The truth about Nevada's Construction Defect Law

Legislative sessions prior to 2009 have included varying degrees of construction defect discussion and activity. As a result, trial attorneys have benefited to a large degree, while the construction industry and homeowners have not due to the improper use of Nevada Revised Statutes Chapter 40 Construction Defects law.

Consider a typical construction defect lawsuit scenario: A targeted group of homeowners are invited by a trial attorney to attend a community meeting. They will likely be informed of a problem one of their neighbors is experiencing with their home. They are led to believe that potentially all of the homes in their neighborhood may be or will be experiencing the same or similar problem. This they call a "construction defect." The homeowners are then encouraged to participate in a lawsuit against the builder, in order to receive a cash settlement. Homeowners are led to believe they will be getting free money from an unscrupulous builder as a result.

The process begins and the insurance companies take over. Every subcontractor who worked on the home is included in this lawsuit, whether the issue affects them or not.

While the homeowner waits, meeting after meeting is conducted with these parties, all on billable time, with guaranteed attorney fees included. On average, the attorneys charge up to 40 percent of the lawsuit settlement that is awarded, something possibly not disclosed to the homeowners at these meetings. Also, the builder does not have the right to repair any defects once the lawsuit is started, due to restrictions on communication between the builder and homeowner.

So, the homeowner may have a problem that cannot be fixed immediately, which must also be disclosed to future buyers of the property, while the attorneys' bill adds up.

Because of the many frivolous construction defect lawsuits that occur, insurance companies raise liability insurance for builders. These increased costs are naturally passed on to any future buyers in the form of higher sale prices.

At the expense of the builder, homeowners are able to go to trial free of charge, with the builder carrying the cost of the burden of proof. In effect, as soon as a construction defect lawsuit occurs, builders are assumed guilty, not innocent.

The Nevada State Contractors Board exists to help homeowners who may have dealings with the few unscrupulous builders that should not be in business. Occasionally there are legitimate issues that should and can be fixed. Nevada licensed builders and contractors contribute to the "Residential Recovery Fund," which is in place to help homeowners address these issues.

To help keep the cost of the American Dream more affordable in our state, please take these steps if you have a concern with your home: 1) Call your builder or contractor first. 2) Call your local home builders association for assistance or direction. 3) Call the Nevada State Contractors Board.

Don't forget, trial attorneys benefit the most when you contact a trial attorney or jump on the "construction defect lawsuit" bandwagon.

- For information, contact the Builders Association of Western Nevada at 775-882-4353 or visit www.bawn.org. BAWN is a professional organization representing the building industry in Nevada.