Friday, October 12, 2007

Ruling limits liability on ADA lawsuits

A decision by the 9th U.S. Circuit Court of Appeals on a North Las Vegas case is expected to save developers of apartment buildings from the prospect of serious legal headaches.
A three-member panel of the Appeals Court ruled that builders of Las Vegas multi-family housing cannot be held liable indefinitely for faulty design or construction under the Fair Housing Act. The 2-to-1 ruling supported a reading of the act that says the statute of limitations on such claims begins when the structure is occupied — not when the fault is discovered.

The case began in 2004 when a disabled "tester" from the Disabled Rights Action Committee (DRAG) visited a complex called Craig Ranch Villas looking for violations of the Fair Housing Act. He and DRAG sued the developers and owners under the faulty design and construction clause of the Fair Housing Act.

"Basically, had they won, the liability of the original owners, developers and contractors would be limitless," said Josh Reisman, a Ballard Spahr lawyer who defended the case. "And it was construed very broadly so that everyone involved with the building, throughout its history, could be involved."

There is currently a statute of limitations holding developers and builders responsible for Fair Housing Act violations for two years from when the structure is occupied. The 9th Circuit's ruling is a relief for valley builders, architects and contractors who could have been held liable for faults on any property built after the Fair Housing Act went into effect in 1991. Often apartment complexes change hands multiple times between when they are designed and when they are occupied, leaving previous owners liable but with no control over possible fixes.

Las Vegas already suffers from a lack of affordable housing and builders of multi- family units generally serve that section of the market. Las Vegas homes for sale currently average $286k and many families have been priced out of the market. Had the 9th US Court of Appeals decided in favor of DRAG, there would have been no incentive for developers to build more multi-family units, knowing they could be sued indefinitely.