Plumbing Contractor ($5,000) Bond - City of Auburn, AL in Alabama

Brief Summary

Auburn will not license a plumbing contractor or subcontractor until a $5,000 indemnity bond is on file. The city publishes the exact bond form it wants, so the bond can be written on that form and handed in with the business license application.

The City of Auburn, Alabama requires every plumbing contractor and plumbing subcontractor to post a $5,000 indemnity bond, or make a cash deposit, before a city business license is issued. The requirement is Section 8.2 of the City Code as amended by Ordinance 1842, and the City of Auburn is the obligee.

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How to Apply for a Plumbing Contractor ($5,000) Bond:

• Hold your State of Alabama plumbing license and keep a copy for the Revenue Office.
• Download the City of Auburn Plumbing Indemnity Bond form from the city's contractor page.
• Apply for the $5,000 bond with the business name exactly as it will appear on the Auburn license.
• Have the surety execute the city form, signed by the principal and the surety's attorney in fact.
• File the bond with your Auburn business license application and pay the flat license fee.
• Report gross construction receipts quarterly to keep the license current.

Detailed Information About the Alabama Plumbing Contractor ($5,000) Bond:

Subcontractors are included

Many plumbers assume the bond is the general contractor's problem. It is not. Section 8.2 of the Auburn City Code, as amended by Ordinance 1842 in July 1999, says each person applying for a license as a plumbing contractor or subcontractor must post a $5,000 indemnity bond with the city before the business license is issued. The amount is flat, with no tier tied to job size.

What the bond promises

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

How it fits with the business license

Auburn licenses contractors through the Finance Department Revenue Office, which accepts an indemnity bond or a cash deposit. Plumbers licensed by a State of Alabama licensure board must show proof of that license when applying. Subcontractors pay a $105 flat fee and general contractors pay $155, plus a quarterly fee of one quarter of 1 percent of gross construction receipts. Working inside city limits without a license brings a minimum late penalty of 25 percent plus 1 percent per month.

Cost

The surety sets the premium after reviewing the owner's credit and business history. It is a small share of the $5,000 face amount.

Eligibility and Requirements for a Alabama Plumbing Contractor ($5,000) Bond:

• Bond amount of exactly $5,000, the same for contractors and subcontractors.
• City of Auburn, Alabama named as obligee on the city's Plumbing Indemnity Bond form.
• A surety company authorized to act as surety under Alabama law.
• Proof of State of Alabama plumbing licensure presented with the license application.
• Bond posted before the business license is issued. A cash deposit is the only listed alternative.

Alabama Plumbing Contractor ($5,000) Bond FAQs:

Official and Additional Resources for the Alabama Plumbing Contractor ($5,000) Bond: