Builders in state relieved as defect litigation bill dies

Building professionals are cautiously relieved after Assembly Bill 462 died in committee.

The bill would have dismantled reforms achieved during the 2015 Nevada Legislative Session to construction defect regulations, reducing what had become a paralyzing risk, according to the construction industry.

When AB 462 was heard in the Assembly Judiciary Committee, “we packed the room, even an overflow room,” said Aaron West, CEO of Nevada Builders Alliance. “More than 100 folks showed up to oppose the bill” including representatives from the chambers, economic development organizations, and the construction industry.

Assemblywoman Maggie Carlton introduced the bill. Scott Canepa of the Nevada Justice Association presented the bill and several proposed amendments to the Judiciary Committee on April 11.

Even with amendments and the elimination of chunks of the original bill, it failed to move forward.

Rules for the 2017 Legislative Session require bills to be approved in committee by April 14 to stay alive.

By making litigation for construction defects too easy, the bill could have increased insurance premiums, risk and costs for housing construction, especially for affordable housing.

In an earlier interview with the NNBW, Mark Turner, a principal with CC Builders, said that, under pre-reform regulations, the likelihood of litigation for multifamily or workforce projects was so high that “Builders just opted to avoid that type of housing.”

CC Builders broke ground in March on a 105-unit townhouse project in Carson City called Mills Landing, designed to help meet the need for less expensive housing options in the growing region.

Turner told the judiciary committee that his partners would not have considered starting the Mills Landing project under the old construction defect rules, which AB 462 would have returned to.

“We’re trying to provide affordable housing for the workforce and we need all our options open to us,” West said.

Although the bill was allowed to die in committee, West said the industry continues to be on alert as pieces of the legislation could be attached to other bills.

“As they say ‘nothing is ever really dead until Sine Die,’” he said.