North Carolina Manufactured Housing Dealer Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a North Carolina Manufactured Housing Dealer bond
At a Glance:
- Lowest Cost: $100 per year or $10 per month
- Bond Amount: Determined on a case-by-case basis (more on this later)
- Who Needs it: Manufactured home dealers, manufacturers, and set-up contractors in North Carolina
- Purpose: To ensure the public will receive compensation for financial harm if the dealer, manufacturer, or contractor commits fraud or breaches consumer contracts
- Who Regulates Manufactured Homes in North Carolina: The North Carolina Manufactured Housing Board
Background
North Carolina Statute 143-143.11 requires manufactured home dealers, manufacturers, and set-up contractors to obtain a license with the Manufactured Housing Board. The North Carolina legislature enacted the licensing requirement to ensure that these businesses act ethically. To provide financial security for the enforcement of the licensing law, dealers, manufacturers, and set-up contractors must purchase and maintain a surety bond to be eligible for licensure.
What is the Purpose of the North Carolina Manufactured Housing Dealer Bond?
North Carolina requires manufactured housing dealers, manufacturers, and set-up contractors to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the business fails to comply with the regulations outlined in North Carolina Statute 143-143.12. Specifically, the bond protects the public if the dealer, manufacturer, or contractor engages in any acts of fraud or breaches any consumer contracts. In short, the bond is a type of insurance that protects the public if the business violates the terms of its license.
How Can an Insurance Agent Obtain a North Carolina Manufactured Housing Dealer Surety Bond?
BondExchange makes obtaining a North Carolina Manufactured Housing Dealer Bond easy. Simply login to your account and use our keyword search to find the “Manufactured Housing” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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How is the Bond Amount Determined?
North Carolina Statute 143-143.12 dictates that the bond amounts for manufactured housing dealers, manufacturers, and set-up contractors must be as follows:
- Dealers: $35,000 for dealers with one place of business and an additional $25,000 per subsequent place of business for dealers with more than one location
- Manufacturers*: $2,000 per home manufactured in the previous license year to a maximum requirement of $100,000
- Set-Up Contractor: $10,000
*First-time license applicants will determine their bond amount based on the estimated amount of homes they will manufacture in the current year.
Is a Credit Check Required for the North Carolina Manufactured Home Dealer Bond?
Surety companies will run a credit check on the applicant to determine eligibility and pricing for the North Carolina Manufactured Home Dealer bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.
How Much Does the North Carolina Manufactured Home Dealer Bond Cost?
The North Carolina Manufactured Home Dealer Bond can cost anywhere between 1% to 7.5% of the bond amount per year. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the cost of a $10,000, $35,000, and $100,000 bond requirement.
$10,000 Manufactured Home Dealer Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 680+ | $100 | $10 |
| 625 – 679 | $150 | $15 |
| 575 – 624 | $375 | $38 |
| 550 – 574 | $500 | $50 |
| 500 – 549 | $750 | $75 |
$35,000 Manufactured Home Dealer Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 680+ | $350 | $35 |
| 625 – 679 | $525 | $53 |
| 575 – 624 | $1,113 | $112 |
| 550 – 574 | $1,750 | $175 |
| 500 – 549 | $2,625 | $263 |
$100,000 Manufactured Home Dealer Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 680+ | $1,000 | $100 |
| 625 – 679 | $1,500 | $150 |
| 575 – 624 | $3,750 | $375 |
| 550 – 574 | $5,000 | $500 |
| 500 – 549 | $7,500 | $750 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
Who is Required to Purchase the Bond?
North Carolina requires manufactured home dealers, manufacturers, and set-up contractors to purchase a surety bond as a prerequisite to obtaining a business license.
To paraphrase North Carolina Statute 143-143.9, a dealer is a person who buys, sells, or displays for sale 3 or more manufactured homes in a 12- month period. Banks and finance companies that acquire manufactured homes as part of their regular course of business are exempt from this definition. Additionally, individual salespersons employed by the dealer are not required to be bonded.
The same statute defines a manufacturer as a person who assembles manufactured homes to sell to dealers and a set-up contractor as a person who set ups manufactured homes for consumers.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Businesses Apply for a North Carolina Manufactured Home License?
Businesses in North Carolina must navigate several steps to obtain a Manufactured Home License. Below are the general guidelines, but applicants should refer to the Manufactured Housing Board’s licensing page for details on the process.
License Period – All North Carolina Manufactured Home Licenses expire on June 30 of each year and must be renewed before the expiration date
All applicants, regardless of the license classification, must undergo a criminal history check and be emailed a fingerprint packet after submitting their application.
Dealer License
Step 1 – Establish an Escrow or Trust Account
Dealers are required to establish either an escrow or trust account with the sole purpose of holding consumer deposits. Dealers must submit information relating to the account on the bank’s letterhead with their application.
Step 2 – Purchase a Surety Bond
Dealers with one place of business must purchase a $35,000 surety bond. Dealers with multiple places of business must add an additional $25,000 to their bond’s limit for each subsequent business location.
Step 3 – Complete the Application
Dealers should submit their completed license applications, including an application fee of $250 per location, online here.
Manufacturers License
Step 1 – Purchase a Surety Bond
Manufacturers must purchase a surety bond with a limit of $2,000 for every manufactured home they expect to produce in the current year. The limit may not exceed $100,000.
Step 2 – Complete the Application
Manufacturers should submit their completed license applications, including a $300 fee, online here.
Set-Up Contractor License
Step 1 – Hire a Qualifier
Set-up contractors must employ at least one individual that has passed a written test administered by the Manufactured Building Division at the following address:
Albemarle Building
325 N. Salisbury Street
Raleigh NC 27603-5926
Step 2 – Purchase a Surety Bond
Set-up contractors must purchase and maintain a $10,000 surety bond
Step 3 – Complete the Application
Set-up contractors should submit their completed applications, including a $250 fee, online here.
How Do North Carolina Manufactured Home Dealers Renew Their Licenses?
To renew their licenses, manufactured home dealers, manufacturers, and set-up contractors must create an NCID account by entering their license information online here. Once their account has been set up, licensees can renew their licenses electronically. All North Carolina Manufactured Home Licenses expire on June 30 of each year and must be renewed before the expiration date.
What are the Insurance Requirements for the North Carolina Manufactured Home License?
North Carolina does not require manufactured home dealers, manufacturers, or set-up contractors to purchase any form of liability insurance before receiving a business license. Dealers, manufacturers, and set-up contractors must purchase and maintain a surety bond (limits outlined above).
How Do North Carolina Manufactured Home Dealers File Their Bonds?
Dealers, manufacturers, and set-up contractors should mail their completed bond forms, including the power of attorney, to the following address:
Office of State Fire Marshal
Manufactured Building Division
1202 Mail Service Center
Raleigh, NC 27699-1202
The surety bond requires signatures from the surety company that issues the bond, the applicant, and a notary verifying the applicant’s signature. The surety company should include the following information on the bond form:
- Legal name and address of the entity/individual(s) buying the bond
- Surety company’s name, address, and state of incorporation
- Bond amount
- Date the bond goes into effect
- Date the bond is signed
What Can North Carolina Manufactured Housing Dealers do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, manufactured housing dealers, manufacturers, and set-up contractors in North Carolina must follow all licensing regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Do not breach any contracts made with consumers
What Other Insurance Products Can Agents Offer North Carolina Manufactured Housing Dealers?
Although not required to, most reputable manufactured housing dealers, manufacturers, and set-up contractors will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for North Carolina Manufactured Housing Dealer Customers?
North Carolina conveniently provides a public database of active manufactured housing dealers, manufacturers, and set-up contractors in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.