Surety Bond Encyclopedia

Appraisal Management Company ($25,000) Bond - Statewide in Alabama

Brief Summary

The $25,000 registration bond has to be filed with the Alabama Real Estate Appraisers Board before an AMC registration is issued, and it has to be kept whole every year after that. A surety bond lets you meet that requirement for an annual premium instead of leaving $25,000 in cash or securities with the Board, and it is written on the Board's own AMC bond form.

Every appraisal management company registering with the Alabama Real Estate Appraisers Board must post a $25,000 surety bond under Code of Alabama 34-27A-55 and Ala. Admin. Code 780-X-17-.03(f). The amount is flat. The State of Alabama is the obligee, the bond accrues to the state for the benefit of anyone with a claim against the AMC, and its face amount must be restored each year when the registration is renewed.

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How to Apply for a Appraisal Management Company ($25,000) Bond:

Prepare the AMC Registration Application and the Consent to Service of Process from the Alabama Real Estate Appraisers Board.
Complete the bond application and review the quoted premium.
Pay the premium and receive the executed $25,000 Appraisal Management Company Registration Bond on the Board's form, with the power of attorney attached.
Sign the bond as principal exactly as the company is named on the registration application.
File the bond with the Board along with the $3,500 application fee and owner background checks.
Before each annual expiration, renew with the $2,000 renewal fee plus the ASC registry fee and keep the bond at its full $25,000.

Detailed Information About the Alabama Appraisal Management Company ($25,000) Bond:

One flat amount, renewed every year

Alabama does not tier this bond. Rule 780-X-17-.03(f) says that in addition to the application fee, an applicant for registration shall post with the Board a surety bond in the amount of $25,000. The bond is not a one time filing. The rule requires the face amount to be restored annually on renewal, and registrations run one year from the date of issue. If a claim has been paid out of the bond, it has to be brought back to the full $25,000 before the registration can renew.

What the bond guarantees

The bond is written on the Board's form titled Appraisal Management Company Registration Bond, with the State of Alabama as obligee, under sections 34-27A-50 and 34-27A-55 of the Code of Alabama. It guarantees that the AMC will promptly pay any amount of money due under the AMC article, and under rule 780-X-17-.03(f) it accrues to the state for the benefit of a claimant against the registrant to secure faithful performance of the AMC's obligations. The surety can cancel on 60 days written notice to the AMC and to the Alabama Real Estate Appraisers Board.

Cash is allowed

The Board may accept an appropriate deposit of cash or security in place of the bond. A surety bond meets the same requirement while the $25,000 stays in the business.

Fees that go with it

The initial AMC registration application fee is $3,500. The annual renewal fee is $2,000 plus the Appraisal Subcommittee National Registry fee, which the renewal application sets at $25 for each appraiser who completed an appraisal for a covered transaction in Alabama during the reporting year. AMCs owned and controlled by an insured depository institution and regulated by a federal agency use separate federally regulated AMC forms, so confirm with the Board which bond filing applies to that registration type.

Other items on the application

The Board also requires criminal background checks for owners with 10 percent or more ownership, organizational documents and a consent to service of process. An AMC cannot be owned by someone whose appraiser license was revoked or denied and not later restored.

How premium is set

The surety sets an annual premium after reviewing the credit of the owners and the financial strength of the company. Established AMCs with good credit pay the lowest rates.

Eligibility and Requirements for a Alabama Appraisal Management Company ($25,000) Bond:

Bond amount of exactly $25,000.
State of Alabama named as obligee on the Board's AMC Registration Bond form.
Bond face amount restored annually on renewal under rule 780-X-17-.03(f).
Surety cancellation only on 60 days written notice to the AMC and the Board.
Owner and company credit review, which sets the premium rate.

Alabama Appraisal Management Company ($25,000) Bond FAQs:

Does the bond amount change with the size of my appraiser panel?

No. Rule 780-X-17-.03(f) sets one amount of $25,000 for every AMC registrant. Panel size affects the ASC National Registry fee, which is $25 per appraiser who completed a covered transaction appraisal in Alabama, not the bond.

Can I deposit cash instead of buying a bond?

Yes. The Board may accept an appropriate deposit of cash or security in lieu of the bond. A surety bond keeps the $25,000 in your operating capital.

What happens to the bond at renewal?

The registration lasts one year from issue. At renewal the bond must be in force at its full $25,000 face amount, and the rule requires the face amount to be restored annually.

Who can make a claim on the bond?

The bond runs to the State of Alabama and accrues for the benefit of any claimant against the AMC to secure the faithful performance of its obligations under the AMC article of the Code of Alabama.

Can the surety cancel the bond?

Yes, but only on 60 days written notice to the AMC and to the Alabama Real Estate Appraisers Board. You would need a replacement bond on file before the cancellation takes effect to keep the registration current.