Nevada Construction Contracts Guide & FAQs

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Nevada Construction Contracts

Nevada Construction Contracts Guide

Nevada Construction Contracts Overview


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NoLienClausesCan't
Lien Rights Can't Be Waived by Contract

Nevada statutes specifically prohibit the ability to waive lien rights by contract.


PayIfPaidEnforceable
Pay-if-Paid Enforceable

Pay-if-paid clauses are enforceable in Nevada, but only under very limited circumstances.


PayWhenPaidisValid
Pay-When-Paid Enforceable

Pay-when-paid clauses haven't specifically been dealt with by Nevada courts, but are presumably enforceable to set a reasonable time for payment.


Payment Timing May Be Modified
Payment Timing May Be Modified By Contract

The payment deadlines under Nevada's prompt pay laws act as the default, the terms of the contract will govern the payment terms.


Retainage May Cannot Be Modified by Contract
Retainage May Not Be Modified

Retainage in Nevada is capped at not more than 5%, and cannot be modified by contract.

A construction contract outlines each party’s obligations, rights, and remedies on a project. But although the language in specific contract clauses is typically negotiable, Nevada has certain rules that govern what the agreement must include — and what is prohibited.

Keep in mind that, while Nevada’s rules for construction contract terms are written into state law, the courts determine how strictly those laws should be interpreted — and those interpretations can change.

On this page, you’ll find resources, legal information, and answers to frequently asked questions about Nevada’s construction contract and payment terms requirements.

Nevada construction contract provisions

While Nevada generally allows construction parties to set the terms of their agreement, there are some laws that regulate specific types of contract provisions. Any contract clause that contradicts the law is invalid and unenforceable.

“No lien” clauses

Nevada’s mechanics lien laws specifically prohibit the use of these so-called “no-lien clauses.” In Nevada, any provision in a contract that requires a claimant to waive or limit their lien rights is contrary to public policy, and therefore void and unenforceable.

Contingent payment clauses
There are two types of contingent payment clauses: pay-if-paid and pay-when-paid.

Pay-if-paid clauses in Nevada have an interesting history. Initially, the court declared that they are void and unenforceable. However, as the prompt payment laws developed, recent case law has declared that they aren’t per se unenforceable. Rather, such provisions are enforceable under limited circumstances and must be evaluated on a case-by-case basis to determine if they violate prompt payment or mechanics lien rights of the subcontractor.

The enforceability of pay-when-paid clauses has yet to be evaluated by the Nevada court. But given the enforceability of pay-if-paid clauses, clauses that set a reasonable time for payment will generally be found to be valid.

Payment timing clauses

The timing of payments under Nevada’s prompt pay laws for private projects acts as the default pay schedule if the contract or subcontract is silent regarding the timing for payments. On public works projects, the timing of payments to prime contractors may agree to a shorter period of time, but may not exceed the 30 days required under the public prompt payment provisions. All other payments on Nevada public works projects must be made within 10 days of the higher-tiered party’s receipt of payment; which cannot be modified by the contract.

Retainage limits

Retainage withheld on Nevada private and public projects cannot exceed 5% of each progress payment. This cannot be increased by any contract term. On public projects, there is an option for the reduction or elimination of progress payments upon 50% completion. But this is conditioned on the public entity’s declaration that satisfactory progress is being made, not according to a provision contained within the contract.

Nevada construction contract requirements

Nevada is relatively lenient when it comes to what is required in a construction contract. However, when it comes to single-family residential projects, there are quite a few required disclosures and provisions depending on the type of work to be performed.

Other types of construction contract requirements

Every prime contract for the repair or improvement of single-family residential property must include the contractor’s license number, a list of all subcontractors and supplier providing over $500 of labor/materials to the project and their license numbers, and some required disclosures; such as a lien rights notice, NV contractor licensing information, and a Residential Construction Recovery Fund Notice.

Lastly, contracts for the construction, installation, or repair of pools or spas on residential properties have a slew of additional required provisions, such as payment schedules and amounts, initial deposit/downpayment limitations, and more.

Construction Contracts FAQs in Nevada

Construction contracts and payment terms are highly regulated in Nevada. It can be confusing to figure out when payments must be made, how to make them, and how to best protect your company from expensive problems. Here are some frequently asked questions that come up with construction contracts and payment terms on Nevada jobs

Nevada Construction Contracts FAQs

Can you waive lien rights by contract in Nevada?

No, “no-lien clauses” are void and unenforceable in Nevada. This is expressly prohibited under NRS §108.2453(2), which states:

A condition, stipulation or provision in a contract or other agreement for the improvement of property or for the construction, alteration or repair of a work of improvement in this State that attempts to do any of the following is contrary to public policy and is void and unenforceable: (a) Require a lien claimant to waive rights provided by law to lien claimants or to limit the rights provided to lien claimants, other than as expressly provided in NRS 108.221 to 108.246, inclusive

How does Nevada treat pay-if-paid and pay-when-paid clauses?

Pay-if-Paid Clauses

Yes, pay-if-paid clauses are enforceable under Nevada law, but only in extremely limited circumstances. However, what constitutes such “limited circumstances” is still a topic of debate. In 2008, the Nevada Supreme Court held that pay-if-paid provisions were unenforceable as a matter of public policy favoring the right to a mechanics lien.

But, in 2020, the courts switched gears a bit. In APCO v. Zitting Bros., the court held that pay-if-paid clauses weren’t per se unenforceable. Rather, the court should determine the enforceability on a case-by-case basis to assess whether the clause is permissible under the Nevada Prompt Pay Acts.

Pay-when-Paid Clauses

Nevada courts have yet to deal directly with the issue of the validity of pay-when-paid clauses. Given that a pay-if-paid clause may be enforceable under limited circumstances, they likely are enforceable as setting a reasonable time for payment.

Are no-damages-for-delays clauses enforceable in Nevada?

Yes, no-damages-for-delay clauses are enforceable in Nevada. However, there are certain exceptions that will defeat a defense based on a no-damages-for-delay provision. These exceptions, outlined in JA Jones Constr. Co. v. Lehrer McGovern Bovis, Inc., include:

• Delays so unreasonable in length as to amount to project abandonment;

• Delays caused by the other party’s fraud, misrepresentation, concealment, or other bad faith; &

• Delays caused by the other party’s active interference.

Can you contract around Nevada’s prompt payment terms?

Private Projects

Yes, under Nevada’s prompt payment laws for private projects all progress payment timings may be modified to some extent by the terms of the contract. Payments to prime contractors must be made according to the terms of the contract, if the contract is silent regarding a payment schedule, then the prompt payment laws kick in.

As far as all other down chain payments, they must be made according to the payment schedule in the contract, or within 10 days of receipt of payment by the hiring party; whichever is earlier. However, if the contract is silent, then the prompt pay provisions apply.

Public Projects

Under Nevada’s public prompt payment laws, payments to the prime contractor may be modified by the contract, but only to shorten the time for payment. The time for payment cannot be extended beyond the 30 days from billing under the Nevada public prompt payment laws. All other payments on the project must be made within 10 days after the higher-tiered party received payment.

Can you contract around Nevada's retainage requirements?

No, the amount of retainage in Nevada that can be withheld on both private and public construction projects is firmly capped at 5% of each progress payment.

Granted, on public projects, retainage can be reduced or eliminated from remaining payments upon reaching the 50% completion point, but this is available only upon the public entity’s determination that satisfactory progress is being made.

Does Nevada have any specific requirements for construction contracts?

Generally speaking, construction contracts in Nevada do not have any specifically required information that must be included. However, when it comes to contracts involving single-family, residential property; the prime contractor must include or otherwise provide certain information and disclosures.

Such contracts must include the contractor’s license number, a disclosure informing the owner of Nevada lien rights, a disclosure informing the owner of the licensing requirements of the Nevada  State Contractors Licensing Board, and one notice regarding the Nevada Residential Recovery Fund. Additionally, the GC must also provide a list of the names and license numbers of any subs or suppliers that will provide $500 or more worth of labor and/or materials to the projects; and a statement that if unpaid, they have the right to file a lien against the property.

In addition to these requirements, if the contract is for the installation or repair of a pool or spa on a single-family residential property, there is a long list of required information that must be included found under NRS §624.940.

How long do I have to bring a breach of contract claim for nonpayment in Nevada?

The statute of limitations (deadline) to file a breach of contract claim for nonpayment in Nevada varies depending on whether the contract was written/express or oral/implied.

Breach of written contract claims must be brought within 6 years from the date of the breach (NRS §11.190(1)(b)). While claims for breach of an oral contract must be brought within 4 years from the date of the breach (NRS §11.90(2)(c)).

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How to file a lien in Nevada

Need to file a Nevada mechanics lien? File your mechanics lien with Levelset, the lien experts quickly and easily. Or you can follow the 3 steps below to file a lien yourself with Levelset's free information.
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