A three-member panel of the Appeals Court ruled Sept. 20 that builders of multifamily 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.

"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."

The case, Garcia v. Brockway, involved a North Las Vegas apartment complex built in 1997 without some required handicap accessible features.

Reisman represented Michael Turk, a former officer of the firm that built the apartments and a part-owner in a company that recently purchased the apartment complex out of foreclosure.

The case began in 2004 when a disabled "tester" from the Disabled Rights Action Committee (DRAG) — a Utah-based activist group — visited the complex looking for violations of the Fair Housing Act.

The tester, Noll Garcia, found the property lacked some requirements including curb cut-outs near handicapped parking spaces and accessible paths to the complex pool.

He and DRAG sued the developers and owners under the faulty design and construction clause of the Fair Housing Act.

They sought retrofits on the property at 370 Casa Norte Drive, now called the Craig Ranch Villas, and monetary damages.

The case, filed in 2005, was thrown out of District Court because the statute of limitations on such cases had expired in 1999.

DRAG appealed, arguing that the two-year statute of limitations should not go into effect beginning when the apartment buildings are occupied, but when a violation is discovered.

Representatives for DRAG did not return telephone calls.

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.

"The developer has no power to force the owner to allow them to do any retrofitting," Reisman said. "They would be under limitless liability forever. They could be sued again and again until the owner makes the repairs or allows them to repair. From the builder's standpoint, it was really a mess."

Reisman said it could also have shut down low-income housing development in the Las Vegas valley, had the court supported the activists' stance.

"I was concerned, from a social standpoint, that if the statute of limitations was suspended, if builders were potentially liable forever, why would they build multi-family housing?" Reisman said. "It could potentially freeze multifamily housing building — generally your lower income housing — which we have a dearth of as it is."

Disabled activist groups still have recourse for inaccessible apartment and condo complexes under the Americans with Disabilities Act, but cannot sue the site's original builders under those laws. And they can still sue builders of noncompliant buildings before the 2-year statute of limitations runs out.

"This was an area of law that needed clarification and DRAG genuinely wanted to clarify this area of law for the disabled and the builders," Reisman said. "They genuinely wanted to retrofit this building. I don't think their motives were financial. I commend Richard Armknecht and DRAG for having brought this issue to the fore and helping this area of law get decided."

DRAG seems to already be taking a different tactic in its fight against inaccessible multifamily housing. On its Web site (www.disabledrightsaction.org), the group advertises that it is seeking testimony from disabled tenants in certain apartment buildings in Washington state that are known to be noncompliant.

The group could still appeal the three-judge panel's decision to the full 9th Circuit Court or the U.S. Supreme Court in an attempt to overturn the ruling.