New Mandatory Elements for All Contracts for Residential Improvement Work in Nevada
This summer, the 82nd Session of the Nevada Legislature passed Assembly Bill 39. This Bill proposed revisions to Nevada’s statutory provisions relating to contracts for work concerning certain residential improvements and authorized the Nevada State Contractor’s Board to adopt regulations establishing mandatory elements to be included in such contracts. Nevada Governor Joe Lombardo approved A.B. 39 on June 2, 2023, and A.B. 39 became effective this month, on October 1, 2023. The mandatory elements listed in A.B. 39 are now enforceable Nevada law, and with limited exceptions may not be waived or limited by contract, or in any other manner.
A.B. 39 should be studied by all residential contractors, defined in the Bill as a contractor who is licensed pursuant to NRS Chapter 624 and who contracts with the owner of a single-family residence to perform work concerning a residential improvement.
The following is a non-exhaustive list of mandatory elements A.B. 39 added to Chapter 624 of the Nevada Revised Statutes:
Any contract for work concerning a residential improvement must contain in writing the following substantive information:
- The name of the residential contractor, his or her address and contractor’s license number and the monetary limit on that license.
- The name and mailing address of the owner of the single-family residence on which the work is being performed and the address or legal description of the property.
- The date of execution of the contract.
- The estimated date of completion of all work to be performed under the contract.
- A description of the work to be performed under the contract.
- The total amount to be paid to the residential contractor by the owner for all work to be performed under the contract, including all applicable taxes.
- The amount, not to exceed $1,000 or 10 percent of the aggregate contract price, whichever is less, of any initial down payment or deposit paid or promised to be paid to the residential contractor by the owner before the start of the work (which may not apply if the residential contractor files for a bond of $100,000.00 with the NSCB or been granted relief by the NSCB pursuant to NRS 624.270).
- A statement that the residential contractor has provided the owner with the notice and informational form required by NRS 624.520 and 624.600.
A.B. 39 also sets forth requirements for the form of the agreement, including:
(a) A method whereby the owner may initial provisions of the contract, to indicate that those provisions were read and understood.
(b) In close proximity to the signatures of the owner and the residential contractor, a notice advising the owner of the following:
- The owner may contact the NSCB if assistance is needed to clarify any of the provisions of the contract that the owner does not fully understand;
- The owner has the right to request a bond for payment and performance if such a bond is not otherwise required;
- The owner may contact an attorney for an explanation of the owner’s rights under the contract; and
- If the contract was explained in a language other than the language in which the contract is written, the owner may ask for a contract that is written in the language in which the contract was explained.
For brevity, not all mandatory elements of a residential improvement contract are included in this article. Additional noteworthy provisions of A.B. 39 require the residential contractor to furnish a copy to the owner a legible copy of all documents signed and receipt for any money paid to the contractor by the owner. All such documents must be printed in at least 10-point bold type.
For a full review of the revisions and new requirements added by A.B. 39, please view the text of the Bill. A.B. 39 is accessible at: https://www.leg.state.nv.us/App/NELIS/REL/82nd2023/Bill/9568/Text
If you require guidance regarding these changes to Nevada law, the attorneys at Lemons, Grundy & Eisenberg are available to discuss the effects of this legislation on existing and new residential improvement contracts.