Nevada Financial Requirements, Monetary Limit & Bonds
Nevada ties a contractor's project size to its finances and requires a license bond and a recovery-fund payment. This chapter covers the monetary limit, the financial-statement tiers, working capital, the license bond, and the Residential Recovery Fund.
The financial statement and the monetary limit
The State Contractors Board sets a monetary limit on every license: the most the licensee may undertake in one or more contracts on a single construction site or subdivision site for a single client (NRS 624.220(2)). In judging financial responsibility the Board may weigh net worth and working capital (current assets minus current liabilities), among other factors (NRS 624.263(2)). The kind of financial statement an applicant files depends on the limit requested (NAC 624.593). For $25,000 or less, a statement on the Board's form with a verifying affidavit is acceptable. Above $25,000 and below $1,000,000, the statement must be compiled, reviewed or audited by an independent CPA. For $1,000,000 or more, it must be reviewed or audited by an independent CPA within one year before filing.
The license bond
Before a license issues, the applicant must file a contractor's license bond, or a cash deposit in its place, under NRS 624.270. The Board sets the amount, from $1,000 to $500,000, according to the contractor's financial and professional responsibility and the size of its operations. The bond gives owners, workers, and suppliers a source of recovery if the contractor violates the licensing law.
The Residential Recovery Fund
Nevada maintains a Residential Recovery Fund (NRS 624.470 et seq.), financed by residential contractors, that reimburses eligible owners of single-family residences for actual damages caused by a licensed residential contractor's misconduct when they cannot otherwise collect. Because the fund is tied to licensed contractors, an owner who hired an unlicensed person cannot recover from it.
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State-specific details
State exam facts
- State regulator
- Nevada State Contractors Board (NSCB)
- Prelicensing education
- Four years of relevant experience within the last fifteen years
- Passing score
- 75%
- Scored questions
- 60
- Time limit
- 120 minutes
Does Nevada require a state contractor license?
Yes. The Nevada State Contractors Board (NSCB) licenses contractors under NRS/NAC Chapter 624, using Class A (Engineering), Class B (Building), and Class C (specialty). The Board sets a monetary limit on each license, and the financial statement an applicant files depends on the limit sought (NAC 624.593): for $1,000,000 or more it must be reviewed or audited by a CPA.
What is on the Nevada Contractor Management Survey (CMS) exam?
The CMS Business & Law exam has 60 scored questions plus 3 unscored, runs 120 minutes plus 6 for the unscored questions, and requires 45 correct (75%) to pass. It is open book, and the only reference allowed is the Construction Business and Law Manual for Nevada. Applicants must show four years of relevant experience within the last fifteen years. A separate trade exam for the license classification is also required.
How does Nevada protect residential customers?
Nevada maintains a Residential Recovery Fund, and under NRS 108.245 a Notice of Right to Lien may be given at any time after first furnishing, but the lien then reaches only the 31 days before the notice and what follows. Nevada has no personal or corporate income tax but does impose the Modified Business Tax.
Sources: https://www.nvcontractorsboard.com, https://test-takers.psiexams.com/api/content/bulletin/296
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