June 22, 2009

The Las Vegas Sun this weekend published a major piece on this session's big lobbying battle in Carson City, pitting the trial lawyers against the construction industry over lawsuits claiming construction defects (governed by Chapter 40 in Nevada statutes). It's a good political post mortem: "On home defect legislation, lobbyists went to the wire."

Included was this side note:

In an ongoing investigation, the FBI appears to be looking into whether homeowner associations and their elections have been corrupted by businesses -- including possibly construction defect law firms -- so they could bring suits against builders and win those guaranteed legal fees.

In these alleged schemes, people would buy 1 percent stakes in homes and then win seats on homeowner boards, after which they would bring construction defect lawsuits and steer the legal work to favored firms.

Last September, the FBI searched the offices of homeowners associations as part of the investigation. See Las Vegas Review Journal here.

Meanwhile, "The Nevada Supreme Court will decide whether homeowners associations have the right to sue on behalf of individual homeowners in a case that could have a major impact on the number of construction defect cases filed in the state."