Legislators weighing construction defects bill

Wednesday, March 19, 2003 | 11:11 a.m.

CARSON CITY -- Homeowners from Southern Nevada gave conflicting testimony today to the Legislature's Senate Commerce and Labor Committee about whether contractors have been willing to fix construction defects in their homes.

The committee opened two days of hearings on Senate Bill 241, sought by the construction industry to allow builders to correct problems before lawsuits are filed.

Lois Ostraat, owner of a condominium in Las Vegas, testified that an attorney sought to convince her homeowners' association to file suit. But she said the builder worked to have the problems fixed so a lawsuit was unnecessary.

"We're one of the few condominiums that are not in litigation," Ostraat said. "It's sad to think we're exception, not the rule," in advocating for passage of Senate Bill 241.

Betty Evanson, also a condominium owner in Las Vegas, said "deceptive practices" were used by an attorney to get the homeowners to file suit. She said he took pictures of alleged defects but later showed photos of other condominium projects.

Evanson said the board of directors of the association filed suit, but the homeowners rejected the legal action and tossed the board of directors out of office. She said SB241 puts the emphasis on fixing the homes instead of filing lawsuits.

But Herb Goldsmith of Duck Creek Village in Las Vegas testified there were plumbing, electrical, roof and water problems at the development and that it flooded on three occasions. The developer and the contractor were notified repeatedly, but they never made the repairs. A suit was filed and it was finally settled, he said. "There were three years of hell," he told the committee.

In the meantime, the same builder and developer constructed another project with the same defects, said Goldsmith.

The bill provides that contractors and subcontractors have a right to repair defects before any suit is filed in cases involving five or more homes. At present a suit must be filed first in cases involving five or more homes.

Robert Lewis of the Southern Nevada Homebuilders Association said there has been needless litigation and neither side is satisfied with the outcome. Bruce King, a subcontractor from Las Vegas, said insurance costs for contractors are rising. His insurance costs will jump by 500 percent in August because of the proliferation of lawsuits, he said.

King said, "Allow us to fix it," referring to defects. The bill still allows homeowners to sue if there are not satisfactory corrections, he said.

But Scott Canepa, representing the Nevada Trial Lawyers Association, argued the bill is "based on the false premise that homeowners have refused repairs."

In 120 major suits filed, the builders made no attempt to repair the defects, he said, adding there has been no evidence that any of the suits filed were frivolous.

Canepa said there is no evidence to show the insurance costs are adding to the cost of a home and he noted homebuilding in the Las Vegas area continues at record levels.

Robert Maddox of the Trial Lawyers Association said there is not a problem with the suits but with the shoddy construction practices of some contractors. He argued this bill will limit the rights of victims of poor construction.

Before the hearing, about 75 proponents of the bill, many of them wearing yellow t-shirts, paraded in front of the Legislature and the Sawyer State Building in Las Vegas waving signs that read "Let's fix it" or "Support SB241." The hearing was conducted in both Las Vegas and Carson City.