NRS 624 – Maybe Boring BUT Necessary

Subcontractors — Key Nevada Revised Statutes You Should Know

If you’re like me, reading laws, like NRS 624 dot Whatever! requires a practice that I am not used to. I’ll be honest, I find myself asking, “what did the writer of this section mean buy this clause?” And, “what did I just read? That can’t be right!”. I understand that you are busy… busy scheduling your signed subcontracts, meeting with prospective general contractors to prepare estimates, and managing your crews. but a review of the sections of Nevada Contractors laws is a good idea. These establish your rights when operating as a “lower-tiered” subcontractor. The primary contractor is responsible for the completion of the whole project and you agreed to perform your specialty to high standards of workmanship, have all of the necessary insurances, and to work well with other. Not a small order on a busy construction site. And let’s not forget the safety requirements from OSHA that the GC puts on your plate. So to help you juggle the daily grind of running a business in the construction industry, let’s do a quick review of NRS and NAC specifically addressing subcontractors.

What’s the Difference Between Statutes and Administrative Codes?

Basically, Statutes are laws passed by the Nevada Legislature and signed into law by the governor. So a Bill gets written and submitted to the legislative bodies and if it passes legislative votes, and gets signed by the governor, it becomes the law of the state. They establish broad legal frameworks, rights, responsibilities, and penalties. Administrative Codes on the other hand, are rules and regulations created by state agencies to carry out and enforce the state statutes. They have the Force of Law but are subordinate to the statutes.

Important Subsections of NRS 624 To Know

Nevada Revised Statutes Chapter 624

• NRS 624.610 — Establishes the rights of lower-tiered subcontractors to stop work or terminate agreements if the prime contractor stops work due to non-payment or other valid reasons. It also outlines remedies including recovery of costs, profits, and attorney’s fees.
• NRS 624.3012 – Prohibits contractors from falsely denying amounts due to subcontractors and mandates release of liens when payment is made.
• NRS 624.3013 – Addresses failure to maintain records or bonds, misrepresentation, and financial irresponsibility.
• NRS 624.3015 – Prohibits contracting with unlicensed subcontractors and acting beyond the scope of a license.

Important Subsections of NAC 624 to Know

Nevada Administrative Code Chapter 624

Licensing and Scope of Work

• NAC 624.640 – A bid or contract is void if a licensee exceeds the scope of their license or monetary limit. This applies to subcontractors and lower-tier subcontractors who must operate within their licensed classification.
• NAC 624.650 – Prohibits association with unlicensed persons, meaning a subcontractor cannot legally hire a lower-tier subcontractor who is not properly licensed.

Disciplinary Actions

• NAC 624.72512–624.72518 – These sections outline corrective actions and joint responsibility between a licensee and any subcontractor they hire. If a lower-tier subcontractor fails to perform, the hiring subcontractor (and potentially the general contractor) may be held jointly responsible.
• NAC 624.3012 (via NRS) – Addresses false denial of amounts due to subcontractors and failure to release liens, which protects lower-tier subcontractors from payment abuse.

Residential Contracts

• NAC 624.693–624.6968 – These sections apply to residential improvement contracts, including mandatory disclosures and payment schedules. Lower-tier subcontractors working on residential projects may be indirectly affected by these rules, especially regarding lien rights and consumer protections.
• Residential Recovery Fund: Applies to residential contracts and may offer protection to homeowners, but indirectly affects subcontractors by enforcing stricter compliance on prime contractors.

Bonding and Financial Responsibilities

• NAC 624.268–624.275 – These sections require contractors and subcontractors to demonstrate financial responsibility, which can affect lower-tier subs if their hiring subcontractor is found financially irresponsible.
• Mechanics’ and Materialmen’s Liens: NAC 624 references informational forms and procedures related to lien rights, which are crucial for lower-tier subcontractors seeking payment remedies.

If you remember when you took the CMS – Construction Management Survey – portion of the Nevada Contractor’s examination, it covered business and law. Click here for the online version to The State of Nevada State Contractors Board Handbook 2024 containing Chapter 624 of the Nevada Revised Statutes and Chapter 624 of the Nevada Administrative Code. When you review the Handbook, I recommend getting sticky-tabs to mark important sections for your trade and business. I do not have a memory that retains the way laws are written. I don’t have a legal mind. So always consult a licensed attorney to finalize your standard subcontracts to ensure that you are covering all of your bases. Finding a law firm that will be a good fit is the biggest problem many small business owners face. I will write a post about the Residential Recovery Fund next time. Don’t forget to check out other helpful posts on our blog page. How about this one with tips to survive rising costs.?