Homeowner's Rights Against Faulty Construction
By The Law Firm of Gerard & Associates

Each year, thousands of property owners are shocked to discover that their new homes are built or designed with significant construction defects. Typically, these individuals carefully purchased new homes to take advantage of modern building codes and the representations of quality advertised by their builder/developer. Now with the builder's one-year warranty period expired, they are at a loss as to what to do and to whom to turn.

The following Q & A provides a useful explanation of Nevada residential construction law and its procedural guidelines set forth in Nevada Revised Statutes 40.600, et seq., the Nevada construction defect statute.

What is a construction defect?

It includes a defect in the design, construction, manufacture, repair or landscaping of a new residence where there is a failure to build in a reasonable workmanlike manner or a failure of the home to perform as reasonably intended. Examples include large cracks in the foundation, leaky roofs, poor drainage, and inadequate HVAC systems.

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Who is responsible for defective conditions?

The contractor who develops, constructs, alters, repairs, improves, or landscapes a residence or sells a residence in which any part of it was constructed by his employees or subcontractors.

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What are my recoverable damages?

Damages may include reasonable attorney's fees, cost of repairs, expenses for temporary housing during repairs, reduction in market value, loss of use of the residence, personal property damaged by the defect, cost of experts and any interest provided by statute.

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How much time do I have to make a claim?

Regardless of the builder's claim of a one-year warranty, Nevada law allows a Homeowner to make a claim up to 12 years after substantial completion of the home, in certain cases. Shorter time periods of 6 years, 8 years, and 10 years exist for patent, latent and known defects; however, the actual time may be as short as 2 years. These statutes of limitations and repose are complicated and are triggered by specific facts. We highly recommend that you consult a lawyer on your individual case.

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How do I make a claim?

A Homeowner is required to strictly comply with the following procedural guidelines before they may file a lawsuit against their builder/contractor:

  1. Homeowner must give written notice by certified mail, return receipt requested, to the builder/contractor specifying in reasonable detail the defects, damages, or injuries that are the subject of his claim(s).

  2. Upon written request, the homeowner must provide reasonable access to the builder/contractor to inspect the property for the claimed defects.

  3. Within 90 days after the builder's/ contractor's receipt of notice, the builder/contractor must provide written notice via certified mail setting forth his response to each claimed defect. The builder/contractor may or may not provide an offer of money compensation or actual repairs to be performed by a licensed contractor.

  4. Assuming no agreement or settlement, the Homeowner and builder/contractor must submit the claim to mediation (unless waived in writing by both parties).

  5. In the event mediation does not resolve the dispute and at least 120 days have elapsed from the Homeowner's notice of claim, the Homeowner may file its lawsuit.

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What if a lawsuit is necessary?

A. N.R.S. 40.600 et seq. is a balanced Statute, providing both valuable protections to a Homeowner with a valid claim, as well as economical disincentives (i.e., payment of contractor's attorney's fees) to a Homeowner who rejects a reasonable settlement offer or persists in making a frivolous claim. It is therefore strongly recommended that you thoroughly review your claims with a qualified lawyer and construction expert before making this most important decision.

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In conclusion, we advise each of our clients, never make a "mountain out of a molehill." Each significant defect that you allege to exist within your property must be later disclosed to a would-be buyer. However, there is no question that a Homebuyer is entitled to the quality product the builder/developer represented and that valid claims should be pursued.

The law firm of Gerard & Associates, LLP represents Homeowner's Associations and owners in their claims for defective construction. Attorneys with this firm helped to draft N.R.S. 40.600-40.695, the construction defect statutes, and served as course director and speaker for the Nevada State Bar Seminar, Construction Defects '2000. For further information, or for a copy of A Consumer Rights Guide for Nevada Residential Property Owners, please call (702) 251-0093 or fax (702) 251-0094. Web address: www.gerardlaw.com.

The preceding is for general informational purposes only; does not provide specific legal advice; and is not meant to be relied upon as applying to a particular set of facts or circumstances. An attorney-client relationship is not intended nor created by receipt of this Guide. Although every effort has been made to ensure the accuracy of the information contained herein, no warranty is made, either express or implied, and neither the publisher nor the authors assume any liability in connection with its use.

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