Law Will Stiffen Penalties Against Failed Developers

By: Jenny Rabin
By: Jenny Rabin

We have an update tonight on a story we've been following for more than three weeks. The story of Reno-area homeowners who paid money for homes that were never completed.

Those homeowners testified before the state senate last week and today, the senate ammended a bill to make sure something like this never happens again.

Today was an important day for the homeowners who were left with little recourse.

First, the senate ammended a bill to include stricter regulations and penalties for contractors in Nevada. Secondly, senior management from the parent construction company attended today's senate vote and spoke out for the very first time.

"All those in favor say aye - aye. All those opposed? All right, thank you."

And with that, the state senate committee on commerce and labor approved the amendments to assembly bill 220 - amendments sparked by the testimony of people who purchased homes at Bella Terra in Arrowcreek in South Reno and at Canterbury Place in Northwest Reno.

The people testified that Solano Development took their money and never completed their homes.

"It will make prosecution criminally easier for the district attorney's office and for us, when the statute is clear," says Margi Grein of the Nevada State Contractors Board.

The amended bill broadens the definition of "construction fraud" to include diversion of funds, meaning when money for one project is used to pay for another. Diversion of funds would then be treated as a felony - punishable by fine and time spent in state prison.

The bill also requires new residential contractors or contractors up for their yearly license renewal, provide the contractor's board with evidence of financial responsibility.

If the contractor's finances are in question, then the board can then require them to do a number of things, including using a construction control company which would hold all monies paid to the builder by the homeowner.

Senator Warren Hardy\(R) Clark County]
"If you're using an independent construction company to build your home, please consider - to the public - using a construction control company," says Sen. Warren Hardy "It may add a percentage to the cost of the home but the headaches it will eventually prevent are immeasurable."

Today's senate committee vote was attended by Bill Rheinschild, the owner of RWR Homes, which is the company who has a financial interest in Solano Development and Sierra Sage.

The contractor's board suspended both companies' licenses after construction halted mid-way through their Reno-area projects.

"He's here to help commit money and people and help to identify the problem you've been reporting on and take correct action on the problems you've been reporting on and solve the problems you've been reporting on," says RWR Homes Executive Vice President, Craig Hamilton.

Hamilton says last week's senate hearing was the first time he heard about many of these problems.

"What happened with construction just stopping? You know, I don't know," Hamilton says. "I don't necessarily want to go back into the history of it. I just want to work on what I can do to help get it fixed," he says.

Hamilton says they are securing funding to try and get everything fixed and that they will be more than happy to get anyone who is owed money, their money back.

"I'd like to see everyone of these problems resolved to the highest levels of satisfaction that we can and then to be able to say we solved these problems and we like doing business here," Hamilton says.

He is inviting any homeowner affected by Solano Development or Sierra Sage to give him a call at his Southern California office. The number there is:

(818) 780-3334, extension 13.

Next week, investigators from the state contractors board will be touring the homes that are still not complete and then both Solano and Sierra Sage will have their hearing before the state contractors board on June 3rd.

That hearing will decide the fate of their construction licenses.

We will be covering both events as well as following this bill as it makes it's way to the Governor's desk.


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