Surety Bond Encyclopedia

Residential Contractor ($5,000) Bond - Haines City, FL in Florida

Brief Summary

Residential builders in Haines City often miss that Florida law gives them a way out of this bond on new homes: a third party insured warranty policy for the buyer exempts that building. For everything else, the $5,000 bond is a code compliance filing with a premium that is a small fraction of the bond amount, so you register with the city without parking $5,000 in cash.

Haines City, Florida lists a $5,000 bond for residential contractors who pull building permits in the city. Florida Statutes 489.131(3)(e) caps a local contractor bond at $5,000, allows only one bond per contractor, conditions it only on compliance with the Florida Building Code, and makes it payable to the Florida Homeowners' Construction Recovery Fund. A contractor who provides a third party insured warranty policy on a new building for the purchaser or owner is exempt from the bond for that building.

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

Decide whether a third party insured warranty policy on a new home exempts that building, and keep the bond for all other permitted work.
Have your State of Florida certification or Polk County Municipal Board of Examiners residential contractor license number ready.
Apply for the $5,000 bond in the exact business name shown on that license.
Provide the owner's name and home address for the credit review that sets the premium.
Register with the Haines City Building Division with a copy of your license, proof of workers' compensation or an exemption, and liability insurance.
File the bond with Haines City before your first permit and keep it in force while you build in the city.

Detailed Information About the Florida Residential Contractor ($5,000) Bond:

The new construction exemption

Section 489.131(3)(e) of the Florida Statutes exempts a contractor from the local bond requirement with respect to a new building or structure when the contractor provides a third party insured warranty policy for the benefit of the purchaser or owner. The exemption is tied to that specific building. Remodels, additions and homes built without such a policy still fall under the bond, which is why most residential contractors keep one on file.

What the bond covers, and what it does not

Homeowners and builders both tend to treat this bond as a completion or workmanship guarantee. The statute says a local contractor bond shall be conditioned only upon compliance with the Florida Building Code adopted under section 553.73, and it makes the bond payable to the Florida Homeowners' Construction Recovery Fund. A code violation on permitted work is what it answers for.

Registering with Haines City

Any currently state licensed contractor may obtain a building permit in Haines City, but every contractor must register with the Haines City Building Division before a permit is issued. Certified contractors are licensed by the State of Florida. Registered contractors are licensed by the Municipal Board of Examiners of Polk County. Registration calls for a copy of the state or local license, proof of workers' compensation or a workers' compensation exemption, and liability insurance. There is no registration fee. Inspections are scheduled with the contractor's Web Code number.

Limits the state places on this bond

A Florida city may require one bond per contractor, in an amount not to exceed $5,000. The bond must be equally available to every contractor regardless of how long the contractor has been certified or registered and without regard to any financial responsibility requirement. Bond reciprocity is granted statewide, and the bond counts toward any financial responsibility requirement imposed by statute or rule.

Before the bond is issued, confirm the current bond form and filing steps with the Haines City Building Division at 863-421-3600 or 620 East Main Street.

Eligibility and Requirements for a Florida Residential Contractor ($5,000) Bond:

Bond amount of $5,000, the most a Florida city may require under 489.131(3)(e).
Payable to the Florida Homeowners' Construction Recovery Fund as the statute directs.
Bond condition limited to compliance with the Florida Building Code.
One bond per contractor.
Business name on the bond matching the residential contractor license exactly.

Florida Residential Contractor ($5,000) Bond FAQs:

Can I skip the bond on a new home?

Yes, for that home, if you provide a third party insured warranty policy for the benefit of the purchaser or owner. Florida Statutes 489.131(3)(e) exempts the contractor from the local bond with respect to that new building or structure. Work not covered by such a policy still needs the bond.

Does this bond guarantee the homeowner a finished house?

No. The statute conditions a local contractor bond only on compliance with the Florida Building Code and makes it payable to the Florida Homeowners' Construction Recovery Fund. It is not a completion bond or a workmanship warranty.

I already have a $5,000 bond on file in another Florida city. Do I need a new one here?

Florida grants bond reciprocity statewide, and the same statute says local bonds are filed in each county or municipality where a building permit is requested. Ask the Haines City Building Division whether it accepts a copy of your existing bond or wants its own filing.

How is the premium set?

The surety prices the bond mainly on the owner's personal credit, plus time in business and claim history. On a $5,000 bond the annual premium is a small part of the bond amount, and your quote shows the exact cost.