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One Year Anniversary of Major Change in Nevada’s Construction Defect Laws

February 24, 2016

County Clerks Report Sharp Increase in Filings Experienced Throughout Nevada

One year ago today, Nevada adopted the most significant changes in over a decade to its construction defect laws. One of the more impactful changes in the new legislation (generally referred to as “AB 125”) was the elimination of differing statutes of repose periods for patent, latent and hidden defects in favor of a single, uniform statute of repose. Under AB 125, construction defect claims must now be brought within six (6) years of substantial completion, regardless of whether the alleged defect is patent or latent in nature. AB 125 included a one year ‘grace period’ before the six (6) year statute takes effect; this grace period expires on February 25, 2016. As this deadline approaches, there has been a sharp increase in the service of pre-litigation notices and the filing of construction defect lawsuits in both Clark County (Las Vegas) and Washoe County (Reno), Nevada for claims involving homes that closed escrow 6 to 10 years ago. We expect these new filings will generate a substantial amount of motion practice before the Courts concerning the many nuances of AB 125. A few of the many issues that will likely be the subject of motion practice include:

• Which alleged defects are allowed under the new definition of a construction defect;
• Which claims are timely, given the new statute of limitations; and
• Whether lawsuits filed before the pre-litigation processes were completed should be dismissed.

The volume of new filings is expected to clog the court dockets, and we would anticipate that many rulings may ultimately be appealed as the litigants and the Court seek to define and navigate the new construction defect litigation landscape in Nevada.

To date, Wood Smith Henning & Berman’s Nevada Office has been on the forefront of aggressively litigating these new requirements with both the Plaintiff Bar and the courts, with all sides offering widely divergent positions. With the sheer volume of new cases filed (over 30 new cases filed in 3 days), we believe it is important for builders to manage these cases strategically with creative approaches, given the likelihood of conflicting rulings in the various courts as these cases proceed forward.

 

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