Nicholas D. Cowie of Cowie & Mott PA discusses construction defect law, particularly as it involves condominium associations.

An insightful review of the problems with Nevada’s construction defect law. Nevada’s construction defect law has lead to fraud and corruption, while providing little benefit to homeowners. Due to the broad provisions of the law, even work that exceeds building code requirements can be considered a construction defect.

Nevada uniquely has a statutory requirement that attorneys prevailing in construction defect cases are guaranteed fees from the settlement, often leaving homeowners insufficient funds to fix the alleged problems. Homeowners are then reluctant to admit to the litigation, for fear it will devalue their homes. With thirty-eight times the national average of construction defect claims, construction insurance premiums in Nevada are significantly above those of other states.

The California Court of Appeals recently ruled in Liberty Mutual Insurance Company v. Brookfield Crystal Cove, LLC that SB800, California’s “right to repair” law, does not “establish exclusive remedies for claims for actual damages for construction defects.” Two attorneys from Allen Matkins, Valentine S. How and Timothy M. Hutter, look at the history of SB800, the history of the court case, and its implications.

Their conclusion is that the court’s decision makes clear that claims that are time-barred under SB800 can still be valid under common law, citing the court’s decision that SB800 does not “establish exclusive remedies for claims for actual damages for construction defects.”