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Army Veteran Owned | Expert Surety Bonds Since 2004
Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
The $20,000 Private School Performance Bond is the step between an Alabama real estate school and a license number from the Alabama Real Estate Commission. The Commission will not accept the online school application until the bond is in hand, so most schools order it first. You pay an annual premium instead of tying up $20,000, the Commission's own form is used, and the bond stays in force across every Alabama location the school operates.
Alabama requires a $20,000 surety bond, payable to the Alabama Real Estate Commission as Trustee, from every proprietary school licensed to teach prelicense or postlicense real estate courses. Code of Ala. 34-27-6 sets the amount. Schools that offer only continuing education, and accredited colleges and universities, are approved rather than licensed and do not post the bond. The bond must be accepted by the Commission before the school application can be filed.
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The Alabama Real Estate Commission recognizes two kinds of schools. An approved school offers only continuing education courses and pays no license fee and posts no bond. A licensed school offers prelicense or postlicense courses, which means it is a proprietary school under Code of Ala. 34-27-6 and must furnish a surety bond payable to the Commission in the amount of $20,000. Accredited colleges and universities follow the approved school process even when they teach prelicense courses, because the statute treats any accredited college or university that offers a Commission approved course as an approved school.
The statute conditions the bond on the obligor paying up to $20,000 in the aggregate of all judgments recovered against the school for damages arising from the school's collection of tuition or fees. The Commission's Private School Performance Bond form spells this out as indemnifying students for losses from breach of contract, fraud or misrepresentation in enrollment or the conduct of courses, including refunds of tuition and fees. Liability is capped at $20,000 in the aggregate no matter how many claims are made. One bond covers all of the school's Alabama locations for the period written on the form.
The Commission's instructions put the bond second in line. The school administrator application and online administrator exam come first. The $20,000 bond, with the Alabama Real Estate Commission named as trustee, is submitted next and must be accepted before the online school application is opened. The license fee follows, $500 if the school is applying in the first year of the approval period or $250 in the second year, since the statute sets the principal and branch school fee at $250 per year and the renewal at $125 per year. Approval periods run October 1 through September 30, and all schools, administrators, instructors and courses renew between June 15 and September 30 of odd numbered years.
The surety may cancel on 30 days written notice to the Commission. If the bond is revoked or cancelled the school has 10 days to file a new one, and failure to keep a bond on file results in immediate suspension of the school license. The Legislature passed HB225 in 2025, which rewrites section 34-27-6 and restates the bond as an amount set by the Commission not to exceed $20,000, so confirm the current figure and form with the Commission before the bond is issued.
No. Continuing education only providers are approved schools, not licensed schools. The $20,000 bond under Code of Ala. 34-27-6 applies to proprietary schools licensed to teach prelicense or postlicense courses. Accredited colleges and universities are also treated as approved schools even when they teach prelicense material.
No. The Commission's instructions require the bond to be submitted and accepted before the online school application is made available. Order the bond as soon as the administrator application and exam are done.
The Commission's bond form covers the school's operation at all Alabama locations during the bond period, so a single $20,000 bond is written per school rather than per branch. The branch school license itself still carries its own $250 per year fee under the statute.
The surety can cancel on 30 days written notice to the Commission. The school then has 10 days to file a replacement. Operating without a bond on file results in immediate suspension of the school license.
The surety reviews the owner's personal credit and the school's history. At this bond size most applicants qualify, and the premium is an annual charge rather than a deposit of the $20,000.
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