2001 REGULAR SESSION (71st) A SB216 R1 993
ASSEMBLY ACTION Initial and Date |SENATE ACTION Initial and Date
Adopted Lost | Adopted Lost
Concurred In Not |Concurred In Not
Receded Not | Receded Not
Amend the bill as a whole by deleting sec. 3 and renumbering sec. 4 as sec. 3.
Amend sec. 4, page 2, by deleting lines 21 through 24 and inserting:
“Sec. 3. 1. If a contractor who engages in the repair, restoration, improvement or construction of a residential pool or spa is determined by the board to have violated:
(a) One or more of the provisions of NRS 597.716, 597.719 or 624.301 to 624.305, inclusive; or
(b) Any regulation adopted by the board with respect to contracts for the repair, restoration, improvement or construction of a residential pool or spa,
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the board may require that
the contractor obtain the services of a construction control for each contract
that the contractor enters into for the repair, restoration, improvement or
construction of a residential pool or spa.”.
Amend the bill as a whole by adding new sections designated sections 4 and 4.5, following sec. 4, to read as follows:
“Sec. 4. 1. Any contractor or subcontractor who performs work for the repair, restoration, improvement or construction of a residential pool or spa shall, regardless of whether the work is performed under the direction of a builder who is also the owner of the property being improved:
(a) Apply for and obtain all applicable permits for the project; and
(b) Meet all applicable requirements imposed pursuant to this chapter, chapter 624 of NRS or any regulations adopted by the board with respect to contracts for the repair, restoration, improvement or construction of a residential pool or spa.
2. If a contractor or subcontractor performs work for the repair, restoration, improvement or construction of a residential pool or spa and the work is performed under the direction of a builder who is also the owner of the property being improved, the owner shall comply with all state and local laws and ordinances for the submission of names, licenses and information concerning any required bonds and insurance with respect to the contractors and subcontractors working on the project.
3. With respect to a contract for the repair, restoration, improvement or construction of a residential pool or spa, regardless of use, the work performed pursuant to such a contract must be supervised and controlled directly by the qualified employee or officer of the contract.
Sec. 4.5. A contractor who engages in the repair, restoration, improvement or construction of a residential pool or spa shall not:
1. Act as, or carry out the duties of, an officer, director, employee or owner of; or
2. Receive remuneration or any other thing of value for the loan, either directly or indirectly, from,
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a bonding company, finance
company, or any other corporation or business entity who cosigns, underwrites,
obtains a deed of trust for, issues, sells, purchases or acquires a loan to
finance the repair, restoration, improvement or construction of a residential
pool or spa.”.
Amend the bill as a whole by deleting sec. 5 and adding a new section designated sec. 5, following sec. 4, to read as follows:
“Sec. 5. 1. If the repair, restoration, improvement or construction of a residential pool or spa is to be financed by the owner, before the contractor performs any work for the repair, restoration, improvement or construction of the residential pool or spa, the owner must:
(a) Find a third-party to agree to make the loan or give financing.
(b) Agree to accept the loan or financing of the third-party.
(c) Not rescind the loan or financing transaction within the period prescribed for rescission pursuant to the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq., or chapter 598 of NRS, if applicable.
2. A contract for the repair, restoration, improvement or construction of a residential pool or spa, regardless of use, is not enforceable against the owner if:
(a) Obtaining a loan for all or a portion of the contract price is a condition precedent to the contract.
(b) The contractor provides financing for all or a portion of the contract price.
3. An affiliate or associate of a contractor may not issue, purchase or acquire a loan to finance the repair, restoration, improvement or construction of a residential pool or spa, regardless of use.
4. A contractor shall not represent in any manner that the contract is enforceable or that the owner has any obligation under the contract if the requirements of this section are not satisfied.
5. As used in this section:
(a) “Affiliate” means a person that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with, a specified person.
(b) “Associate,” when used to indicate a relationship with any person, means:
(1) Any corporation or organization of which that person is an officer or partner or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of voting shares;
(2) Any trust or other estate in which that person has a substantial beneficial interest or for which he serves as trustee or in a similar fiduciary capacity; or
(3) Any relative or spouse of that person, or any relative of the spouse.
(c) “Third-party” means a bonding company, finance company, or any other corporation or business entity who cosigns, underwrites, obtains a deed of trust for, issues, sells, purchases or acquires a loan to finance the repair, restoration, improvement or construction of a residential pool or spa.”.
Amend sec. 6, page 3, line 32, by deleting “act” and inserting:
“act, or any regulations adopted with respect to contracts for the repair, restoration, improvement or construction of a residential pool or spa”.
Amend sec. 6, page 3, line 35, by deleting “519.719” and inserting “597.719”.
Amend sec. 9, pages 4 and 5, by deleting lines 41 through 48 on page 4 and lines 1 and 2 on page 5, and inserting:
“597.719 1. [A] The board shall adopt by regulation mandatory elements to be included in all contracts to be used by contractors for the repair, restoration, improvement or construction of a residential pool or spa. Such mandatory elements must not be waived or limited by contract or in any other manner. On and after October 1, 2001, any contract entered into between a contractor and the owner of a single-family residence for the repair, restoration, improvement or construction of a residential pool or spa must comply with the standard elements adopted by the board. A contract that does not comply with the standard elements adopted by the board is void and unenforceable against the owner.”.
Amend sec. 9, page 5, line 8, by deleting “number;” and inserting:
“number . [;]”.
Amend sec. 9, page 5, line 10, by deleting “property;” and inserting”
“property . [;]”.
Amend sec. 9, page 5, lines 11, 13 and 14, by deleting “contract;” and inserting:
“contract . [;]”.
Amend sec. 9, page 5, line 16, by deleting “taxes;” and inserting:
“taxes . [;]”.
Amend sec. 9, page 5, by deleting lines 17 and 18 and inserting:
“(g) The amount , not to exceed $1,000 or 10 percent of the aggregate contract price, whichever is less, of any [advance] deposit paid or promised to be paid to the contractor by the owner [;] before the start of construction.”.
Amend sec. 9, page 5, line 20, by deleting “624.600;” and inserting:
“624.600 . [;]”.
Amend sec. 9, page 5, by deleting line 25 and inserting:
“incorporated into the original contract as a change order . [;] A change order is not enforceable against the owner contracting for the repair, restoration, improvement or construction of a residential pool or spa unless the change order clearly sets forth the scope of work to be completed and the price to be charged for the changes and is signed by the owner.”.
Amend sec. 9, page 5, line 30, by deleting “work; and” and inserting:
“work . [; and]”.
Amend sec. 9, page 5, line 31, by deleting “amount” and inserting:
“amount , shown in numeral form,”.
Amend sec. 9, page 5, line 33, after “contract.” by inserting:
“Unless the contractor has furnished a bond for payment and performance covering full performance and completion of the contract and the cost of the bond is included in the price of the project the payment schedule must not provide for the contractor to receive, nor may the contractor actually receive, payments in excess of 100 percent of the value of the work performed on the project at any time, excluding finance charges, except as authorized by subsection 1 of NRS 597.716 or the regulations adopted by the board. With respect to a contract executed before October 1, 2001, if any payment schedule set forth in the contract does not comply with the provisions of this chapter or chapter 624 of NRS or any regulations adopted pursuant thereto:
(1) The obligation of the owner to make payments in accordance with the payment schedule shall be deemed void and unenforceable; and
(2) The lender, if any, may not initiate proceedings to enforce the payment of any applicable loan unless and until the contract is reformed or otherwise amended to comply with those provisions of law.
(l) If the contract provides for payment of a commission to a salesperson out of the contract price, a statement that the payment must be made on a pro rata basis in proportion to the schedule of payments made to the contractor by the disbursing party in accordance with the provisions of paragraph (k).”.
Amend the bill as a whole by deleting sections 10 through 12 and adding new sections designated sections 10 through 12, following sec. 9, to read as follows:
“Sec. 10. Chapter 624 of NRS is hereby amended by adding thereto the provisions set forth as sections 11 and 12 of this act.
Sec. 11. 1. The board shall designate an employee as ombudsman for residential pools and spas.
2. The ombudsman for residential pools and spas shall:
(a) Assist owners of single-family residences, contractors and financial institutions to understand their rights and responsibilities as set forth in NRS 597.713, 597.716 and 597.719 and sections 2 to 6, inclusive, of this act, and any regulations adopted pursuant thereto.
(b) Notify the board if it appears that any person has engaged in any act or practice that constitutes a violation of any of the provisions of this chapter or NRS 597.713, 597.716 or 597.719 or sections 2 to 6, inclusive, of this act, or any regulations adopted pursuant thereto.
Sec. 12. 1. Before granting an original contractor’s license to, or renewing the contractor’s license of, an applicant who engages or will engage in the repair, restoration, improvement or construction of residential pools or spas, the board may, in addition to any other conditions for the issuance or renewal of a license, require the applicant to file with the board a bond for the protection of consumers in an amount fixed by the board.
2. A bond required pursuant to subsection 1 is in addition to, may not be combined with and does not replace any other bond required pursuant to the provisions of this chapter. A contractor required to file a bond pursuant to subsection 1 shall maintain the bond for 2 years or for such longer period as the board may require.
3. A bond required pursuant to subsection 1 must be provided by a person whose long-term debt obligations are rated “A” or better by a nationally recognized rating agency.”.
Amend sec. 13, page 8, line 14, by deleting “$100,000.” and inserting “[$100,000.]$500,000.”.
Amend sec. 13, page 8, line 17, after “force.” by inserting:
“A bond required by this section must be provided by a person whose long-term debt obligations are rated “A” or better by a nationally recognized rating agency.”.
Amend sec. 13, pages 8 and 9, by deleting lines 46 through 49 on page 8 and lines 1 through 10 on page 9, and inserting:
“7. If a contractor who engages in the repair, restoration, improvement or construction of a residential pool or spa:
(a) Becomes licensed pursuant to chapter 624 of NRS on or after July 1, 2001;
(b) Is determined by the board to have violated one or more of the provisions of NRS 624.301 to 624.305, inclusive;
(c) Enters into a contract on or after July 1, 2001, that is later found to be void and unenforceable against the owner pursuant to subsection 5 of NRS 597.719 or pursuant to any regulation adopted by the board with respect to contracts for the repair, restoration, improvement or construction of a residential pool or spa; or
(d) Has five valid complaints filed against him with the board within any 15-day period,
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the contractor shall
comply with the provisions of subsection 8.
8. A contractor described in subsection 7 shall, before commencing work for the repair, restoration, improvement or construction of a residential pool or spa, furnish to the building department of the city or county, as applicable, in which the work will be carried out:
(a) A performance bond in an amount equal to not less than 50 percent of the amount of the contract, conditioned upon the faithful performance of the contract in accordance with the plans, specifications and conditions set forth in the contract. The performance bond must be solely for the protection of the owner of the property to be improved.
(b) A payment bond in an amount equal to not less than 50 percent of the amount of the contract. The payment bond must be solely for the protection of persons supplying labor or materials to the contractor, or to any of his subcontractors, in carrying out the provisions of the contract.
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A bond required pursuant
to this subsection must be provided by a person whose long-term debt
obligations are rated “A” or better by a nationally recognized rating agency.
The contractor shall maintain the bond or cash deposit for the period required
by the board.
9. As used in this section, “substantiated claims for wages” has the”.
Amend the bill as a whole by adding new sections designated sections 13.3 and 13.7, following sec. 13, to read as follows:
“Sec. 13.3. NRS 624.490 is hereby amended to read as follows:
624.490 Within 2 years after an injured person has obtained a judgment in any court of competent jurisdiction for recovery of damages against a residential contractor for an act or omission of the residential contractor that is in violation of this chapter , chapter 597 of NRS or the regulations adopted pursuant thereto, the injured person may apply to the board for satisfaction of the judgment from the account if:
1. The proceedings in connection with the judgment have terminated, including appeals;
2. He submits an application on a form established for this purpose by the board;
3. He submits proof satisfactory to the board of the judgment; and
4. Upon obtaining payment from the account, he assigns his rights to enforce the judgment to the board.
Sec. 13.7. NRS 624.510 is hereby amended to read as follows:
624.510 1. Except as otherwise provided in NRS 624.490 and subsection 2, an injured person is eligible for recovery from the account if the board or its designee finds that the injured person suffered actual damages as a result of an act or omission of a residential contractor that is in violation of this chapter , chapter 597 of NRS or the regulations adopted pursuant thereto.
2. An injured person is not eligible for recovery from the account if:
(a) The injured person is the spouse of the licensee, or a personal representative of the spouse of the licensee;
(b) The injured person was associated in a business relationship with the licensee other than the contract at issue; or
(c) At the time of contracting with the residential contractor, the license of the residential contractor was suspended or revoked pursuant to NRS 624.300.
3. If the board or its designee determines that an injured person is eligible for recovery from the account pursuant to this section or NRS 624.490, the board or its designee may pay out of the account:
(a) The amount of actual damages suffered, but not to exceed $30,000; or
(b) If a judgment was obtained as set forth in NRS 624.490, the amount of actual damages included in the judgment and remaining unpaid, but not to exceed $30,000.
4. The decision of the board or its designee regarding eligibility for recovery and all related issues is final and not subject to judicial review.
5. If the injured person has recovered a portion of his loss from sources other than the account, the board shall deduct the amount recovered from the other sources from the amount payable upon the claim and direct the difference to be paid from the account.
6. To the extent of payments made from the account, the board is subrogated to the rights of the injured person, including, without limitation, the right to collect from a surety bond or a cash bond. The board and the attorney general shall promptly enforce all subrogation claims.
7. The amount of recovery from the account based upon claims made against any single contractor must not exceed $200,000.
8. As used in this section, “actual damages” includes attorney’s fees or costs in contested cases appealed to the supreme court of this state. The term does not include any other attorney’s fees or costs.”.
Amend sec. 15, page 10, line 10, by deleting “4” and inserting “3”.
Amend the bill as a whole by renumbering sections 16 and 17 as sections 18 and 19 and adding new sections designated sections 16 and 17, following sec. 15, to read as follows:
“Sec. 16. Section 20.5 of chapter 423, Statutes of Nevada 1999, at page 1972, is hereby amended by adding thereto a new section to read as follows:
Sec. 20.5. 1. The provisions of section 10 of this act apply to qualified services completed on or after July 1, 1998.
2. The provisions of section 11 of this act apply to judgments entered on or after July 1, 2000.
Sec. 17. Section 21 of chapter 423, Statutes of Nevada 1999, at page 1972, is hereby amended to read as follows:
Sec. 21. 1. This section and sections 1 and 9 of this act become effective on October 1, 1999.
2. Sections 2 to 8, inclusive, and 10 to [20,] 20.5, inclusive, of this act become effective on July 1, 2001.”.
Amend sec. 17, page 10, by deleting lines 18 through 21 and inserting:
“3. Sections 3 to 8, inclusive, 10 to 13, inclusive, and 14, 15 and 18 of this act become effective on July 1, 2001.
4. Sections 13.3, 13.7, 16 and 17 of this act become effective at 12:01 a.m. on July 1, 2001.”.
Amend the title of the bill to read as follows:
“AN ACT relating to contractors; providing for the adoption of standards for advertisements used by contractors who repair, restore, improve or construct residential pools and spas; enacting and revising various provisions pertaining to such contractors; requiring the state contractors’ board to adopt standard contract elements for use by such contractors; providing for the designation of an ombudsman for residential pools and spas; revising the provisions governing eligibility for compensation from the recovery fund; providing a penalty; and providing other matters properly relating thereto.”.
Amend the summary of the bill to read as follows: