Last session, contractors were upset over construction defect lawsuits.  This time, they’re joined by homeowners.

Homeowners who have testified before legislative committees or spoken to Construction Zone said that they aren’t upset at the contractors who built their homes supposedly so badly that gargantuan defect settlements are necessary to repair their properties. They’re disappointed in a system in which a major chunk of their settlement dollars go to lawyers as contingency fees and costs, and often leave them without enough money to make repairs.

At the same time they can’t afford to repair the property, they must declare their home "defective" to a potential buyer if they wish to sell it.

Recent hearings before the Nevada Senate Commerce & Labor Committee brought remarks from builders and homeowners who feel victimized by a system that seems inherently unfair.

As exists, contractors are denied opportunity to make repairs, essentially "locked out" of the property while a lawsuit is built against them alleging all kinds of defects. Offers to repair go unheeded or ignored.

Likewise, homeowners involved in suits are "locked out" of the process by their homeowner association’s board of directors. One homeowner learned that the builder had offered to repair her home. She was never notified, and said she would have accepted such an offer if she had known it was on the table. Rather than have hr home fixed, she became part of lawsuit that took several years and "won" her a settlement that is inadequate to make such repairs.

Construction Zone has spoken with multiple homeowners over the last year. Similar remarks were heard from various sources, overlapped into the following facts:

A resident of Rock Springs Vista III was upset at her attorneys over the settlement disbursement. "They got $6.4 million dollars and we got $15,000 each," she said.

That amount is not enough for her to effectively repair her condo the way she would like, she said, although she must now declare the home defective if she wishes to sell it.

"I know I can’t sell my house," she said. "My neighbor has been trying to sell his home for six months. He’s lowered the price three times, and the one offer he got fell through."

Rock Spring Vista III was one of the few defect cases to go to court.  The celebrated case went to trial and settled during proceedings for $16.4 million.  The lawyer’s contingency fees and costs added up to some $6.4 million.

"I know my neighbors don’t have anywhere near the defects I’ve got," a resident of Quail Park III told Construction Zone. She said her condo was built without flashing around the windows and the lack of it allowed rainwater to flood a guest bedroom. The water damage created mold, according to the homeowner, which then impacted her health.

Her case was settled out of court last fall. She reported being "Very pleased" with the settlement amount, but admits that her home had been almost completely redone with new paint, new wallboard and new carpet as part of the attorney’s "testing and emergency abatement."

She said that none of her neighbor’s units had the kind of extensive repair work her home received. "That’s okay," she said. "Their homes weren’t nearly as bad as mine."

Yet each of the 200-plus claimants received a settlement based on "real" defects existing in their home.

A resident of Desert Shores is involved in a lawsuit against the law firm that represented her in a defect suit. Her action is based on the fact that she, and other homeowners, believed that the settlement that would get was to be much more than what they actually received.

One homeowner testified before the committee. Nancy Estrada said on the record that the lawyers actively "rile up" the HOA board of directors, and tell them they can get a "big amount" by filing a lawsuit. Estrada said that the lawyers "get as much as we do," after the settlement is over, and that the money she received was not enough to make repairs.

Offers to repair are usually greeted warmly. It is when the builder does not make such an offer, or does a "band-aid" repair, that homeowners wish to pursue another form of resolution. Many of the major builders have instituted customer service departments that are highly responsive. One builder, Signature Homes, reported in testimony that homeowners in a development voted down a lawsuit in large part because of the good relationship they felt they had with the builder.

Disclosure laws in Nevada are strict. Construction defects must be disclosed to a potential buyer at the time of sale. According to the Division of Real Estate, the disclosure laws are mandatory filings on the part of sellers and their real estate agents. If a home has been party to a construction defect lawsuit, that information must be disclosed to a buyer.