The license bond
Most licensed Nevada contractors must keep a surety bond or cash deposit on file with the State Contractors Board. The Board sets the amount, from $1,000 to $500,000, based on the license (NRS 624.270). The bond exists for the benefit of owners who are damaged by the contractor's failure to perform the contract, among others (NRS 624.273).
You do not need a Board decision first
An owner may bring an action on the bond directly in court. The bond company is also allowed to pay a valid written claim without waiting for a court action (NRS 624.273). A Board finding in your favor can help, but the statute does not require one.
Limits to understand
- Two year deadline. No action may be commenced on the bond more than two years after the act on which it is based. This is shorter than most other deadlines.
- The bond is a fixed amount. It covers all claims against that contractor, across all years. If claims exceed the bond, claimants other than employees share it proportionally.
- Some contractors have no bond. The Board may waive the bond requirement after five years of licensure.
- Pool and spa contractors must carry an additional consumer protection bond (NRS 624.276).
On request, the Board will tell you whether a bond is in effect, its amount, and whether other actions are pending against it.
The Residential Recovery Fund
The Recovery Fund is a state account, paid for by licensed residential contractors, that compensates homeowners harmed by a licensed contractor (NRS 624.400 to 624.560).
| Question | Rule |
|---|---|
| Who qualifies | A natural person who owns and occupies a single-family residence, including a condo or townhouse unit, and contracted with a licensed residential contractor. Subsequent owners can qualify. |
| Maximum award | Actual damages up to $40,000 per claim. |
| Cap per contractor | $750,000 or 20 percent of the fund balance, whichever is less, shared among all claimants against that contractor. |
| Deadline | A complaint to the Board within four years after completion of the work, or an application within two years after a court judgment. |
| Not eligible | Contractor was unlicensed; owner pulled the permit or acted as owner-builder; rental or investment property; work done with intent to sell or rent within a year. |
Awards are discretionary, are reduced by anything you recover elsewhere, and the Board's decision is final. Attorney fees are generally not covered. The fund is a backstop, not a first resort.
How we use these
We check the contractor's bond and license status at the start of every file, because the two year bond deadline can pass while an owner is still arguing with the contractor. Where a bond exists and the claim is well documented, a bond claim can be the most direct route to payment.
This page is general information about Nevada law, not legal advice. Every dispute turns on its own facts and documents.