In Holcomb Condo. Homeowners' Ass'n v. Venture, 2013 Nev. LEXIS 24 (April 14, 2013), available here, the court considered the effect of an arbitration agreement made part of the purchase agreements for the condominium. The arbitration agreement was attached to the purchase agreement, but stated that it was a part of and incorporated into the purchase agreement. The arbitration agreement contained a clause stating that the homeowner waived its rights under Nevada's construction related statutes of limitations, and instead agreed that all claims for construction defects must be brought within two years from substantial completion of the project, regardless of when the defects were discovered.
The AOAO brought an action for construction defects outside of the two year period in the arbitration agreement, and the trial court dismissed all of the the association's claims which were couched in negligence, negligent misrepresentation, breach of warranty, etc.
On appeal the Nevada Supreme Court noted that this was the first time it was faced with the question of whether parties can contractually modify statutory limitations for bringing suit. While determining that parties could do so, the court nevertheless reversed the trial court's decision and remanded the case for further review.
The court found that under existing Nevada law, parties can contract to shorten the time limit for claims for breach of warranty for construction defects, but this only applies to warranty claims.
More generally, statutes of limitations can be shortened by contract but only if the limitation is reasonable, is not unconscionable and does not violate public policy. Because the trial court did not consider these factors, the Supreme Court reversed and remanded the case for the trial court to make those determinations.
