February 20, 2015

Nevada Homebuilders, Other Voices Applaud Passage of Construction Defect Reform

AB 125 will spur economic growth, ensure affordable housing options and protect consumers

Las Vegas, NV. – Today the Nevada legislature approved Assembly Bill 125 to clarify and restore the original intent of Nevada’s construction defect law – bringing homeowners and homebuilders together to quickly resolve construction defect issues. AB 125, the first major bill passed out of both the Assembly and Senate this session, addresses a problem that has festered in our state for more than a decade.

“We commend the Senate and the Assembly on the passage of AB 125. Senator Greg Brower working with his colleagues Assemblyman Ira Hansen and Assemblyman Erv Nelson led the charge on this important reform effort,” said Nevada Home Builders Association co-chair Jesse Haw. “Their efforts to pass AB 125 will protect homeowners from becoming trapped in embarrassing homeowner association scandals and the lengthy and costly lawsuits that have brought notoriety to Nevada’s Chapter 40 litigation and perverted the law’s original intent.”

The passage of AB 125, if endorsed with a signature from Governor Sandoval, will help homeowners get problems fixed quickly without having to resort to the time and expense of legal action.

A recent survey commissioned by the Nevada Home Builders Association and conducted by LUCE Research found that only two percent of homeowners involved in construction defect litigation sought out an attorney themselves and nearly 70 percent of homeowners only became aware of their involvement in construction defect litigation after the fact.  The passage of AB 125 puts an end to the destructive predatory practice of plaintiff lawyers ginning up lawsuits without the homeowners’ approval.

“The aggressive recruitment of homeowners and HOAs to file construction defect lawsuits turned Nevada into the worst construction defect legal environment in the country,” said Nevada Home Builders Association co-chair Rob McGibney. “The passage of AB 125 provides a path forward for homeowners and homebuilders to resolve construction defect issues in a manner not dictated by defect lawyer greed.  We’ve been working on this issue for more than a decade, and we applaud the Legislature for their work.”  It was notable in the committee deliberation on the reforms that the member of just one construction defect law firm admitted to making $200 million in construction defect lawsuits, and he was the sole opponent to testify on the reform law.


Commentary by others supporting Chapter 40 reform follows:

“Nevada’s subcontractors take great pride in our work and what it means to Nevada homeowners. We applaud our legislators for passing AB 125 to help restore fairness and efficiency to construction defect dispute resolution in our state.”

–Scott Donnelly, President
Nevada Subcontractors Association


“Widespread and imbalanced construction defect litigation has long held our state economy back. This reform of Chapter 40 will encourage construction of new townhouses and condominiums, which are important housing options for new families and new manufacturing employees coming to the area.”

–Tray Abney. Director of Government Relations
The Chamber of Reno, Sparks, and Northern Nevada


“By reforming construction defect laws, AB 125 creates a level playing field that will be fair to homeowners and contractors alike.  This reform will also benefit our economy by stimulating growth in our construction industry and putting hundreds of Nevadans back to work.”

–Paul Moradkhan, Vice President of Government Affairs
Las Vegas Metro Chamber of Commerce


“We are pleased to see the passage of AB 125. This bill will create much-needed balance in the system for repair of construction defects, and expedite the growth and recovery of an area of the housing market that has been lagging – construction of new townhome and low-rise condominiums. This type of construction is particularly important for first-time and entry-level home buyers, and vital for the recovery of our local housing market. Construction of this type of attached housing has been a frequent target of often-frivolous construction defect litigation. AB 125 will give homeowners the right to address and repair perceived construction defects and avoid costly litigation whenever possible.”

–Kevin Sigstad, 2015 President
Nevada Association of REALTORS®


The Nevada Home Builders Association commends the Nevada Assembly and Senate for taking action on this critical issue. The association urges Governor Sandoval to sign the bill to help bring Nevada law back in line with the rest of the nation.

The Nevada Home Builders Association is a non-profit organization dedicated to enhancing the quality of life by meeting the housing and community development needs of Nevada.  Founded by members of both the Southern Nevada Home Builders Association and the Builders Association of Northern Nevada, the NVHBA provides information and support to our members and consumers across the state of Nevada.  For more information, visit