Surety Bond Encyclopedia

Manufacturer Bond - Alabama Manufactured Housing Commission in Alabama

Brief Summary

The number most people quote for this bond is $25,000. That is the per facility rate, not what you post. Alabama sets a $100,000 floor, so a manufacturer with one to four licensed plants files a $100,000 bond. We write the exact amount your facility count requires on the Commission's own bond form, and you pay an annual premium instead of setting aside the full sum.

Manufacturers licensed by the Alabama Manufactured Housing Commission must post a surety bond of $25,000 per licensed facility or a minimum of $100,000 under Ala. Admin. Code 535-X-15-.03, plus $1,000,000 of general liability insurance. The manufacturer license fee is $550, and licenses run from January 1 through December 31 and renew every year.

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How to Apply for a Manufacturer Bond:

Count every facility you will license with the Commission and multiply by $25,000. If the total is under $100,000, the bond is $100,000.
Place $1,000,000 of general liability insurance.
Apply for the bond in the company's exact legal name as it will appear on the AMHC manufacturer license application.
Have the surety execute the AMHC License/Permit Bond form with the correct penal sum.
Send the Application for Manufacturer License with the bond and insurance details and the $550 license fee to the Commission.
Renew each year for the January 1 to December 31 license period.

Detailed Information About the Alabama Manufacturer Bond:

How the amount is calculated

Rule 535-X-15-.03 sets the manufacturer bond at $25,000 per licensed facility or a minimum of $100,000. In practice that means one to four licensed facilities post $100,000, and the figure only rises above $100,000 at the fifth facility, where five times $25,000 equals $125,000. The rule was adopted under Code of Alabama 1975, Section 24-6-4, and it allows the Commission to decrease or increase bond requirements after a periodic review of valid claims, so confirm the current amount at each renewal.

Who needs a manufacturer license

Any manufacturer selling manufactured (mobile) homes or manufactured buildings (modulars) to be shipped into or sited in Alabama must apply for a license every year. Alabama based manufacturers need the license even when their homes are headed out of state. The application cites Code of Alabama 1975, Sections 24-4A-3 and 24-6-4, and the applicant certifies that homes built under the license comply with the Federal Manufactured Home Construction and Safety Standards. Modular manufacturers are licensed under a separate modular program with its own $550 license fee in rule 535-X-19-.05.

What the bond guarantees

The Commission uses a single License/Permit Bond form, Rev. 12/14, for manufacturers, retailers and installers. It is written for consumer protection and conditioned on the manufacturer and all of its agents and employees faithfully and honestly performing their obligations under Alabama law and Commission rules. Claims can be made for acts or omissions under Code of Alabama Sections 24-4A-1, 24-5-1 and 24-6-1. The Commission validates claims and determines the responsible parties under rule 535-X-15-.04. The surety's liability is capped at the bond amount and does not accumulate from year to year. Cancellation requires 60 days notice to the Commission by certified mail, and claims may still be filed for up to 12 months after the bond ends.

Fees and license term

The manufacturer license fee is $550 under Ala. Admin. Code 535-X-19. Licenses are valid from January 1 until December 31 of the year issued and renew annually, so plan the bond around the calendar year. Violations can lead to suspension or revocation of the license to manufacture homes in Alabama and a fine of up to $1,000 for each violation under rule 535-X-15-.06.

Eligibility and Requirements for a Alabama Manufacturer Bond:

Bond of $25,000 per licensed facility, never less than $100,000, under Ala. Admin. Code 535-X-15-.03.
Alabama Manufactured Housing Commission named as obligee on its License/Permit Bond form (Rev. 12/14).
General liability insurance of $1,000,000.
Homes built under the license must comply with the Federal Manufactured Home Construction and Safety Standards.
Surety review of company financials and owner credit, which sets the premium.

Alabama Manufacturer Bond FAQs:

We run one plant. Is our bond $25,000?

No. The rule requires $25,000 per licensed facility or a minimum of $100,000. A manufacturer with a single licensed facility posts $100,000.

Our plant is in Alabama but every home ships out of state. Do we still need the license and bond?

Yes. The Commission states that all Alabama based manufacturers require a state license regardless of where their homes are going, and the bond is a condition of that license.

We are an out of state manufacturer. When do we need an Alabama license?

When your manufactured homes or modular buildings will be shipped into or sited in Alabama. The license is renewed annually and requires the same bond and $1,000,000 insurance.

What does the bond cost?

You pay a premium, not the face amount. The surety prices it after reviewing the company's financial statements, the owners' credit and the size of the bond your facility count requires.

Can the required amount change?

Yes. Rule 535-X-15-.03 lets the Commission decrease or increase bond requirements after a periodic review of valid claims. Confirm the figure with the Commission before each renewal.