Maine Residential Real Estate Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Maine Residential Real Estate Bonds
At a Glance:
- Lowest Cost: $150 per year or $15 per month based on the applicant’s credit
- Bond Amount: $15,000
- Who Needs it: All Residential Real Estate Property Preservation (RPP) Services Providers operating in Maine
- Purpose: To ensure the public will receive compensation for any damages should the RPP services provider fail to comply with licensing law
- Who Regulates Residential Real Estate Property Preservation Services Providers in Maine: The Maine Bureau of Consumer Credit Protection
Background
Maine statute 11031 requires all RPP services providers operating in the state to obtain a license with the Bureau of Consumer Protection. The Maine legislature enacted the licensing laws and regulations to ensure that RPP services providers engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, RPP services providers must purchase and maintain a $15,000 surety bond to be eligible for licensure.
What is the Purpose of the Maine Residential Real Estate Bond?
Maine requires RPP services providers 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 RPP services provider fails to comply with the licensing regulations set forth in Maine statutes 11001 – 11054. Specifically, the bond protects the public in the event the RPP services provider engages in any acts of fraud or misrepresentation. In short, the bond is a type of insurance that protects the public if the RPP services provider breaks licensing laws.
How Can an Insurance Agent Obtain a Maine Residential Real Estate Bond?
BondExchange makes obtaining a Maine Residential Real Estate Bond easy. Simply login to your account and use our keyword search to find the “residential” 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.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Maine Residential Real Estate Bond?
Surety companies will run a credit check on the owner’s of the RPP services company to determine eligibility and pricing for the Maine Residential Real Estate bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners 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 owner’s credit.
How Much Does the Maine Residential Real Estate Bond Cost?
The Maine Residential Real Estate bond can cost anywhere between $150 to $1,125 per year or $15 to $113 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $15,000 bond requirement
$15,000 Residential Real Estate Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 800+ | $150 | $15 |
| 625 – 799 | $225 | $23 |
| 575 – 624 | $563 | $57 |
| 550 – 574 | $750 | $75 |
| 500 – 549 | $1,125 | $113 |
*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.
How Does Maine Define “Residential Real Estate Property Preservation Services Provider?”
Maine statute 11002 defines a residential real estate property preservation services provider as any individual or business entity who enters into, or arranges for the entry into, a residential property that is abandoned or in default for the purposes of winterizing the residence, changing the door locks, or removing unsecured items.
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 RPP Services Providers Apply for a License in Maine?
RPP services providers in Maine must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the application form for details on the process.
License Period – The Main Residential Real Estate Property Preservation Services Provider License expires on July 31 of even numbered years and must be renewed before the expiration date
Step 1 – Meet the Net Worth Requirements
Applicants for the Maine Residential Real Estate Property Preservation Services Provider License must have a company net worth (assets – liabilities) of at least $10,000. Applicants must submit a reviewed financial statement, prepared by a CPA, verifying their net worth when submitting their license application.
Step 2 – Purchase a Surety Bond
RPP services providers must purchase and maintain a $15,000 surety bond
Step 3 – Hire a Qualifying Individual
RPP services providers must employ a qualifying individual with the necessary experience and competencies to run the day to day operations of the RPP services business. Applicants must submit proof of work experience for the qualifying individual with their license application.
Step 4 – Complete the Application
All regulatory Maine RPP Services Provider License applications must be mailed to the following address:
State of Maine
Bureau of Consumer Protection
35 State House Station
Augusta, ME 04333-0035
RPP services providers must complete the application in its entirety, and submit the following items:
-
- Reviewed financial statements indicating a company net worth of at least $10,000
- Proof of experience for the qualifying individual
- Company formation documents
- The following document samples:
- Notices attached to property
- Inventory list
- Report of property inspection
- Report to lender/servicer describing the services provided
- Contract used with clients
RPP Services Providers must pay a $600 license fee when submitting their license application. The fee is only $300 if there fewer than 9 months remaining until the next renewal date
How Do Maine RPP Services Providers Renew Their License?
RPP services providers in Maine should mail their completed renewal application, including the $600 renewal fee, to the following address:
State of Maine
Bureau of Consumer Protection
35 State House Station
Augusta, ME 04333-0035
The Main Residential Real Estate Property Preservation Services Provider License expires on July 31 of even numbered years and must be renewed before the expiration date
What Are the Insurance Requirements for the Maine RPP Services Provider License?
Maine does not require RPP Services Providers to purchase any form of liability insurance as a prerequisite to obtaining a business license. RPP services providers must purchase and maintain a $15,000 surety bond.
How Do Maine RPP Services Providers File Their Bond?
RPP services providers should mail the completed bond form, including the power of attorney, to the following address:
State of Maine
Bureau of Consumer Protection
35 State House Station
Augusta, ME 04333-0035
The Maine Residential Real Estate surety bond requires signatures from both the surety company that issues the bond and a representative from the RPP services company. The surety company should include the following information on the bond form:
- Legal name and address of entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Date the bond is signed and goes into effect
What Can Maine RPP Services Providers Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, RPP Services Providers in Maine must follow all license 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
- Honor all contractual obligations with clients
What Other Insurance Products Can Agents Offer RPP Services Providers in Maine?
Maine does not require RPP services providers to purchase any form of liability insurance as a prerequisite to obtaining a license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability 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 Maine RPP Services Provider Customers?
Maine conveniently provides a public database to search for active RPP services providers in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.