Las Vegas Sun

July 29, 2014

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Construction defect legislation remains contentious

CARSON CITY -- No issue will have been fought over more intensely, or more expensively this legislative session, than construction defect law.

Builders and subcontractors came to the session in February well-armed, with a team of lobbyists dedicated to stopping what they view as a flood of construction defect litigation.

They say the litigation is crippling an already struggling industry.

Lawyers for homeowners with shoddy houses, though less numerous, are also well organized. They say they're here to protect homeowners.

The fight has grown so intense that it is spilling over into legislation that is ostensibly unrelated, as happened in a senate hearing Wednesday.

Assembly Bill 215, offered by Majority Leader John Oceguera, a Las Vegas Democrat, would force contractors to buy liability insurance to get their license renewed.

Developers and their lobbyists say it's retaliation for Senate Bill 349, which would effectively gut the statute regulating construction defect litigation, known as Chapter 40, for its place in Nevada statutes.

Builders had lobbied for the Senate measure because they say it's led to a torrent of fake claims and exorbinant legal costs. Chapter 40 guarantees reasonable legal fees for plaintiffs in defect cases.

Some homeowners appeared Wednesday to testify for the Oceguera measure, saying they were sold bad houses by contractors without enough insurance to fix the defects.

Builders complained they'd be unable to comply with the Oceguera measure because the insurance would be hard to find and would be too expensive.

Oceguera said he duplicated language used by other states, and said he would work with the parties on a compromise.

The committee took no action.

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