Lawmaker seeks change in billing laws

Art Nadler

Friday, Jan. 10, 1997 | 11:59 a.m.

Freshman Assemblyman John Lee is looking to change the way the residential contracting business operates in Nevada.

Lee, D-Las Vegas, is planning to draft a bill when the Legislature convenes Jan. 20 that will closely mirror home improvement guidelines in California.

Currently, Nevada contractors charge homeowners whatever they want as each phase of construction is completed on home improvements. Their fees might be 50 percent or more of the total cost. With no set standards, a homeowner could pay close to 100 percent of the costs before construction is finished.

"There is a major over-billing on the front end of jobs," Lee said. "A lot of contractors, who don't have a lot of money, use homeowner's (front-end) money to fund other projects. Then if they can't finish the jobs, they file for bankruptcy."

Lee feels Nevadans would benefit from a more structured fee policy similar to California.

The California law, in part, says that the downpayment shall not exceed $200 or 2 percent of a swimming pool contract, or 10 percent of the contract price for other home improvements.

Also, in California, a contractor signs an unconditional release on any future mechanic's lien, once the homeowner pays him. This way a subcontractor can't come back and sue a homeowner if the contractor doesn't pay him.

In Nevada, the lien laws currently allow a subcontractor to sue a homeowner, even if the homeowner paid the contractor.

Lee is hoping to give homeowners the same protection that commercial property owners currently enjoy. On a commercial project, an on-site property supervisor or the engineer decides how much money to pay a contractor as each phase is completed.

Commercial property owners also withhold 10 percent on each payment phase until 30 days after a project's completion date. This covers construction-fault repairs.

"The only requirement in Nevada is that a contractor post a bond," Lee said. "This will be good legislation. All we want to do is strengthen consumers' rights."