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Army Veteran Owned | Expert Surety Bonds Since 2004
Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
Pennsylvania lets an appraisal management company meet this $40,000 requirement with either a surety bond or a letter of credit from a qualifying bank. A bond keeps $40,000 of cash or bank credit free for the business. Either way, it goes in with the registration application to the State Board of Certified Real Estate Appraisers, and it stays open to claims even after the registration ends.
Pennsylvania requires every registered appraisal management company to maintain a $40,000 surety bond or a $40,000 letter of credit under 49 Pa. Code 36.451 and 36.452, the rules that carry out the Appraisal Management Company Registration Act, 63 P.S. 457.21 to 457.31. The bond is part of the registration application to the State Board of Certified Real Estate Appraisers and must come from a company authorized by the Pennsylvania Insurance Department to write surety business. AMCs exempt from state registration under section 1124(c) of FIRREA, known as federally regulated AMCs, do not register.
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The security requirement is in Subchapter E of 49 Pa. Code Chapter 36. Section 36.451 says a registrant shall maintain a surety bond or a letter of credit, and section 36.452 sets either one at $40,000. A surety bond must be issued by a company authorized by the Insurance Department to transact surety business in Pennsylvania. A letter of credit must be payable at an office of a commercial bank in the United States, and the issuing bank must hold minimum ratings from Fitch Ratings, Standard & Poor's or a comparable rating organization. The Board may require a larger amount or a different form of security after violations involving nonperformance or nonpayment, after changes affecting the surety or the bank, or after a failure to keep the minimum in place.
Under section 36.453, the bond must show the registrant's name and mailing address, the name and title of the compliance person, the surety's name, mailing address, telephone number and NAIC company code, and the bond number. It must include the surety's agreement to notify the Bureau if the bond is canceled or terminated. The bond is continuous, and the surety's aggregate liability cannot exceed the principal sum.
Section 36.456 lets the Department claim against the bond to recover unpaid fees for appraisal services, to collect civil penalties, investigation costs and fees owed to the Commonwealth, and to pay debts arising from appraisal management services in Pennsylvania. Claims on behalf of third parties are limited to activities involving the valuation of real estate in Pennsylvania. If the surety pays on the bond, the AMC has 15 days to obtain an additional surety bond that restores the minimum.
Under section 36.422, when an AMC terminates its registration early, the bond or letter of credit remains in effect and stays subject to claims. Plan on keeping it in place after the Pennsylvania registration closes.
Section 36.405 sets the initial registration application fee at $2,000 and the biennial renewal fee at $1,000. The AMC National Registry fee is separate and set by the ASC. Registration expires on the last day of June of each odd-numbered year. The registration application is filed through PALS.
Yes. Section 36.451 accepts either. A $40,000 letter of credit must be payable at a commercial bank office in the United States, and the bank must meet minimum ratings. If the bank's rating falls below the minimum, the AMC has 45 days to replace the letter of credit.
Federally regulated AMCs that are exempt from registering under section 1124(c) of FIRREA do not register with the Board. Every AMC that does register must keep the $40,000 bond or letter of credit in place.
The Department makes the claim. It can recover unpaid fees for appraisal services, civil penalties, investigation costs, fees owed to the Commonwealth and debts from appraisal management services in Pennsylvania. Claims for third parties must involve the valuation of real estate in Pennsylvania.
It stays in effect. Under 49 Pa. Code 36.422, the bond or letter of credit remains subject to claims after an early termination of the registration.
Every two years. Registration expires on the last day of June of each odd-numbered year, and the biennial renewal fee is $1,000. The bond is continuous, so it carries across renewals as long as it stays in force.
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