One-year window on defect lawsuits causes controversy

Ben Kieckhefer

Wednesday, April 9, 2003 | 9:55 a.m.

CARSON CITY --- A bill imposing a one-year time frame for some construction defect lawsuits filed by homeowners was criticized Tuesday during a Nevada Assembly committee hearing.

"This bill isn't meant to be contentious," said the measure's author, Assemblyman John Marvel, R-Battle Mountain. "I think it's just a format to get everybody together."

But attorney Bob Maddox, one of many homeowners' rights advocates who showed up for the hearing on AB373, said a one-year filing period for lawsuits over manufactured product installations interferes with due process rights.

"This bill imposes unreasonably short time periods," Maddox said, adding that manufactured products such as windows could leak and cause a lot of damage -- but the damage might not be noticed until years later.

The bill also places a four-year limit on lawsuits from a defect in any plumbing, electrical or sewer system. The current limit is 10 years.

Mark Sektnan, assistant vice president of state affairs for the American Insurance Association, told the committee the limits were established using products' life expectancies and the change would stabilize the insurance market.

He said no construction insurer is making money in Nevada, driving up premiums and making coverage difficult to obtain.

The Judiciary Committee also reviewed AB449, requiring home builders to disclose any prior defect claims against them, whether they have insurance against defect claims and whether the subcontractors they used had any defect claims against them.

Assemblymen William Horne, D-Las Vegas, and Garn Mabey, R-Las Vegas, both questioned the bill's scope.

Mabey said it wasn't right to make subcontractors disclose they had been sued, regardless of whether they were found innocent. Horne worried that the disclosure could dissuade people from buying particular homes.

Maddox also urged approval of a third bill, AB446, saying it would help protect homeowners' rights to sue and protect subcontractors from defects they didn't know existed when they did their work.

AB446 provides that home builders can't write into sale contracts requirements for binding or nonbinding arbitration to settle construction defect claims.

It also eliminates the liability of subcontractors who physically conceal construction defects if they didn't know those defects existed. It would also require a contractor to provide an independent party to oversee any corrective action.