By Shemilly A. Briscoe, Esq. and Timothy J. Geswein, Esq.

Reprinted from the Construction Law Section Newsletter, State Bar of Nevada (February 2010)

The Board’s mission to protect Nevada’s public’s health, safety, and welfare are met with a wide range of regulatory and disciplinary tools.  Among these tools is the ability to place a contractor on probation for a period of time to correct issues or violations discovered during the Board’s investigation.

The Board may implement probation when the Board is able to suspend or revoke the contractor’s license or otherwise discipline a contractor but determines the issues to be correctable. The Board’s Order implementing probation typically include terms that require the contractor to appear for personal interviews with the Board, submit documents and financial records to the Board, submit all contracts to the Board, cooperate with Board investigations, as well as comply with all Nevada laws and administrative rules and the other terms of the Order that implemented probation during the
entire probationary period. In exchange, the contractor is able to continue business by completing existing projects and contracting to start new work. This allows the contractor to comply with State regulations and keeps the Board timely informed of such compliance.

Oftentimes, a probationary period is offered by the Board and accepted by the contractor in lieu of license suspension or revocation. Probation is for a fixed period of time, but the Board may extend the probationary period or suspend or revoke the license if the contractor fails in its obligations under the probation order. If the contractor successfully completes the probationary period, the Board will conduct a hearing to lift the probation. During the probation period, the Board’s public records will reflect that the contractor is operating under probation as proper notice to the public. After exiting probation, the Board’s public records will be updated to reflect a successful end to the probation period.

Probation is an administrative burden on the Board because it consumes substantial resources to review, interview, and supervise the contractor. In some aspects, probation is a recognition that the contractor, although previously non-compliant with Nevada law, is worth the public’s investment in supervision to rehabilitate the contractor, to correct minor issues, and to encourage better business practices.

At first blush, few contractors would welcome the Board’s close supervision. However, the Board’s efforts strike a good balance between protecting the public and the contractor’s business interests. The probation period gives the contractor an opportunity to redeem itself not only in the eyes of the public and the Board, but to correct its business practices and operations. This opportunity should not be wasted by the contractor; by embracing the chance to improve internal controls and operations, the contractor can not only satisfy the Board that the contractor can be a valuable licensee, but it can also save the contractor’s business.