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Nevada’s new “residential improvements” law and contract requirements

On Behalf of | Jan 15, 2024 | BUSINESS & COMMERCIAL LAW - Business & Commercial Law

Most Nevada contractors are honest, hard-working people who want to do the best possible work for their clients. Unfortunately, some “bad apples” can make things more challenging for everyone.

Last year, in response to an increasing number of complaints to the Nevada State Contractors Board (NSCB), the state legislature passed legislation that the governor signed into law that limits how much payment a contractor can require a client to pay before they begin work on a residential improvement project.

Restrictions on up-front payments and more

The new law, which took effect last October, states that a contractor can accept no more than $1,000 or 10% of the “aggregate contract price” (whichever is less). The law also provides property owners with greater rights regarding modification and cancelation of contracts as work progresses (or doesn’t) and makes it easier to seek restitution of payments made for inferior or incomplete work. Further, the law provides detail about when “progress payments” can be required and how long the project is expected to take to complete.

Many Nevada contractors and groups that represent them like the NSCB are pleased with the contract requirements of the new law. They see the law as a big step forward in preventing the harm done by “shady” contractors who take a majority, if not all, of their fee upfront and then fail to finish the work, drag it out or don’t provide acceptable results. While many homeowners would never sign a contract that requires them to pay the bulk of the cost for a massive remodel project upfront, not everyone would think to push back on that kind of contract.

It’s crucial for all Nevada contractors to review their contracts to ensure that they comply with the requirements of the new law. They also need to understand their clients’ rights to better protect themselves from unnecessary legal issues. Having experienced legal guidance as companies review and revise contracts is essential to protecting the interests of all involved.