General Contractor ($1,000) Bond - City of Auburn, AL in Alabama

Brief Summary

The $1,000 tier is the lower of Auburn's two general contractor bonds, and it only fits if every contract you take stays under $20,000. Get the tier right before you file and the bond, the business license and your first building permit can all move together.

The City of Auburn, Alabama requires a $1,000 indemnity bond from general contractors whose contracts are each under $20,000. A contractor with any single contract of $20,000 or more posts the $5,000 bond instead. The requirement sits in Section 8.1 of the City Code as amended by Ordinance 1842, and the bond must be posted before the business license and building permit are issued.

We can help with all Alabama bonds!

How to Apply for a General Contractor ($1,000) Bond:

• Confirm every contract you plan to sign is under $20,000. If not, apply for the $5,000 bond instead.
• Download the City of Auburn General Contractors Indemnity Bond form and mark the $1,000 option.
• Apply for the bond using the business name that will appear on the Auburn license.
• Have the surety execute the form, signed by the principal and the surety's attorney in fact.
• File the bond with the Auburn business license application and pay the $155 general contractor flat fee.
• Bring proof of any State of Alabama licensure board license that applies to your work.

Detailed Information About the Alabama General Contractor ($1,000) Bond:

Which tier you are in

Auburn sets its general contractor bond by contract size. Section 8.1 of the City Code, as amended by Ordinance 1842 in July 1999, calls for a $1,000 indemnity bond from a general contractor making contracts, no one of which reaches $20,000. Once any single contract is $20,000 or more, the requirement becomes $5,000. The threshold looks at the largest individual contract, not your annual total. If you expect to bid a job at or above $20,000 during the license year, the $5,000 bond is the one you need.

What the bond promises

The city's General Contractors Indemnity Bond form names the City of Auburn as obligee. The contractor agrees to perform the work faithfully, follow Auburn's ordinances and rules on construction, pay all licenses, taxes, permit and inspection fees, and hold the city harmless from loss caused by the work or materials. The contractor must also restore any street, alley, sidewalk or property disturbed by the job and keep it in good repair for one year.

Licensing alongside the bond

The Finance Department Revenue Office issues Auburn contractor licenses. The city accepts an indemnity bond or a cash deposit. General contractors pay a $155 flat fee plus a quarterly fee of one quarter of 1 percent of gross construction receipts. Contractors licensed by a State of Alabama licensure board, such as homebuilders, must show proof of that state license when applying.

Cost

The surety sets the premium after reviewing the owner's credit and business history. At a $1,000 face amount the premium is modest.

Eligibility and Requirements for a Alabama General Contractor ($1,000) Bond:

• Bond amount of $1,000, limited to contractors with no single contract of $20,000 or more.
• City of Auburn, Alabama named as obligee on the city's General Contractors Indemnity Bond form.
• A surety company authorized to act as surety under Alabama law.
• Bond posted before the business license and building permit are issued.
• A cash deposit is the only alternative the city lists.

Alabama General Contractor ($1,000) Bond FAQs:

Official and Additional Resources for the Alabama General Contractor ($1,000) Bond: