Defects issue draws hundreds as Assembly hearing starts

Erin Neff

Thursday, May 8, 2003 | 11:03 a.m.

CARSON CITY -- Yellow-shirted ralliers on both sides of the construction defects issue packed two meeting rooms in the state capitol and another in Las Vegas this morning as a key proposal got its first Assembly hearing.

Senate Bill 241, which establishes a timeline for correcting defects in homes prior to lawsuits being filed by homeowners, drew hundreds of interested parties filling eight sign-in sheets to speak on the measure.

The Coalition for Fairness in Construction, individuals supporting the bill and siding with home builders, picketed outside the Legislative Building in Carson City and outside the Sawyer State Building in Las Vegas. Several homeowners, affordable housing advocates, builders, contractors and statisticians lined up to testify in favor of SB241.

The bill provides contractors with a right to repair by stating a homeowner must tell the builder about the defect. The builder would then have 150 days to repair the problem regardless of the number of homes involved. The homeowner would have the option to sue at the end of the period.

"SB241 will help homeowners get problems fixed promptly and professionally, while protecting existing homeowner rights," said Coalition Chairman Steve Hill, president of Silver State Materials Corp. in Las Vegas. "We need real reform this session."

Bill Balsi, president of Valley Concrete Co. in Sparks, said this morning that lawsuits are driving up liability insurance costs so high that his premium has increased from $75,000 to $450,000.

"I was faced with the decision of keeping the company operating, or closing the doors and putting 90 people out of work," Balsi said. "I'm here today, still in business, because of the hope that SB241 brings."

Trial lawyers, whose supporters comprise Safe Homes Nevada and also wear yellow T-shirts, object to SB241 because they say there is no problem with existing law and no proof that rising liability insurance costs are driving up the price of homes.

Attorney Scott Canepa says SB241 is a major step backwards, in part because homeowners are not entitled to recourse if defects do not result in property damage or personal injury. Plaintiffs' attorneys were expected to provide testimony in opposition to the bill this morning.

SB241 passed the Senate on March 21 by a 17-3 margin, with three Democrats opposing the measure because they said it did not provide homeowners with enough protection. The Democratically-controlled Assembly Judiciary Committee has pledged to amend the bill to accommodate more of the plaintiffs' attorneys' concerns.

Coalition members feel they face an uphill battle in the Assembly, in part because the Judiciary Committee has already killed three construction defect bills this session.

Committee Chairman Bernie Anderson, D-Sparks, was expected to assign SB241 to a sub-committee with admonitions to both sides in the issue to reach a consensus on several key areas of dispute.

Giving homeowners the right to repair is something both sides say they want. Lawyers said existing law makes it impossible to get a builder to fix a dangerous defect because there is no penalty if the builder doesn't act immediately.

Builders said homeowners currently cannot serve notice of a defect unless they sue. Another issue Anderson has said he wants the sides to reach an agreement on is the way subcontractors are sucked into defect cases for which they have no responsibility -- such as a fireplace installer sued in a case in which shifting soils caused defects.

But consensus is not likely on the third main issue on which Anderson wants the sides to agree -- protecting homeowners' rights.

Irene Porter of the Southern Nevada Homebuilders Association said this morning she was doubtful any construction defect law would be passed this session."There's just too much money in it for (the lawyers)," Porter said.