What’s on the horizon for construction industry

Nevada’s construction industry is a conglomeration of varied political interests. Commercial and industry project owners, designers, residential homeowners, general contractors, construction managers, subcontractors, materials and equipment suppliers, union benefit trust funds, lenders, surety and insurance companies and title insurers all are affected by changes to the state’s construction laws.

With the entire government now controlled by Republicans, such groups can expect substantial change in 2015. Some areas to watch closely:

Residential construction defects

This has been an area of legislative dispute since its enactment 20 years ago. Subcontractors can expect changes that will make them responsible only for their own errors and limit their liability for problems they did not cause.

There also likely will be changes to rules defining what a defect is, how long a time frame a homeowner has to bring a lawsuit for defects, how attorney and expert fees are handled and what types of buildings the law considers residential dwellings. Outright repeal of the law may be considered but is unlikely to pass.

Collective bargaining and prevailing wage laws

Laws affecting union contracts and how prevailing wages are calculated and determined may see some reform, although sweeping changes are unlikely. Nevada’s method of calculating prevailing wages undoubtedly will get a review.

Prevailing wages are significantly higher here than surrounding states, including California, and seriously affect Nevada’s ability to build public facilities. With school construction a high priority, altering how labor rates are calculated may be a focus.

Mechanic’s lien laws

Mechanic’s liens give contractors and design professionals a security interest in a construction project to ensure they get paid for their work. Nevada has some of the most contractor-friendly lien laws in the country.

Construction industry groups want substantial changes, but there is little consensus on specifics.

If bills are introduced, expect them to deal with the issues of construction payment retention (money withheld from each payment by the owner until the project is complete), payment security for tenant improvement projects and building codes.

Infrastructure and public works funding

Several bills appear to address public works construction funding. School construction measures, as well as amendments to fuel tax indexing, are likely.

There also likely will be a push to protect the highway construction fund, which has sometimes been used to plug deficits in the general fund, and there may be legislation to make it easier for public-private partnerships to be formed.

Finally, expect to see changes introduced regarding the use of the construction management concept in building public projects. The technique allows a general contractor to become involved with a project during the design phase, to streamline construction and eliminate disputes.