Schneider contends flawed laws and a lack of oversight led to the investigation into an alleged conspiracy involving Las Vegas homeowners association board members and a select group of construction defect attorneys, experts and construction companies.
According to law enforcement authorities, individuals planted on homeowners association boards steered business related to construction defects to certain lawyers and companies.
Search warrants issued by the FBI state the government is interested in “any and all documentation, correspondence and notes” related to 43 individuals.
In addition, agents are poring over ballots related to alleged corrupt homeowners association board elections.
“There is so much money in construction defect lawsuits, billions of dollars,” Schneider told the Las Vegas Review-Journal. “It’s not regulated; it’s not watched by anyone.”
Schneider said his priority is changing a 1995 bill, which is designed to help homeowners file construction defect lawsuits by establishing a process for pursuing such complaints. Mediation is to take place before litigation.
“The chapter is flawed and actually makes it too easy to do what these folks have done,” Schneider said. “It makes it too easy to sue.”
In an article published on the State Bar’s Web site, Reno-based lawyer John Boyden said the 1995 measure “constitutes a ‘golden goose’ for lawyers and experts.”
Boyden, who represents subcontractors often targeted by construction defect lawsuits, said the rewards are so high for homeowners’ attorneys and their experts that there is no interest in mediation.
“The pendulum has swung too far. There needs to be some happy medium and we’re just not there,” Boyden said. “It’s gotten out of hand. We pay some outrageous costs and fees in these cases.”
Schneider said attorney fees amount to 40 percent of the settlement if a case is litigated, making it difficult for homeowners to cover the cost of repairing defects.
He said construction defect cases are so common and lucrative that even out-of-state law firms are trying to take part in them in Nevada.