Nevada Contractor’s Licensing
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Nevada Contractor licensing requirements are far more disciplined than new applicants and parties from other states expect; for example, solar contractors, and water conditioning distributors have different minimum licensing requirements than electrical or plumbing professionals must have. Attaching a cell tower to an existing building requires an A25 license, and commercial property owners in Nevada must employ a licensed contractor in order to hire HVAC and plumbing repair projects on their properties. These are just a few examples of areas where the Nevada State Contractors Board can cite unsuspecting or non-local parties.
In Nevada, a contractor license specifies a discipline in which the professional will be licensed to operate referred to as the “classification.” A licensed plumber cannot hold himself out to also be a licensed electrician–unless he holds two separate licenses in both fields. In order to obtain a license in any classification, an applicant must submit a written application with the Nevada State Contractors Board, associated fees, and meeting the experience and criminal background requirements.[i] This information is located on the NSCB website.
At Briscoe Law Group, we assist people with determining whether a license is necessary, what license is appropriate and submitting a complete application for timely processing. Also, the Nevada State Contractors Board requires prove up of a company or person’s financial condition which can limit the scope of a license to only permit small amounts of work on commercial or residential buildings thereby eliminating many projects to a new licensee. Briscoe Law Group works with people to improve financials and assists with disciplinary issues as they arise for contractors.
Out of State Contractors and Businesses prefer to have counsel “on the ground” in Nevada when their principal corporate office has an issue or a timely disciplinary problem to resolve. Briscoe Law Group works to bring its clients into compliance when there are changes in the law or new requirements to be fulfilled. We also work with other attorneys to assist their clients with NSCB issues.
If you want to apply for a license, feel free to contact our office to discuss requirements and options based on your specific situation and needs. Initial Consults are free by telephone or in person. Allow us to simplify this experience for you.
[i] Obtain an Application for a Contractor’s License from any office of the Nevada State Contractors Board or by telephone from the Nevada State Contractors Board’s 24-hour automated public information line at (775) 688-1141 or (702) 486-1100, or via the Nevada State Contractors Board Web site, www.nscb.state.nv.us.
Decision to file
Bankruptcy laws exist to assist business owners, including Nevada contractors, with reorganization. When contractors encounter financial problems, the typical course of action is to consult a business or bankruptcy attorney and a CPA regarding the best plan to preserve the assets or to move clearly away from the growing debt and start over. Sometimes bankruptcy appears to be a viable solution for contractors struggling to cope with financial dilemmas. However, a common question that arises for contractors pertains to a bankruptcy’s relationship with a state-issued contractor’s license.
Many bankruptcy attorneys in Nevada are neither informed nor understand the implications of a contractor’s bankruptcy with the Nevada State Contractors Board (the “Board”) and the potential problems a bankruptcy creates relating to the contractor’s “financial responsibility,” a statutory requirement for licensing. Specifically, a licensee or an applicant for a contractor’s license must prove financial responsibility by demonstrating past and current financial solvency and expectations for financial solvency. Business debt in a bankruptcy can negatively affect a business and the Board may limit or revoke licenses in order to provide public protection. Ironically, the contractor involved in filing may believe a bankruptcy will resolve financial issues and can be blind-sided by financial review and investigations by the Board. The Board’s review can result in substantive changes in the license monetary limits or bonding or, even possibly, in a revocation of the very license required to continue conducting business. The same applies if a contractor fails to report a bankruptcy or disclose as required by NRS 624.263. A contractor’s personal bankruptcy may play a role in the company’s license even if the contractor personally indemnifies that license.
Contractors are sometimes apprehensive to discuss financial issues proactively with the Board, and, understandably, do not want to inspire scrutiny of their financial stability during a difficult period for the business. However, it is important for contractors to strategize up front regarding bankruptcy in order to determine the most effective course of action, including payment of claims, preservation of specific assets, bond claim payments, and overall public responsibility to complete projects and pay claimants.
Of course, there is not a simple answer that applies to every contractor since projects and payables can be vastly different and other circumstances can apply as well. Partner theft, divorce, health care, and other contributions can play a large role in the financial woes that lead to bankruptcy. Therefore, it is advisable to consult with an attorney who is willing to work to preserve a contractor’s licensing status and reputation in relation to the bankruptcy or to undertake other measures to preserve the contractor’s license and business. Advanced planning and sharing of information with the Board through counsel can prevent an unnecessary revocation and preserve a contractor’s ability to move forward. A licensee is not permitted to drive the business into bankruptcy and just “start over” with a clean slate. At this time, there is no “7 year” clean slate rule for licensees, and a party may never be permitted to obtain a license again if they fail to properly comply with statutory requirements.
Contractors should never make assumptions when it comes to a license. It is important to ask questions and get solid answers regarding bankruptcy issues.
How a bankruptcy is handled: put the best foot forward
If a bankruptcy occurs, the Board will require factual information from contractors regarding the following:
- Who filed the bankruptcy?
- Why did the bankruptcy occur?
- What steps did the licensee take to avoid bankruptcy and pay parties owed?
- What is the licensee’s current financial picture, including disclosure of financial statements and personal
The Board considers these factors and other information when determining whether a licensee should be permitted
to continue doing business in Nevada. The Board will typically review the bankruptcy schedules carefully, inquire as to specific debt, and investigate the financial information provided, especially inconsistencies in testimony. Therefore, it is important for contractors to insist on clean schedules in a bankruptcy rather than lumping costs and not carefully reviewing the information. The Board’s analysis is based upon the financial picture the schedules provide. Importantly, attorneys should never include “phantom debt” or duplicate claims because this will harm accounting projections and the Board’s outlook on a licensee’s status.
Other failures to disclose information timely and properly appear deceitful and cannot be easily unwound in a Board hearing if they are part of the bankruptcy records. The Board’s process, which is completely separate from the bankruptcy court proceedings, can be delayed and time consuming. Therefore, planning is essential for a smooth transition if a contractor must file bankruptcy.
Other issues related to bankruptcy: purchase of assets in a bankruptcy sale
New purchasers of a prior contractor’s assets in Nevada should be wary of buying items, such as names, phone numbers, and other specifically identifiable commodities at auctions and other sales. Generally, the Board will not permit use of these items by a new licensee and for good reason. Use of a prior contractor’s information creates confusion to the public and the Board with regard to new consumer complaints, contracts, and other issues. The public must know who they are dealing with when they enter a contract for new work.
When considering the purchase of such items, a new owner should consult with the Board or a competent attorney to determine viability. Just because a purchaser pays for an item does not mean it will be usable. This mistake has resulted in large costs to many new businesses who failed to plan ahead.
In sum, the reorganization or the winding down of a contractor requires significant care and experience with a goal of first avoiding licensing issues to preserve future business. Again, this is why it is important for contractors or their counsel to consult with an attorney familiar with bankruptcy implications to licensing to assist in either reorganizing or winding down the business fairly and effectively.
Shemilly Briscoe is a Managing Partner at the firm Briscoe Law Group. She provides guidance to contractors with all administrative licensing and disciplinary issues involving the Nevada State Contractors Board, as well as commercial and construction-related litigation and prosecuting and defending mechanic’s liens.
This article was originally published in the Communiqué, the official publication of the Clark County Bar Association (March 2015).
June 2014 Nevada Business Magazine Lists Shemilly Briscoe, Esq. on “Top Southern Nevada Attorneys” List
Thank you to Nevada Business Magazine for recognizing Shemilly A. Briscoe, Esq. as a “Top Southern Nevada Attorney” in the June 2014 issue of the magazine. You can view the full issue here and the full list here.