Construction Defect
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NRS CHAPTER 40 & THE EVOLVING AREA OF CONSTRUCTION DEFECT LITIGATION IN NEVADA by Andrea K. Pressler, Erickson, Thorpe & Swainston, Ltd |
Construction defect law has become a rather specialized body of law, consisting of countless hours of site inspections, expert witness consultations, invasive destructive testing, depositions, special master hearings and mediation upon mediation, with most, if not all parties, dissatisfied with the end product.
While Nevada Revised Statutes (NRS) Chapter 40 attempts to prevent the onslaught of litigation, it has become common knowledge to those that defend these types of cases that once a contractor, subcontractor or design professional receives NRS Chapter 40 notification from a homeowner, or most likely, their counsel, that litigation is near. This article will provide a broad overview of NRS Chapter 40 and its requirements. 1
NRS Chapter 40 Requirements
Prior to initiating full-blown litigation or amending a complaint to allege a construction defect cause of action, a homeowner must provide the contractor with written notification of the alleged defective conditions.2 This notice must contain “reasonable” detail of the defects, alleged damages and/or injuries of the residence or appurtenance, to include the cause and location of the defects, and the known nature and extent of the damages and/or injuries caused by such defects. 3 Such notice is not required where the contractor originally commenced an action against the homeowner. Following receipt of this initial notice, a contractor is required to respond to the allegations within 60 days. 4
Upon receipt of notice of construction defect allegations, the contractor is required to provide notification to any potentially applicable subcontractors, suppliers and design professionals who the contractor believes may additionally be responsible for the homeowner’s alleged defects. 5 This subsequent notice must be sent by the contractor within 30 days of receipt of the homeowner’s allegations and include a copy of the homeowner’s notice. 6
A homeowner is precluded from filing a complaint or adding a cause of action for construction defects unless he/she provides the contractor(s) a reasonable opportunity to inspect and potentially conduct repairs. 7 Failure to comply with this obligation permits the court to dismiss the matter without prejudice and order compliance with the NRS Chapter 40 requirements. 8
Within 90 days of notification of alleged constructional defects, the contractor must request an inspection of the homeowner’s residence, which the homeowner is required to provide access. 9 Within 30 days of receipt of the contractor’s notice, the subcontractor, supplier and/or design professional must conduct an inspection of the subject residence and provide the contractor with notification of any intent to repair the alleged deficiencies and an estimated length of time for such repairs.
For notice on four or fewer homes, the repairs must be completed within 105 days; for notice on five or more homes, the repairs must be done within 150 days.12 For residences that are less than one year old at the time of receipt of the notice, the time period is reduced to 45 days. 13
Another preventative measure before litigation may be commenced requires the parties to submit the matter to mediation, unless waived in writing. 14 Failure to resolve the matter at mediation permits the homeowner to commence the action in court. 15
For claims against design professionals, to include those involved with professional engineering, land surveying, architecture or landscape architecture, a professional affidavit by the attorney is required before such claims can be commenced. 16 The affidavit must state that the attorney has reviewed the facts of the case and consulted with a reputable expert and as a result of such review and consultation the action has a reasonable basis in law and fact. 17 Failure to file such an affidavit shall result in dismissal. 18
Under NRS 40.655, the recoverable damages in a construction defect case are reasonable attorney’s fees, reasonable costs of repair, reasonable housing costs for relocation during time of repairs, reduction of the home’s market value, loss of use and interest as provided by statute. Additionally, damages incurred in assessing the alleged defects, estimated costs, loss of use, reduction in market value and relocation costs are recoverable. 19
1 As a disclosure, this article does not address all the provisions of NRS Chapter 40 and the author recommends thorough review of the chapter in full if participating in this type of litigation.
2 NRS 40.645(1)(a).
3 NRS 40.645(2)(b) - (c).
4 NRS 40.645(6)(a).
5 NRS 60.6452(1).
6 NRS 40.646(1).
7 NRS 40.646.
8 NRS 40.647(1).
9 NRS 40.647(2).
10 NRS 40.6472.
11 NRS 40.646(3).
12 NRS 40.648(2)(d)(1) – (2).
13 NRS 40.672.
14 NRS 40.680.
15 NRS 40.680(5); 40.6884.
16 Id.
17 Id.
18 NRS 40.6884(4)(c).
19 NRS 40.655.
(Andrea K. Pressler is a Shareholder at Erickson, Thorpe & Swainston, Ltd., located in Reno, Nevada. She practices primarily in insurance defense and construction defect litigation. She graduated from Whittier Law School cum laude, where she served on the Whittier Law Review as the Managing Editor. She is a former law clerk of the Honorable William A. Maupin of the Nevada Supreme Court. She has served on the boards of the Northern Nevada Women Lawyers Association and Association of Defense Counsel of Northern Nevada. She is currently the Secretary of the Construction Law Section of the State Bar of Nevada. Email: apressler@etsreno.com)
