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Construction defect reform measure criticized as inadequate by building industry

By ThisIsReno

By Sean Whaley, Nevada News Bureau: A bill proposing reforms to Nevada’s construction defects law was called inadequate today in a hearing before the Assembly Ways and Means Committee.

John Madole, representing the Nevada Chapter of the Associated General Contractors, told the panel the best option would be to not proceed with Assembly Bill 401, proposed by Assembly Speaker John Oceguera, D-Las Vegas.

Madole said his organization has been seeking meaningful reform to the construction defects law, but that AB401 does not meet that test. Rather than waste time on a bill that is only “rearranging the deck furniture on the Titanic,” the committee should defeat the measure, he said.

AB401 would revise provisions regarding attorney’s fees, clarifying that they are not automatic and awarding them only to the prevailing party. It would also clarify the statute of limitations for lawsuits, from unlimited for willful misconduct to three years after discovery.

Committee Chairwoman Debbie Smith, D-Sparks, asked if the measure at least made some progress on the issue and so could be supported by the construction industry.

“A lot of times it takes time to get them where you want them to be,” she said. “There’s no interest in making changes and having something out of this issue versus nothing?”

Madole said he believes the bill would actually make things worse.

“It’s my opinion that this will actually impede the efforts in 2013 to get meaningful reform,” he said. “I think what will happen in 2013 is that when something is brought forward, that people will be told we took care of this problem in 2011.

“I have taken this to an attorney who is an expert and he told me that in his opinion there are about 15 things that wrong with construction defects,” Madole said. “The language in this bill would not even make the top five, so what’s the sense of just trying to make everybody feel good?”

Madole’s comments prompted Oceguera to call his comments “disingenuous.”

Oceguera said he met with building industry officials, including the associated general contractors, before the 2011 session to discuss necessary reforms. The bill contains the three most important reforms cited in those talks, he said.

“I asked for a list of the five most important things,” Oceguera said. “The three that are in this bill are the top three that you gave to me. So to say these aren’t important issues is disingenuous at least. These are the issues you told me you wanted to work on, and we worked on.”

The issue of reforms to construction defect law is in play as part of a budget deal struck by Gov. Brian Sandoval and members of both parties in the Legislature. In exchange for a number of reforms, Sandoval has agreed to extend some expiring taxes to add funding to the budget.

Successful passage of the reforms is key to getting enough Republicans to vote for the compromise.

Assemblyman Pat Hickey, R-Reno, said AB401 is not real reform.

“It does absolutely nothing,” he said Wednesday following announcement of the budget deal.

The bill is cited by Sandoval as a piece of the reform and budget deal.

The committee did not take immediate action on the bill.

Assemblyman Pete Goicoechea, R-Eureka, said the concerns expressed by Madole can be raised if the bill is passed by the Assembly and sent to the Senate for further hearings. As written, however, Goicoechea said he would have to oppose the bill.

Audio clips:

John Madole of the Associated General Contractors says the bill does not make any real reforms:

060311Madole1 :22 it any further.”

Madole says the bill would actually make it tougher to implement reforms:

060311Madole2 :17 problem in 2011.”

Madole says the proposed reforms don’t come close to the changes that are needed:

060311Madole3 :16 everybody feel good?”

Assemblywoman Debbie Smith asks if the proposed reforms are better than no changes at all:

060311Smith :18 issue versus nothing?”

Assemblyman John Oceguera says the bill makes substantive reforms in three areas:

060311Oceguera :22 we worked on.”