Committee OKs construction-defect bill

Thursday, April 8, 1999 | 10:23 a.m.

CARSON CITY -- An Assembly committee Wednesday approved a bill allowing unhappy homeowners to collect up to $30,000 from a new fund to cure construction defects when a contractor refuses to make the repairs.

Assembly Bill 636, by Assemblywoman Barbara Buckley, D-Las Vegas, is the first major bill to move this session of the Legislature to answer the complaints of thousands of disgruntled homeowners, particularly in Southern Nevada.

The bill would allow homeowners to avoid going to court to get compensated for poor work. They could instead apply to the state Contractors Board, which would administer the fund.

Buckley said homeowners are often ignored in the fights among attorneys, home builders and insurance companies over the legal procedures and rights of those whose houses aren't up to par. This legislation would give them an option without having to hire attorneys and go through a protracted court battle.

The bill, which goes to the floor of the Assembly for a final vote next week, imposes an annual sliding fee on residential contractors to finance the recovery fund.

The recovery fund is capped so it does not grow too large. When it reaches its limit, which is 150 percent of what was paid out the preceding year in claims, the Contractors Board would suspend the fee.

The bill also limits to $200,000 the amount that can be paid out to repair defects on a single project.

Contractors would have to notify residential property owners of the recovery fund. Homeowners could still sue to collect damages, but the fund would offer an alternative if the contractor will not do repairs.

The committee also approved Assembly Bill 633 to give the Contractors Board more clout.

The bill, which also goes to the floor of the Assembly, requires a person seeking a contractor's license to have four years' experience as a journeyman, foreman, supervising employee or contractor in a specific classification.

All an applicant needs now is to have been a "worker" for four years, Margi Grien, executive director of the Contractors Board said.

The board has wanted "a better quality of contractor," she told the committee. The bill also would require contractors who want to increase the monetary limit of work on their licenses to submit a financial statement prepared by a certified public accountant.

The committee scaled down the higher fees sought by the Contractors Board. The board wanted permission to boost the fee for an application from $300 to $700. The committee agreed to $550. The committee agreed to raise the annual renewal fee from $300 to $450, not the $500 sought by the board.

Meanwhile, lobbyists for insurance companies and the Nevada Trial Lawyers Association report they are close to a compromise on rival bills involving the rights of homeowners.

Assemblyman Bernie Anderson, D-Sparks, chairman of the Judiciary Committee, told them to get together or there won't be a bill this session.

Home builders and insurance companies have complained that trial lawyers want to open the door wider for more litigation. Trial lawyers said the insurance companies want to restrict recovery by dissatisfied homeowners who feel they have been wronged by contractors.