Surety Bond Encyclopedia

Manufactured Housing BROKER ($50,000) Bond - Statewide in Texas

Brief Summary

A Texas manufactured housing broker never takes title to a home, yet the state still asks for the same $50,000 of security it asks of a retailer. The bond lets you meet that requirement without tying up $50,000 in a bank deposit, and it is written on the Manufactured Housing Division's own Form 1025 so it can go straight into your license packet.

Anyone who negotiates the sale or exchange of two or more manufactured homes to consumers in a 12 month period needs a Texas broker's license, and Texas Occupations Code 1201.106 sets the broker's security at $50,000. The bond is filed with the TDHCA Manufactured Housing Division on MHD Form 1025 with the $350 license fee. Licenses run two years and the bond must be on file to renew.

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How to Apply for a Manufactured Housing BROKER ($50,000) Bond:

Register the business name first, with the county clerk for a sole proprietorship or general partnership, or with the Texas Secretary of State for a corporation or other entity.
Complete the eight hour core license education class unless you were licensed or registered with the department on September 1, 1987.
Submit fingerprints for the criminal background check and apply within 30 days of doing so.
Obtain the $50,000 bond on MHD Form 1025 with the business name exactly as it appears on the license application.
Send the application, bond, class certificate, business registration copy and the $350 fee to the TDHCA Manufactured Housing Division.
Renew every two years before the license expires, with the bond still in force.

Detailed Information About the Texas Manufactured Housing BROKER ($50,000) Bond:

What a broker license covers

The Manufactured Housing Division of the Texas Department of Housing and Community Affairs describes a broker as someone who sells manufactured homes for a buyer or a seller for a commission. Brokers never own the homes they sell and do not appear on the titling paperwork. Under Texas Occupations Code 1201.101(c), a person who negotiates the sale or exchange of two or more manufactured homes to consumers in a 12 month period must hold a broker's license.

The bond amount

Section 1201.106(a) sets the security for a broker at $50,000, the same figure it sets for a retailer. Section 1201.105 makes the bond payable to the manufactured homeowner consumer claims program, which the department runs to provide a remedy for damages caused by prohibited conduct of a license holder. The bond must come from a surety authorized to do business in Texas. A cash alternative is allowed, kept at a federally insured depository institution in Texas.

The director can require more than $50,000 under 1201.106(a-1) when the applicant or a related person has had a license revoked, has left the claims program with unreimbursed costs above the available bond, or has an unpaid administrative penalty under a final order.

The rule brokers miss

Brokers usually show homes wherever the homes sit, not on a retail lot. Section 1201.107(d) says that when a broker takes part in a sale anywhere other than a parcel where more than one home is offered to the public, the broker must identify the bond on file with the department and state in the sales contract that this bond applies to the sale. A separate bond is also required for each place of business the broker maintains.

Filing and keeping the license

The bond goes on MHD Form 1025, the Continuous Manufactured Housing Licensing Surety Bond. It stays in force until the surety cancels it, and the surety must give the director written notice at least 60 days before cancellation. If the bond is canceled, the license is suspended on the cancellation date. Licenses are valid for two years from issuance, and the renewal application, continuing education proof and fee must arrive before the license expires.

Eligibility and Requirements for a Texas Manufactured Housing BROKER ($50,000) Bond:

Security of $50,000 under Texas Occupations Code 1201.106(a)(3).
A surety company authorized to do business in Texas.
Bond written on MHD Form 1025 and payable for use by the TDHCA Manufactured Housing Division.
A separate bond for each place of business the broker maintains.
Owner credit review by the surety, which sets the premium.

Texas Manufactured Housing BROKER ($50,000) Bond FAQs:

I only broker a few homes a year. Do I still need the license and bond?

The broker license is triggered by negotiating the sale or exchange of two or more manufactured homes to consumers in a 12 month period under Texas Occupations Code 1201.101(c). Once you reach that threshold, the license and the $50,000 bond are required.

Why is a broker's bond the same size as a retailer's?

Texas Occupations Code 1201.106(a) sets $50,000 for a retailer and $50,000 for a broker. The amount does not drop because a broker never holds title to the homes.

What do I have to put in a sales contract about my bond?

If you take part in a sale anywhere other than a parcel where more than one home is offered to the public, 1201.107(d) requires you to identify the bond on file with the department and to state in the contract that the bond applies to the sale.

Who can collect on the bond?

The bond is payable to the manufactured homeowner consumer claims program, which TDHCA runs to provide a remedy for damages caused by prohibited conduct of a license holder. It stays open to successive claims up to the $50,000 face amount.

What happens if the surety cancels?

The surety must notify the director in writing at least 60 days before cancellation, and the license is suspended on the date the cancellation takes effect. Have a replacement bond filed before that date.