Home-defect lawsuits are ‘out of control’

Launce Rake and Diana Sahagun

Sunday, May 14, 2000 | 10:52 a.m.

When it comes to construction defects, the sides are clearly drawn.

On one hand, homeowner associations and trial lawyers are filing hundreds of lawsuits and getting millions in court settlements and judgments for defective homes. They argue that their legal work is necessary to force builders and contractors to do work that should've been done right away.

On the other hand, the home builders, construction contractors and their allies charge that lawyers and homeowners associations are clogging the courts with frivolous lawsuits and are preventing repairs from getting done.

"The lawsuits are out of control," said state Sen. Mike Schneider, D-Las Vegas. "It appears in many cases. I'm talking the majority of cases that I've seen, the homeowners are settling for cash."

In some cases, legal fees for the attorney and construction-defect experts don't leave enough from a settlement or judgment to repair the source of the frustration, Schneider said. He also said attorneys are exaggerating claims to build bigger settlements.

"That's just silly," attorney Francis Lynch says. "This area of law is the kind of area where you can't fake anything. You have a crack in your wall, and you can see it. You can't fake it.

"Our clients come to us after they have tried to get everything fixed either through warranty or the builder," he said. "If the builder would follow the code, I'd be out of business."

Although a recent edition of the Silver Spike, the newsletter of the Southern Nevada Home Builders Association, criticized media reports "that incorrectly imply or state outright that construction defects are a problem in Las Vegas," in other forums the group's leadership admits that construction defects happen.

"There is a problem. In any human endeavor there are going to be problems," said Irene Porter, the homebuilder association president. "We recognize that that will be the case from time to time."

But "homes in the Las Vegas Valley are better today than they've ever been," she said. "The standards today are much higher."

Daniel O'Shea, an organizer with the Carpenters Union, believes much of the problem with defects comes down to an ill-trained work force and a lack of supervision. He said workers at a residential site make an average of $10 an hour, less than a third of what workers on commercial construction make.

O'Shea said developers and contractors use assembly-line production and pay lower wages because those methods keep the profit margins fat.

"The faster you build the house, the more money you make," he said. "You've got a prescription for a home that the owner is not going to be happy with."

Richard Franklin, a private home inspector, agrees. He said he regularly finds construction problems and ill-trained supervisors and day-laborers on homes going up.

"It is a general lack of professionalism, where it used to be you had well-trained individuals," Franklin said. "The last 20 years in housing, we haven't had it. You're drawing your cadre from the people who know nothing."

Porter denies that production techniques and wages have an impact on home quality.

Workers in residential construction are trained differently and use different kinds of equipment, she said. Porter characterizes the criticism of the production and wages as an attack on the construction workers.

John Gambatese, a UNLV professor and consultant to the Associated General Contractors, a trade group, agreed that "there's a need throughout the entire construction community for good qualified people."

"You have to take into account that they're putting up a lot of houses," he said. "They're going up fast; there are going to be mistakes. I do think the contractors try to take care of them as much as possible.

"There's a lot of good construction that goes on here in the valley," Gambatese said. "When you have a few bad cases, they tend to blow them out of proportion."

Attorneys for the home builders say that the industry is more responsive to complaints now than ever before.

And the first step for any homeowner with a complaint should be the Contractors Board, but homeowner associations and trial lawyers are bypassing that step, contractors and their allies say.

Margi Grein, the Contractor Board's executive officer, said that of more than 3,000 complaints that have come to the board within the last year, fewer than two dozen have been from associations.

And Clair Stoyer, legislative chairman of the Nevada Association of Retail Communities, the organization representing homeowners associations statewide, said associations are reluctant to go before the board because six of the seven members of the board are contractors.

Grein, however, points to the record of dozens of suspended and revoked licenses for contractors to show that the board isn't a rubber stamp for construction companies, but a consumer-friendly agency willing to enforce the rules.