Duty of construction control to deposit surety bond with State Contractors’ Board; form and amount of bond; exceptions.
1. The provisions of this section do not apply to:
(a) Savings and loan associations, state banks and national banking associations licensed to do business in the State of Nevada, under the laws of the State of Nevada or under the laws of the United States.
(b) Title insurers or underwritten title insurance companies authorized to do business in the State of Nevada.
(c) Lenders of construction loan money for dwelling units who are approved by the Federal Housing Administration or Department of Veterans Affairs and who have been licensed and authorized to do business in the State of Nevada.
2. Except as otherwise provided in subsection 1 and NRS 627.183, as a condition to doing business in this state, each construction control shall deposit with the State Contractors’ Board and keep in full force and effect a surety bond, in the amount set forth in subsection 4, which is executed by some corporation authorized to issue surety bonds in this state.
3. The surety bond must be in substantially the following form:
Bond No.
Know All Men by These Presents:
That I, ................................, having a principal place of business in ...................................................., Nevada, as principal, and ................................, a corporation licensed to execute surety bonds under the provisions of the Nevada Insurance Code, as surety, are held and firmly bound to the State of Nevada, for the use of any person by whom funds are entrusted to the principal or to whom funds are payable by the principal, in the sum of ................ Dollars, lawful money of the United States of America, to be paid to the State of Nevada, for which payment well and truly to be made we bind ourselves, our heirs, executors and successors, jointly and severally, firmly by these presents:
The Condition of the Above Obligation Is Such That:
Whereas, Under the Construction Control Law, certain duties, obligations and requirements are imposed upon all persons, copartnerships, associations or corporations acting as construction controls;
Now, Therefore, If the principal and its agents and employees shall faithfully and in all respects conduct business as a construction control in accordance with the provisions of the Construction Control Law, this obligation shall be void, otherwise to remain in full force and effect;
Provided, However, That the surety or sureties may cancel this bond and be relieved of further liability hereunder by delivering 30 days’ written notice of cancellation to the principal; however, such cancellation shall not affect any liability incurred or accrued hereunder prior to the termination of such 30-day period;
Provided Further, That the total aggregate liability of the surety or sureties herein for all claims which may arise under this bond shall be limited to the payment of ................ Dollars.
In Witness Whereof, The principal and surety have hereunto set their hands this ..................... day of the month ................ of the year........... .
.......................................................
By.......................................................
Principal
(Surety)
By.......................................................
Attorney
4. Each construction control shall initially deposit a surety bond that complies with the provisions of this section or a substitute form of security that complies with the provisions of NRS 627.183 in the amount of $20,000. Not later than 3 months after the initial deposit and annually thereafter, the construction control shall:
(a) Submit to the State Contractors’ Board a signed and notarized affidavit attesting to the average monthly balance in the trust account maintained by the construction control; and
(b) Deposit a surety bond that complies with the provisions of this section or a substitute form of security that complies with the provisions of NRS 627.183 in the following amount based upon the average monthly balance in the trust account maintained by the construction control:
AVERAGE MONTHLY BALANCE AMOUNT OF BOND OR
SECURITY REQUIRED
Less than $2,000,000......................................................................................... $20,000
$2,000,000 or more but less than $4,000,000.................................................... 40,000
$4,000,000 or more but less than $6,000,000.................................................... 60,000
$6,000,000 or more but less than $8,000,000.................................................... 80,000
$8,000,000 or more but less than $12,000,000................................................ 120,000
$12,000,000 or more but less than $20,000,000.............................................. 200,000
$20,000,000 or more........................................................................................... 250,000
Last modified: February 27, 2006