The HOA scandal

Four suicides, a single lawyer making more than $100 million, a man beaten severely, voter fraud, homeowner association manipulation, family companies left bankrupt, ripped-off homeowners and now dozens of federal indictments. These developments in Southern Nevada are collectively known as the "HOA scandal" - but, ironically, they have little to do with HOAs.

Rather, the mushrooming scandal is clearly caused by the Legislature's failure to change a single sentence of our state's construction defect laws.

Make no mistake - we are talking about huge amounts of money. The handful of specialized Nevada law firms abusing the construction defect loopholes have since 2003 grossed between $1.5 billion and $2 billion. The situation is so out of control that state Sen. Mike Schneider, D-Las Vegas, has requested a special investigative legislative committee be established with the goal of asking Gov. Brian Sandoval to call a special session of the Legislature to fix the law immediately.

The root cause of this billion-dollar corruption?

Under the NRS Chapter 40 "construction defect" law, lawyers are - unlike in traditional lawsuits - virtually guaranteed their legal fees. Thus, frivolous lawsuits abound.

The public tip of this scandal is reprehensible enough, but the mostly unseen consequences have been devastating for Nevada's construction industry. Already reeling from the economic collapse, many have been forced into bankruptcy, dragged into a seemingly endless series of class-action lawsuits having little or nothing related to any work actually performed.

As a contractor myself, I can testify for the industry that the results have been catastrophic, especially for smaller companies.

The public relations contest has been unequal; blue-collar workers against silver tongued shysters who feign innocence and react with hyped up indignation, claiming to be the champions of ordinary homeowners. However, the citizens of Nevada must take these barristers' claims with a healthy dose of skepticism and follow the money.

In truth, homeowners are pawns being fleeced, their property tainted with the "defective" label while a handful of lawyers rake in millions and laugh all the way to the bank.

AB285, which I introduced in 2011, proposed to change only a single sentence in Chapter 40, modifying the attorney fee clause. It was bitterly opposed by Nevada trial lawyers. Key members of the Assembly leadership refused to allow this simple fix to come to a vote. AB285 was modeled after legislation passed 19-1 in the Democrat-controlled Senate in 2009 - but, again, blocked by Assembly leadership.

As the FBI investigation into the Las Vegas Chapter 40/HOA scandal is proving, construction defect abuse is not only a financial disaster, but for some, lethal as well. Nor are we even close to discovering how deep the corruption reaches.

Due to the many millions of dollars involved, it will take committed leadership from both parties - and especially the governor - to root out this extremely well-funded and organized parasitic cabal.

Sen. Schneider is absolutely correct. A bipartisan, highly focused effort, led personally by Gov. Sandoval, is necessary to correct this gross miscarriage of the legal process - starting right now.

Ira Hansen, a Sparks Republican, represents District 32 in the Nevada Assembly.