Contractor License ($10,000) Bond - City of Saraland, AL in Alabama

Brief Summary

Saraland will not issue a contractor a city business license without the paperwork in order, and the $10,000 contractor license bond is part of it. Keep in mind the license expires every December 31, so the bond has to stay in force through each renewal. You pay a yearly premium instead of putting up $10,000, and the bond is usually issued the same day.

The City of Saraland, Alabama requires a $10,000 contractor license bond from contractors who work inside the city limits. The City of Saraland is the obligee. The bond guarantees that the contractor will follow city ordinances, permit rules and building codes, and pays valid claims up to $10,000 if the contractor does not. Confirm the current bond form and filing steps with Saraland City Hall before the bond is issued.

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

• Have your legal business name exactly as it will appear on your Saraland business license.
• Owner name, home address and Social Security number for the credit review.
• Complete the bond application and review the premium quote.
• Pay the premium and receive the signed $10,000 bond naming the City of Saraland as obligee.
• File the bond with your business license application at Saraland City Hall, 727 Saraland Boulevard South, along with a copy of your state license.
• Renew the city license between January 1 and January 31 and keep the bond in force each year.

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

The license expires every December 31

Every business operating inside Saraland city limits, home occupations included, must hold a City of Saraland business license and display it in a conspicuous place. The license expires on December 31 each year. Renewals are due January 1 through 31. A renewal filed by February 28 carries a 15% penalty plus 1% interest, and after February 28 the penalty rises to 30% plus 1% interest and keeps climbing each month. Keep the bond in force through every renewal so the license and the bond stay current together.

Who posts the bond

The contractor holding the city license posts the $10,000 bond, with the City of Saraland as obligee. The bond backs the contractor's promise to comply with city ordinances, pull the required permits and build to the codes the city enforces. If the city or a property owner suffers a loss because the contractor did not, a claim can be made against the bond up to $10,000. The contractor repays the surety for any claim it pays.

State licensing is separate

Saraland asks licensed professions, contractors and electricians among them, to provide a copy of their state license with the city application. At the state level, the Alabama Department of Revenue advises that a contract amount over $50,000 on a project requires a General Contractor's License from the Alabama Licensing Board for General Contractors. The city bond does not replace the state license, and the state license does not replace the city bond.

What the license costs

The city business license fee is calculated as gross receipts times the tax rate, plus a $14 issuance fee. Businesses with more than $1,000,000 in gross receipts are calculated using a regression method. New applications with a physical location are taken at City Hall and require inspections by the Building Inspection Department and the Fire Department.

How the bond premium is set

You do not pay $10,000. The surety quotes a yearly premium after reviewing the owner's personal credit and the business history, and stronger credit earns a lower rate.

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

• Bond amount of $10,000.
• City of Saraland, Alabama named as obligee.
• A current City of Saraland business license, displayed in a conspicuous place.
• A copy of your state contractor license where the state requires one.
• A state General Contractor's License for any contract over $50,000 on a project.

Alabama Contractor License ($10,000) Bond FAQs:

Official and Additional Resources for the Alabama Contractor License ($10,000) Bond: