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Construction Litigation Still Major Concern for Contractors
By Joe Wheeler

     “When you talk to a customer who says there’s a problem, you fix it,” Steve Hill said.  “But when you get a list of problems on 200 homes, you can’t do that.”
    Hill listed a lack of specific defect charges as one of many problems lingering in the wake of construction defect reform efforts in 2003 – and said that construction companies in Nevada still face an insurance crisis that will continue to drive up the cost of a new home.
    “While we were in the 2003 legislative session, the median cost of a home was $200,000,” he said.  “Today it’s $300,000.  Construction defect litigation is not the only reason for that, but it remains the big reason we don’t have enough condos.”
    Hill made his remarks at the Nevada Subcontractors Association June meeting, and weighed the overall effects of SB 241, which rewrote Nevada ’s construction defect laws.  The association, and Hill as chairman of the Coalition for Fairness in Construction, played a large part in getting the bill passed.
    Hill, owner of Silver State Materials, has been active in state politics for some time, and served as chairman of the Construction Liability Task Force in 2002.  The task force was formed by Nevada Commissioner of Insurance Alice Molasky-Arman and included builders, trade contractors, insurance people and a representative from the Nevada Trial Lawyers Association.  The task force filed a report which was used as a model to draft provision for SB 241 in 2003.
            

     “The main things we were after in 2003 was the right to repair, and we now have the right to repair,” Hill said.  “We wanted a neutral third party to be involved in the process, we worked on the issue of amended complaints, worked on extrapolation, and worked on getting real specificity.”
    After two years and another legislative session, which was nearly devoid of construction defect discussions, Hill said that contractors are still not getting specific list of actual defects, and as many lawsuits are being filed as they were previously.  The 2003 law required both parties to approach the “neutral third party” for an opinion about the real nature of the alleged defects (that party being the State Contractors Board), and Hill said that in 2005 the word “and” was removed from the law so that either the homeowner or the contractor can now seek such an opinion. 
    "I
don’t think there are 10,000 homes in the valley that need a lawsuit,” Hill said.  “What they’re getting is a lawsuit that prevents them from getting fixed.”

    
Actually doing repairs has become fraught with risk, as well.  If a contractor receives a notice of a defect and commits to doing a repair, he doesn’t get any kind of release for work performed, either past or present. Hill said there is no one to certify the work, and the contractor can be sued for both efforts.
    “We made a genuine effort in 2003,” Hill said.  “But left the same problems on the table.”  

Contractors Urge Continued Efforts

    “This is an outstanding organization that has come a long way in six years,” Bruce King said at the June meeting of the Nevada Subcontractors Organization.  “There’s not another state in the union in which a subcontractor has rights in construction defect litigation.”
    King, a third generation contractor with Pete King Nevada Corporation, said that in the 1990’s construction companies weren’t paying attention to politics and “some folks came in and passed laws that have made things the way they are.”
    Ken Cox, outgoing president of the association, said that the best and most effective thing his company did when it came to construction defects was join the Nevada Subcontractors Association.  “To survive in the construction industry today, management has to be creative and competitive,” he said.
    He and King called for subcontractors to continue supporting the association as it fights for balance between the homeowner’s right to a high-quality home and the subcontractors’ right to work without fear of being sued out of existence.
    King remains optimistic that positive changes can be made.  “I refuse to believe that that this is how it’s going to be the rest of my life,” he said.  “If it is, we won’t have solid, stable construction companies.”

NSA Elects Officers  

    The Nevada Subcontractors Association elected officers for the 2005 to 2007 term.  Gary Sturm of GMS Concrete will head the association as president, replacing Ken Cox of Cox & Sons Plumbing who will remain on the Board of Directors as past president.  Mike Colvin of Concrete Services was elected secretary and Louie Polish of Sun City Landscapes was elected Treasurer. 
    The remaining directors are Doreen Coddington of The Roofing Company; Ken Dillon of D & D Roofing and Sheet Metal; Scott Donnelly of Willis Roof Consulting; Bruce King of Pete King Nevada Corporation; Steve Menzies of Efficient Electric; Jim Pope of Pacific Stucco; and Darren Wilson of Sierra Air Conditioning.  


Directors Honored at Luncheon
Longtime NSA directors Henry Sharp and Len Nevin were honored for their many years of service to the association at the NSA’s June meeting.  Sharp and Nevin were part of the original group of contractors who got the association started, and lobbied during the 1999, 2001, 2003 and 2005 legislative sessions.  Pictured (l to r) Directors Ken Cox and Darren Wilson with Henry Sharp and Len Nevin.

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