; appointment of special master; effect

16-34   of failure to mediate in good faith.

16-35     40.682  Complex matters: Written notice by claimant;

16-36   procedural requirements; additional parties and third-party

16-37   complaints; mediation; appointment of special master;

16-38   limitation on certain pretrial procedures; pursuit of claim

16-39   under warranty; written response by contractor.

16-40     40.687  Disclosure of information concerning warranties

16-41   after action is commenced; disclosure of information

16-42   concerning insurance agreements; compelled production of

16-43   information.

16-44     40.688  Disclosure of defects by claimant to prospective

16-45   purchaser of residence required; timing and contents of

17-1  disclosure; duty of attorney to inform claimant of disclosure

17-2  requirement.

17-3      40.6881  Definitions.

17-4      40.6882  “Complainant” defined.

17-5      40.6883  “Design professional” defined.

17-6      40.6884  Attorney required to consult expert; required

17-7   affidavit of attorney; required report of expert.

17-8      40.6885  Effect of compliance with or failure to comply with

17-9   NRS 40.6884.

17-10     40.689  Preference given to action; action may be assigned

17-11   to senior judge; assessment of additional expenses.

17-12     40.690  Limitation on bringing claim against governmental

17-13   entity during period for resolution; effect of settlement;

17-14   contractor or claimant may require party to appear and

17-15   participate.

17-16     40.692  Procedural requirements waived for certain defects

17-17   included in amended complaint; joinder or intervention of

17-18   party after action is commenced.

17-19     40.695  Tolling of statutes of limitation or repose;

17-20   applicability.

 

17-21  H