Surety Bond Encyclopedia

Manufactured Housing INSTALLER ($25,000) Bond - Statewide in Texas

Brief Summary

If you already hold a Texas manufactured housing retailer license, you may not need this bond at all, because Tex. Occ. Code 1201.111 lets a licensed retailer become an installer without filing more security. Everyone else files a $25,000 bond on MHD Form 1025 with the TDHCA Manufactured Housing Division. It is a continuous bond, so once it is on file it stays in effect until the surety cancels it.

Texas requires a $25,000 bond or other security from every manufactured housing installer before the TDHCA Manufactured Housing Division will issue or renew the license, under Tex. Occ. Code 1201.105 and 1201.106. The bond is payable to the Manufactured Homeowner Consumer Claims Program and is filed on MHD Form 1025. A licensed retailer does not have to file separate security to add an installer license.

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How to Apply for a Manufactured Housing INSTALLER ($25,000) Bond:

Check whether you hold a Texas retailer license. If so, Section 1201.111 lets you add the installer license without new security.
Complete the required eight hours of law instruction and four hours of installation instruction.
Complete the bond application with the business name exactly as it will appear on the TDHCA license.
Pay the premium and have the surety execute MHD Form 1025 for $25,000.
File the bond with the TDHCA Manufactured Housing Division in Austin. The form states it is valid when received there.
Notify MHD at least 10 days before any change in ownership or location and provide a bond endorsement.

Detailed Information About the Texas Manufactured Housing INSTALLER ($25,000) Bond:

Check the retailer exemption first

Tex. Occ. Code 1201.111(b) says a licensed retailer is not required to file a bond or other security to be licensed as a broker or installer. If your company already holds a Texas retailer license and its $50,000 security, the installer license does not call for a second instrument. The exemption covers retailers only. A manufacturer that installs homes is still an installer under the Act's definition and is not named in that exemption.

The bond for everyone else

Section 1201.106 sets installer security at $25,000. The department may not issue or renew a license without it. Under Section 1201.105 the bond is payable to the Manufactured Homeowner Consumer Claims Program and must be written by a company authorized to do business in Texas. Instead of a bond, security may be held in or by a federally insured depository institution located in Texas, and the Division provides MHD Form 1016, Assignment of Certificate of Deposit as Security, for that route.

The director can require additional security from an applicant with a prior license revocation, unpaid administrative penalties or unreimbursed costs to the claims program.

How the bond behaves

MHD Form 1025, the Continuous Manufactured Housing Licensing Surety Bond, stays in effect until the surety cancels it and is open to successive claims up to its face value. The surety must give MHD written notice at least 60 days before cancellation, and the license is suspended on the effective date of cancellation. If a paid claim impairs the security, the licensee must restore it to the full amount within 60 days.

A change in ownership or location does not require a new bond, but the Division must be notified at least 10 days before the change and the licensee must provide an endorsement to the original bond. After an installer stops doing business, the Division holds the security until the second anniversary of closing or until the director determines no claim exists, whichever is later.

Training does not replace the bond

Applicants complete eight hours of instruction in the law plus four hours of specialized instruction on installation under Section 1201.104. That training is a separate licensing step. The license is valid for two years.

Eligibility and Requirements for a Texas Manufactured Housing INSTALLER ($25,000) Bond:

Security of $25,000 for an installer license under Tex. Occ. Code 1201.106.
Payable to the Manufactured Homeowner Consumer Claims Program.
MHD Form 1025 Continuous Manufactured Housing Licensing Surety Bond, Rev. 11/15/2019.
Surety authorized to do business in Texas, or a certificate of deposit assigned on MHD Form 1016.
Security restored to full face value within 60 days after a paid claim.
Owner credit review by the surety, which affects the premium.

Texas Manufactured Housing INSTALLER ($25,000) Bond FAQs:

I already have a retailer license. Do I need this bond to install?

No. Tex. Occ. Code 1201.111(b) states that a licensed retailer is not required to file a bond or other security to be licensed as an installer.

Who is the obligee?

The bond is payable to the Manufactured Homeowner Consumer Claims Program and is filed with the TDHCA Manufactured Housing Division on MHD Form 1025.

Do I renew the bond every time I renew my license?

Form 1025 is a continuous bond that remains in effect until the surety cancels it. The license itself is valid for two years, and the department may not renew it unless the security is on file.

Can I use a certificate of deposit instead?

Yes. Section 1201.105 allows other security held in or by a federally insured depository institution located in Texas. MHD provides Form 1016 for assigning a certificate of deposit.

What happens if my bond is canceled?

The surety must give MHD at least 60 days written notice before cancellation, and your installer license is suspended on the effective date of cancellation.