Surety Bond Encyclopedia

Homebuilder ($10,000) Bond - City of Dothan, AL in Alabama

Brief Summary

If you build homes for others inside Dothan city limits, the city wants a $10,000 surety bond on file before your business license is issued and before your permits move. You pay an annual premium for it, the city supplies the form, and many builders are bonded the same day they apply.

The City of Dothan requires a $10,000 surety bond from home builders as part of the city business license. Dothan's license schedule sets $10,000 for residential building and housing construction above $10,000, and the city also requires a license from the State of Alabama Home Builders Licensure Board. Owners building a house for themselves on their own property do not need the business license.

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How to Apply for a Homebuilder ($10,000) Bond:

Confirm you need it. Owners building their own home on their own property are not required to hold the business license.
Hold a current license from the State of Alabama Home Builders Licensure Board.
Apply for the City of Dothan business license as a home builder.
Use the bond form the city emails after you apply.
Complete the bond application and review the quoted premium.
Pay the premium and return the executed $10,000 bond to the city before pulling permits.

Detailed Information About the Alabama Homebuilder ($10,000) Bond:

Are you exempt?

Dothan's residential permit instructions say an owner who is building a house for himself on his own property does not need a business license. Everyone who builds for someone else, or builds to sell, must hold a City of Dothan business license and provide a surety bond.

Where the $10,000 comes from

Section 18-22 of the Dothan city code, adopted by Ordinance 2007-393, lists residential building and housing construction above $10,000 as a contractor classification requiring state certification and a $10,000 surety bond. The figure is flat. It does not rise with the number of homes you build.

The state license

Dothan's application asks home builders for a license from the State of Alabama Home Builders Licensure Board. Alabama Code 34-14A-2 defines a residential home builder as someone who builds for sale or for a fee where the cost of the work exceeds $10,000, or $2,500 for roofing. Holding that state license does not waive the city bond.

Smaller jobs

Dothan's residential permit instructions limit a licensed subcontractor to $10,000 of residential work per job. Above that, you need the home builder license and this bond.

Filing

After you apply for the business license, the city emails the bond form and instructions. Dothan's residential permit checklist also lists the surety bond among the items required before a permit is issued. The City of Dothan is the obligee. Confirm the current form and filing steps with the Business License office in Room 315 of the Dothan Civic Center before the bond is issued.

Eligibility and Requirements for a Alabama Homebuilder ($10,000) Bond:

Bond amount of $10,000 under Dothan Code Sec. 18-22.
City of Dothan named as obligee.
State home builder license, which the city application requires.
Business name on the bond matching the city license application.
Owner credit review, which drives the premium rate.

Alabama Homebuilder ($10,000) Bond FAQs:

I am building my own house on my own lot. Do I need this bond?

Dothan's residential permit instructions say an owner building for himself on his own property does not need a business license. The bond is tied to that license, so it applies to builders working for others or building to sell.

Does my state home builder license cover the city requirement?

No. Dothan asks for the state license and, separately, a surety bond with the business license.

Does the amount go up if I build more homes?

No. The city schedule lists a single $10,000 amount for residential building construction.

What will the bond cost me?

You pay an annual premium, not the full $10,000. The surety sets the premium after reviewing the owner's personal credit and the business's history, so two contractors applying for the same bond can be quoted different rates. Applying online gets you an actual quote rather than a guess.

When does the license, and the bond behind it, come up for renewal?

Dothan business licenses expire on December 31 each year. The city accepts renewals through the end of January without penalty. After January 31 a 15% penalty applies, and it rises to 30% on March 1. Keep the bond active through every license year and ask the city whether it wants a continuous bond or a new one with each renewal.