Financial responsibility of applicant or licensee: Standards and criteria for determination.
1. The financial responsibility of a licensee or an applicant for a contractor’s license must be established independently of and without reliance on any assets or guarantees of any owners or managing officers of the licensee or applicant, but the financial responsibility of any owners or managing officers of the licensee or applicant may be inquired into and considered as a criterion in determining the financial responsibility of the licensee or applicant.
2. The financial responsibility of an applicant for a contractor’s license or of a licensed contractor must be determined by using the following standards and criteria in connection with each applicant or contractor and each associate or partner thereof:
(a) Net worth.
(b) Amount of liquid assets.
(c) Prior payment and credit records.
(d) Previous business experience.
(e) Prior and pending lawsuits.
(f) Prior and pending liens.
(g) Adverse judgments.
(h) Conviction of a felony or crime involving moral turpitude.
(i) Prior suspension or revocation of a contractor’s license in Nevada or elsewhere.
(j) An adjudication of bankruptcy or any other proceeding under the federal bankruptcy laws, including:
(1) A composition, arrangement or reorganization proceeding;
(2) The appointment of a receiver of the property of the applicant or contractor or any officer, director, associate or partner thereof under the laws of this State or the United States; or
(3) The making of an assignment for the benefit of creditors.
(k) Form of business organization, corporate or otherwise.
(l) Information obtained from confidential financial references and credit reports.
(m) Reputation for honesty and integrity of the applicant or contractor or any officer, director, associate or partner thereof.
3. A licensed contractor shall, as soon as it is reasonably practicable, notify the Board in writing upon the filing of a petition or application relating to the contractor that initiates any proceeding, appointment or assignment set forth in paragraph (j) of subsection 2. The written notice must be accompanied by:
(a) A copy of the petition or application filed with the court; and
(b) A copy of any order of the court which is relevant to the financial responsibility of the contractor, including any order appointing a trustee, receiver or assignee.
4. Before issuing a license to an applicant who will engage in residential construction or renewing the license of a contractor who engages in residential construction, the Board may require the applicant or licensee to establish his financial responsibility by submitting to the Board:
(a) A financial statement prepared by a certified public accountant; and
(b) A statement setting forth the number of building permits issued to and construction projects completed by the licensee during the immediately preceding year and any other information required by the Board. The statement submitted pursuant to this paragraph must be provided on a form approved by the Board.
5. In addition to the requirements set forth in subsection 4, the Board may require a licensee to establish his financial responsibility at any time.
6. An applicant for an initial contractor’s license or a licensee applying for the renewal of a contractor’s license has the burden of demonstrating his financial responsibility to the Board, if the Board requests him to do so.
Last modified: February 27, 2006