Surety Bond Encyclopedia

Retailer Bond - Alabama Manufactured Housing Commission in Alabama

Brief Summary

Alabama retailer bonds come in two sizes, and the break point is your fourth sales location. One to three facilities post $25,000. More than three post $50,000. Get the count right before the bond is written so the penal sum on the AMHC form fits the lots you are licensing, then pay a yearly premium instead of tying up the full amount.

Every manufactured home retailer licensed by the Alabama Manufactured Housing Commission must post a surety bond under Ala. Admin. Code 535-X-15-.03. The amount is $25,000 for 1 to 3 facilities and $50,000 for more than 3, and $500,000 of general liability insurance is also required. The dealer license fee is $450, and licenses run from January 1 through December 31.

We can help with all Alabama bonds!

How to Apply for a Retailer Bond:

Count your licensed sales facilities. One to three means a $25,000 bond, and more than three means $50,000.
Place $500,000 of general liability insurance.
Make sure a salesperson is trained and licensed by the Commission, or enrolled in the next course under a provisional license.
Apply for the bond in the dealership's exact legal name and DBA as shown on the AMHC retailer application.
Have the surety execute the AMHC License/Permit Bond form with the correct penal sum.
File the Application for Retailer License with the bond and insurance details and the $450 license fee, then renew for each January 1 to December 31 license year.

Detailed Information About the Alabama Retailer Bond:

Two tiers based on sales locations

Rule 535-X-15-.03 sets the retailer bond at $25,000 for 1 to 3 facilities and $50,000 for more than 3. A retailer opening a fourth lot moves up to the $50,000 bond. General liability insurance of $500,000 applies at either tier. The rule was adopted under Code of Alabama 1975, Section 24-6-4, and the Commission may decrease or increase bond requirements after a periodic review of valid claims.

Who needs a retailer license

Any retailer, listed as a dealer in the Commission's fee schedule, located within or outside Alabama must apply for a license every year to sell manufactured homes in the state. The application offers both manufactured home (HUD) and modular license types and cites Code of Alabama 1975, Sections 24-4A-3 and 24-6-4. Retailers and their salespersons must document U.S. citizenship.

The salesperson requirement

A retail license alone does not let you sell. A licensed retailer must have a salesperson who is trained and licensed by the Commission. New salespersons complete an 8 hour course before receiving an original license, may work under a provisional license until the next class is available, and pay a $200 license fee. Salesperson licenses run from March 1 through the end of February, on a different cycle from the retailer license.

What the bond guarantees

The bond is written on the Commission's License/Permit Bond form for the purpose of consumer protection. It guarantees that the retailer and all of its agents and employees faithfully and honestly perform their obligations under Alabama law and Commission rules. The Commission decides whether a claim is valid and who is responsible under rule 535-X-15-.04. The surety's total liability is capped at the bond amount and does not stack from year to year. The surety must give 60 days notice by certified mail before cancelling, and claims remain possible for up to 12 months afterward. Violations can bring suspension or revocation of the license to sell 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 Retailer Bond:

Bond of $25,000 for 1 to 3 facilities or $50,000 for more than 3, 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 $500,000.
A salesperson trained and licensed by the Commission.
Proof of U.S. citizenship for the retailer applicant.
Credit review of the owners by the surety, which sets the premium.

Alabama Retailer Bond FAQs:

We just opened a fourth lot. Does our bond change?

Yes. The $25,000 bond covers 1 to 3 facilities. More than 3 facilities requires $50,000, so contact the Commission about the bond on file when you add the location.

We are based outside Alabama. Do we need this license and bond to sell homes into the state?

Yes. The Commission requires any retailer within or outside Alabama to apply annually for a license to sell manufactured homes in the state, and the bond is a condition of that license.

Is the retailer license enough to start selling?

No. A licensed retailer must also have a salesperson who is trained and licensed by the Commission. New salespersons can work under a provisional license until the next course is offered.

What does the bond cost?

You pay a premium, not the $25,000 or $50,000 face amount. The surety sets it after reviewing the owners' credit and the dealership's history, and you see the quote before you buy.

When does the retailer license expire?

December 31. Retailer licenses are valid from January 1 through December 31 of the year issued and must be renewed every year.