{"id":891984,"date":"2017-04-19T15:54:32","date_gmt":"2017-04-19T21:54:32","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=891984"},"modified":"2017-04-19T15:54:32","modified_gmt":"2017-04-19T21:54:32","slug":"builders-fear-litigation-reforms-dismantled-proposed-nevada-legislation","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/builders-fear-litigation-reforms-dismantled-proposed-nevada-legislation\/","title":{"rendered":"Builders Fear Litigation Reforms Could be Dismantled by Proposed Nevada Legislation"},"content":{"rendered":"

Sally Roberts | Northern Nevada Business Weekly<\/a> | April 17, 2017<\/p>\n

Nevada contractors feel like they’re facing a wrecking ball in the 2017 Nevada Legislative Session.<\/p>\n

Progress made in 2015 to make construction defect regulations more reasonable, according to the industry, could be dismantled by a pair of bills introduced in the 2017 session, Assembly Bill 462 and Senate Bill 450.<\/p>\n

“If (the laws) revert back, it will kill the market,” said Aaron West, CEO of Nevada Builders Alliance.<\/p>\n

West noted in particular the need for workforce housing in the region, which is enjoying an economic boom.<\/p>\n

The reforms of 2015 improved the market climate for developers to build condominiums, townhouses, and apartments priced so that lower incomes could afford them, West said.<\/p>\n

Before 2015, Nevada laws regulating how housing defects were handled substantially increased the risk for the builder, especially for multifamily projects, which almost guaranteed a lawsuit, he said.<\/p>\n

“The definition of defect was so lose, it wasn’t based on industry standards, it was based on opinion,” West said.<\/p>\n

“Attorneys were going to homeowners saying ‘we think you have an issue with your house. We’ll represent you and you’ll get some money.'”<\/p>\n

Attorneys could go to the homeowners association, which could file a lawsuit on behalf of everyone and individual homeowners would have to opt out or automatically be a part of it.<\/p>\n

It cost contractors millions of dollars and the cost of liability insurance skyrocketed, he said.<\/p>\n

In a $30 million settlement, “attorneys would get $25 million and $5 million was divided among homeowners,” West gave as an example. “But there was nothing in place to ensure anything went to repairs.<\/p>\n

“It was a fundamentally flawed system. Contractors steered clear of multifamily construction.”<\/p>\n

For years, the builders fought for reforms, finally succeeding during the 2015 Legislative Session.<\/p>\n

The reforms reduced the time to file a complaint from 10 to six years; removed the HOAs from being able to initiate litigation; and more clearly defined a defect.<\/p>\n

The reforms opened the doors for more work force housing.<\/p>\n

The changes in 2015 were a “reasonable reform to a difficult law,” said Mark Turner, a principal with CC Builders. Defect litigation laws “in Nevada were the most difficult in the country, even more difficult than in California.<\/p>\n

“Builders just opted to avoid that type of housing,” he said.<\/p>\n

That changed after the 2015 reforms took effect. Construction on multifamily projects increased significantly.<\/p>\n

In mid-March, CC Builders broke ground on a 105-unit townhouse project in Carson City called Mills Landing..<\/p>\n

The company would not have started the project without the reforms of 2015, Turner said.<\/p>\n

Assembly Bill 462 and Senate Bill 450 could set construction back.<\/p>\n

SB 450 awards attorneys’ fees automatically in a successful lawsuit.<\/p>\n

AB 450 dismantles the rest of the 2015 reforms.<\/p>\n

West, Turner and others in the building industry feel the reforms weren’t given a chance to work and to show that defects would be taken care without the harsh laws of the past.<\/p>\n

“It’s been in place two years and we haven’t seen any negative affects,” West said. “If anything, it’s been positive. \u2026<\/p>\n

“Not one of (the legislators we’ve talked to) have said ‘I was contacted by constituents that weren’t able to get a defect fixed.’ Not one. Just from a policy perspective, you’d think policy should be based on a need.”<\/p>\n

Even if the 2017 bills do not become law, the swift inclusion of the bills suggests the battle will need to be fought again in the next legislative session.<\/p>\n

With the possibility that the reforms could be undone this year or in the future, some contractors are hesitant to move forward with plans to construct workforce housing.<\/p>\n

“I don’t want to go near that,” Turner said of the potential for litigation presented by AB 462 and SB 450.<\/p>\n

Even construction of the Mills Landing project could come to a halt.<\/p>\n

“We’re on the fence. We would lose money if we didn’t move forward. But we could lose a lot more if (in a lawsuit),” he said.<\/p>\n

Despite the uncertainty, construction is moving ahead for now.<\/p>\n

“We’re continuing because the ball is rolling. It’s hard to pull back,” he added.<\/p>\n

Whether they take on new projects is more doubtful.<\/p>\n

“For us, the risk of building entry level housing, workforce housing, are just too great.” Tuner said.<\/p>\n

Click here to follow Assembly Bill 462<\/a> and Senate Bill 450<\/a>.<\/p>\n

The proponents of the bill could not be reached by press time. This story will be updated online at nnbw.com.<\/p>\n","protected":false},"excerpt":{"rendered":"

Sally Roberts | Northern Nevada Business Weekly | April 17, 2017 Nevada contractors feel like they’re facing a wrecking ball in the 2017 Nevada Legislative Session. Progress made in 2015 to make construction defect regulations more reasonable, according to the industry, could be dismantled by a pair of bills introduced in the 2017 session, Assembly… Continue reading Builders Fear Litigation Reforms Could be Dismantled by Proposed Nevada Legislation<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14,4,172],"tags":[9895,12,19,152],"class_list":["post-891984","post","type-post","status-publish","format-standard","hentry","category-construction-2","category-construction-defects","category-construction-law-2","tag-advise-consult","tag-construction","tag-construction-defects-2","tag-nevada","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nBuilders Fear Litigation Reforms Could be Dismantled by Proposed Nevada Legislation - 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