North Carolina Appraisal Management Company Bond: A Comprehensive Guide

April 8, 2021

North Carolina Appraisal Management Company Bond

This guide provides information for insurance agents to help their customers obtain a North Carolina Appraisal Management Company bond.

At a Glance:

  • Average Cost: $250 per year
  • Bond Amount: $25,000
  • Who Needs it: All appraisal management companies operating in North Carolina
  • Purpose: To ensure the public will receive compensation for any damages should the appraisal management company violate registration law
  • Who Regulates Appraisal Management Companies in North Carolina: The North Carolina Appraisal Board

Background

North Carolina Statute 93E-2-1 requires all appraisal management companies operating in the state to register with the Appraisal Board. The North Carolina legislature enacted the registration requirement to ensure that appraisal management companies engage in ethical business practices. To provide financial security for the enforcement of the registration law, appraisal management companies must purchase and maintain a $25,000 surety bond to be eligible for registration.

What is the Purpose of the North Carolina Appraisal Management Company Bond?

North Carolina requires appraisal management companies to purchase a surety bond as part of the application process to obtain a business registration. The bond ensures that the public will receive compensation for financial harm if the company fails to comply with the regulations set forth in North Carolina Statute 93E-2-4. Specifically, the bond protects appraisers in the event the company fails them for any work performed. In short, the bond is a type of insurance that protects the appraisers if the appraisal management company does not pay them.

North Carolina Appraisal Management Company Bond Form

North Carolina Appraisal Management Company Bond Form

How Can an Insurance Agent Obtain a North Carolina Appraisal Management Company Surety Bond?

BondExchange makes obtaining a North Carolina Appraisal Management Company bond easy. Simply login to your account and use our keyword search to find the “appraisal” bond in our database. Don’t have a login? Enroll 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.

Not an agent? Then let us pair you with one!

BX Agent Finder Link

Click the above image to find a BX Agent near you

Is a Credit Check Required for the North Carolina Appraisal Management Company Bond?

No, a credit check is not required for the North Carolina Appraisal Management Company bond. Because the bond is considered relatively low risk, the same low rate is offered to all appraisal management companies operating in the state, regardless of their credit history.

How Much Does the North Carolina Appraisal Management Company Bond Cost?

The North Carolina Appraisal Management Company bond costs just $250 per year.

Who is Required to Purchase the Bond?

North Carolina requires appraisal management companies to purchase a $25,000 surety bond as a prerequisite to obtaining a business registration. To paraphrase North Carolina Statute 93E-2-2, an appraisal management company is a business entity that performs one or the following functions:

  • Administers an appraisal panel
  • Recruits appraisers to join to the appraisal panel
  • Negotiates fees and performance expectations with members of the appraisal panel
  • Delivers appraisal orders to members of the appraisal panel
  • Determines the status of orders of appraisal
  • Reviews completed appraisals and ensures they meet all quality standards
  • Provides completed appraisals to clients

Exemptions to this definition include:

  • Government agencies
  • Appraisers who provide appraisals for another appraiser when both parties sign the appraisal report
  • State or federally chartered banks, farm credit systems, savings institutions, and credit unions and their officers/employees
  • Licensed real estate brokers
  • Licensed attorneys
  • Appraisal management companies that are subsidiaries of federally regulated financial institutions

How do North Carolina Appraisal Management Companies Apply for a Registration?

Appraisal management companies in North Carolina must navigate several steps to secure a business registration. Below are the general guidelines, but applicants should refer to the application instructions for details on the process.

Registration Period – All North Carolina Appraisal Management Company Registrations expire on June 30 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Appraisal management companies must purchase and maintain a $25,000 surety bond

Step 2 – Complete the Application

All North Carolina Appraisal Management Company registration applications should be mailed to the following address:

North Carolina Appraisal Board
5830 Six Forks Road
Raleigh, NC 27609 919-870-4854

Appraisal management companies must complete the application in its entirety and submit the following items:

    • $3,500 application fee
    • Procedures used to verify that members of the appraiser panel are licensed and in good standing
    • Procedures used to require appraisers to inform the company of their areas of geographic competency, the types of properties they are able to appraise, and the methodologies the appraiser can perform
    • Procedures used to ensure that the work conducted by independent appraisers representing the company are conducted in accordance with the Uniform Standards of Professional Appraisal Practice
    • Copy of the company’s dispute resolution procedure
    • Irrevocable consent to service of process (if the company is domiciled outside of North Carolina)
    • Names, addresses, and contact information of all company owners with a 10% stake or higher
    • Criminal background checks for each company owner listed above
    • Company formation documents
    • Certificate of Authority (LLCs only)

How do North Carolina Appraisal Management Companies Renew Their Registrations?

Appraisal management companies can renew their registrations online here. All North Carolina Appraisal Management Company Registrations expire on June 30 of each year and must be renewed before the expiration date.

What are the Insurance Requirements for Appraisal Management Companies in North Carolina?

North Carolina does not require appraisal management companies to purchase any form of liability insurance as a prerequisite to obtaining a business registration. Appraisal management companies must purchase and maintain a $25,000 surety bond.

How Do North Carolina Appraisal Management Companies File Their Bonds?

Appraisal management companies should mail their completed bond forms, including the power of attorney, to the following address:

North Carolina Appraisal Board
5830 Six Forks Road
Raleigh, NC 27609 919-870-4854

The surety bond requires signatures from both the surety company that issues the bond and a representative of the appraisal management company. The surety company should include the following information on the bond form:

  • Legal name, address, and phone number of the entity/individual(s) buying the bond
  • Surety company’s name, address, and phone number
  • Date the bond goes into effect

What Can North Carolina Appraisal Management Companies do to Avoid Claims Against Their Bonds?

To avoid claims against their bonds, appraisal management companies in North Carolina must follow all registration 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
  • Pay all funds owed to appraisers

What Other Insurance Products Can Agents Offer Appraisal Management Companies in North Carolina?

North Carolina does not require appraisal management companies to purchase any form of liability insurance as a prerequisite to obtaining a business registration. However, most reputable businesses will purchase this insurance anyway. 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 Appraisal Management Company Customers?

North Carolina conveniently provides a public database of active appraisal management companies in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-08-19T14:34:37-04:00