Fund finally kicks in to help victims of bad construction

Tuesday, Jan. 8, 2002 | 9:38 a.m.

CARSON CITY -- Homeowners who are victims of shoddy workmanship by licensed contractors finally can recover their losses under a 1999 law.

Those who are damaged can collect up to $30,000 from a state Contractors Board fund.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, who drafted the bill, said this should be "a big help to consumers. They won't have to hire an attorney" to process their claim.

Although the law was passed three years ago, part of it did not become effective until last July, and it took time to build up the recovery fund that now stands at $1.7 million.

In addition, the state Contractors Board adopted its regulations on the fund in September, but they were not given approval by the Legislative Counsel Bureau until November.

Sonya Ruffin, a spokeswoman for the state Contractors Board, said it has so far received 27 complaints, 22 of them from Clark County. She said Friday that two cases have been heard and the claims validated, but the amount of damages have yet to be determined.

Instances of poor construction have centered in Southern Nevada where the consumer complaints are the loudest.

Buckley said the fund can be used to recover losses if errant contractors "go belly up" and either can't or refuse to make repairs.

Recovery can be on anything from faulty brick walls to substandard swimming pools, Buckley said.

The idea for the bill, Buckley said, came from a constituent who had a faulty roof, but the contractor went out of business. The roof collapsed, but the homeowner collected less than $2 from the contractor's bond because other victims also filed claims.

Homeowners can still sue to collect damages, but the fund gives them a less cumbersome avenue to follow, Buckley said.

The homeowner is entitled to the money if the state Contractors Board finds there were actual damages "as a result of an act or omission of the contractor that is in violation of the law or regulation."

When a complaint is received, an investigation is started. The Contractors Board, or a panel of its members, hears evidence from both sides and then makes a decision, which is final and cannot be appealed to the courts.

Homeowners who receive payment must agree to sign over their right to go after any bond or surety to the Contractors Board. That bond, or any judgment the board may get from suing the contractor or the estate of the contractor, would replenish the fund.

The law places a $200,000 limit on each claim. The board also cannot let the fund dip below $200,000.

The money for the recovery fund is supplied by a yearly assessment on contractors, ranging from $100 to $500, depends on the amount of construction the company is allowed to build.