Archive for February, 2014

California Car Wash Bond Now Required

Written by JoAnn Smith on February 26th, 2014. Posted in Commercial Bonds, License and Permit Bonds, Retail and Professional Services Bonds

     california car wash bond
New regulations for California car washes
Does your local car wash company know about the new regulations regarding a California car wash bond? Owners of car washes in California have been required to post a surety bond if their business is a non-union car wash since 2004. The difference is that the amount of that surety license bond has been increased in an industry largely made up of smaller mom-and-pop companies.  In California, home to a vast car culture that certainly needs to be cleaned regularly, car washes are everywhere and have been largely non-union. This means that the majority of car wash owners will need to make sure they have the correct license bond for their car wash company before they renew their license.

An Unexpected License Bond Increase

In the past the requirement for a California car wash bond was $15,000 as part of their license for the business. That changed this past October when California legislature passed a bill to increase the license bond amount to $150,000. The law for this change went into effect January 1, 2014. This new bond requirement is part of a movement in California to protect car wash workers from unscrupulous employers.

Worker Protection with Car Wash Surety Bonds

In 2004 a car wash worker law was passed that created a general fund for workers found to be underpaid or otherwise exploited by their employers. The funding for this came from the surety bond amounts paid by companies at the time of licensing. This is why car wash companies in California that have union representation are not required to pay into the fund via this license surety bond. Although most owners were aware that the current law would “sunset” at the end of 2013, an increase in the amount of the surety bond was unexpected. Language in the bill suggests that the increase was to help cover costs already incurred by draws on the fund.

Finding Your Car Wash Bond Fast

While the new law will obviously not affect those thousands of car wash owners who operate under the radar, legitimate car wash companies as well as anyone running a car detailing company will need to qualify for the new $150,000 surety bond. For many small companies this could prove difficult. Luckily for them BuySurety has been insuring a broad range of companies, both large and small, for over two decades now. We can help you to qualify for your California car wash bond. Why not come by the BuySurety site and talk to one of our knowledgeable and helpful customer service people today? Get your car wash surety bond in place now and make sure your company stays legal and in business with a surety bond from BuySurety.

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Fidelity Bonds for Maryland Common Ownership Community Managers

Written by JoAnn Smith on February 25th, 2014. Posted in Bond Types, Latest News, License and Permit Bonds, Maryland, Surety Bond Blog

     common ownership fidelity bonds      
Common ownership fidelity bonds make happy homes
As the definition of a family unit changes and the price of a single family home skyrockets out of reach of many Americans, common ownership communities are becoming more accepted. While some forms of community ownership are widespread, such as with Home Owner Associations or HOAs, others such as co-operative housing or residential condo associations are just getting traction. Governing these often fractious groups can be a difficult and thankless job.
 
It isn’t surprising to find out that the governing bodies for large communities are being taken on by professional organizations. In many states there has been a movement to create an office that can help self-governed common ownership communities with information and assistance, as well as to help regulate professional organizations that take these tasks on. In Maryland, up until now, this has been handled by each individual county.

Moving Responsibility to the State of Maryland

With the current consideration of Maryland House Bill 10, the state of Maryland is drafting a bill that moves responsibility from individual counties to the state for regulation of common ownership community managers. This will allow the state of Maryland to create a State Board of Common Ownership Community Managers that would be governed by the Maryland Department of Labor, Licensing and Regulation. With the creation of this state board, anyone who wishes to offer their services to a common ownership community as a manager would need to be licensed and bonded by the board.

Fidelity Bond to Protect Communities

If passed, House Bill 10 would require anyone who offers managerial services of this kind to be bonded against theft. This is because the position would include handling organization fees and the reserve for the common ownership community. The fidelity bond would be either $2 million or the highest aggregate amount of the operating and reserve balances for all of the common ownership communities under contract in the prior three months, whichever is less. The bond would cover the licensee, the manager and any employees or contractors that worked for the managerial company.

Finding the Right Fidelity Bond

With more states looking at the emergence of common housing, management companies to help these organizations will probably continue to spring into existence. This also means that many states will begin to look at ways to regulate these common housing management companies to ensure that the co-owners money is handled properly. This is where a fidelity bond as a requirement for licensing will probably come into play in more states. If you are considering a common housing situation, you might want to see if the management for it has a fidelity bond in place. For anyone who wants to move into the common housing management field, making sure you are bondable for a fidelity bond would be a smart first step. At BuySurety we have been providing fidelity bonds since 1998 to a variety of organizations in a wide number of states. Why not talk to our knowledgeable and friendly customer service representatives today and find out just how easy it is to get bonded with BuySurety.

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Thinking of Running for Office? Get Qualified for Public Official Bonds First.

Written by JoAnn Smith on February 21st, 2014. Posted in Latest News, License and Permit Bonds, Retail and Professional Services Bonds, Surety Bond Blog, Texas

     public official bond      
A public official bond can often be a part of running for office.
When it comes to holding a public office, one of the initial qualifications for many positions is taking out a public official bond as part of that office. But what if you have something in your past that will prevent you from meeting that surety bond requirement? Can you even take office then? This is the kind of question that anyone considering running for office needs to consider, and that even includes the office of County Clerk.
 
This information came home for veterinarian Tiffany Olsen Pearson lately when she made the decision to run against incumbent Renee Calhoun for Randall County Clerk in Texas. It didn’t matter that the problem was in dispute, that it existed at all could be grounds for Olsen to not be bondable, according to several experts in the matter. That could be a big obstacle to taking office should she get elected.

Don’t Mess with the IRS

It probably doesn’t help her situation any that the reason she may be considered ineligible for public official surety bonds is that she is in the midst of an ongoing dispute with the IRS over a tax lien. There is a tax lien against Pearson and her husband regarding a 2009 return. The government organization claims she owes them a little over $20,000 in back taxes along with the penalties and interest charged for the unpaid taxes. Some of this has been paid down but the couple is currently in dispute with the IRS over the remainder. It is this final amount that may in the end be her undoing if she cannot find a surety company willing to cover her surety bond with the lien still intact. The chances for that don’t look good right now.

Public Official Bonds Protect Taxpayers

This situation is a good example of why public official surety bonds are so important when it comes to anyone in public office. The intention is to protect the taxpayers should someone in office fail to comply with the regulations pertaining to their office. As a County Clerk, whoever gains the office would be recording deeds and birth certificates which entail handling money. To do so in the public trust means they must be “bondable”, able to get bonded for a public official surety bond. But with the current lien by the IRS against Ms. Pearson, that is in doubt.

Know if You Are Bondable

Do you know if you are bondable right now? While the case above is one where the person running for office should probably have checked first, we don’t always know ahead of time when a surety bond might be part of a job or situation. Contractors in the construction industry use bonds to bid on government projects, ensure they can fulfill the project and even guarantee that their subcontractors will be paid. Car Dealers must be bonded to ensure the public that what they say they are selling is true. Some folks still call these kinds of bonds “lemon law bonds”.
 
Many types of business licenses require a license bond as part of the licensing process to ensure that the business follows the regulations of that industry. Whatever kind of business you are in, you may need a surety bond at some time to do it. Are you bondable? BuySurety has been providing a wide array of surety bonds to both individuals and businesses since 1998. Find out just how easy it is to get bonded when you discuss surety bonds with our knowledgeable and helpful customer service representatives today. Whether you need a public official bond to run for office or a performance bond to take on that construction job, we have the right bond for you.

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Do You Know Your Professions License Bond Requirements?

Written by JoAnn Smith on February 11th, 2014. Posted in Bond Types, Commercial Bonds, Florida, Kentucky, Latest News, Legislation, License and Permit Bonds, Michigan, Surety Bond Blog, Wisconsin

     license bond requirement      
Know your license bond requirement for your industry.
Whether you are a tradesman, a salesman or a sub-contractor in the building industry, understanding the license bond requirements for your industry can be a crucial part of any job. Almost any kind of business that involves providing a service or handling money probably also requires a surety bond of some kind. Usually this will take the form of a surety bond that is part of the licensing process for the business or trade. But the laws regarding exactly what that license bond requirement will cover and if it is even necessary can change. Keeping up with the shifting legal requirements for a license bond in your business can be difficult. While by no means an exhaustive list, here are some changes that have gone through legislation recently that will affect the license bond requirements in several industries and states.

Florida Title Insurance Agents

In the past, agents have been required to post either a license and permit surety bond or some other type of security to cover any losses incurred if an agent should violate their contract. This bond or surety of at least $35,000 was posted by the agent, not the agency. But a law was passed in 2012 that required the agency to also post a bond for this type of situation to benefit the appointed insurer. Now Florida House Bill 321 and Florida Senate Bill 570 will change this. It will eliminate the individual agent requirement, so that only the agency will be required to carry a license bond of at least $35,000 to cover any violations of the contracts regarding title insurance.

Kentucky Electrical Inspectors

As the law now stands, all electrical inspectors in Kentucky must post a $5,000 surety bond as part of their license. However, with the passage of Kentucky House Bill 38 introduced to legislature in January of 2014, certain Kentucky electrical inspectors would become exempt from this requirement. The exemptions to the need for a surety bond would include employees of the following:
  • City
  • County
  • Urban-county
  • Charter County
  • Unified local government
  • Consolidated local government
  • Any combination of governing entities
This exemption is only for work that has been authorized by the Department of Housing, Buildings and Construction for the administration and enforcement of its regulations. It should be noted that contractors, when hired by these organizations, will continue to be required to produce the license surety bond. This change for employees acting in this capacity will be effective upon the passage of HB38.

Wisconsin Mortgage Professionals

Currently in Wisconsin, individual mortgage professionals must have a license bond that does not exceed a value of $50,000 as a part of their licensing requirements. It is mandatory in order to make supervised loans and to act as a mortgage loan originator. But with the passage of Wisconsin House Bill 678 each individual branch location of a mortgage company will also have its own $50,000 license bond requirements in addition to the license surety bond for individuals.

Michigan Alarm System Contractors

If you work in the state of Michigan as a contractor that installs alarm systems, then you probably already know that this state requires all alarm system contractors to post a license bond in the amount of $25,000 as part of your licensing requirement. Currently that license bond requirement includes taking out this bond “in the name of the people of the State.” This will be changed with the passage of Michigan Senate Bill 619 to reflect that the surety bond is payable to the Department of Licensing and Regulatory Affairs for the benefit of the people of the state. The amount of the bond requirement will not change.

Knowing Your License Bond Requirement Needs

While most of us like to think we know all the requirements for licensing in our chosen profession, it can be hard to stay on top of all the legislative changes. Surety bond amounts can change or not even be required at all, which may mean you are spending more money than you need to in order to meet regulations. Worst yet, you could be facing charges and fines if you don’t have a license surety bond when you should. Know what you need and when you need it by contacting our knowledgeable and helpful customer service at BuySurety today. Find out what changes in legislature have made your license more expensive or even more complicated. We have been helping out businesses large and small find out what kind of surety bond requirements their business needs to fulfill since 1998 and we can help you. Don’t take chances with your legal standing, find out what type of surety bond you need and make sure it is current by contacting BuySurety today.

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Five Popular Surety Bonds Misconceptions

Written by JoAnn Smith on February 7th, 2014. Posted in Contract Bonds, Performance Bonds, Surety Bond Blog

     surety bond misconceptions
Understand myths and surety bond misconceptions
Although surety bonds have certainly become a part of many industries, there are still plenty of surety bond misconceptions floating around today. Some of these may have come from hearsay within an industry or stories about surety bonds. It is odd how even the wildest story can be taken at face value if the end result is something that the storyteller wishes had happened. These kinds of rumors don’t help anyone to run a good business. The bottom line is that they can prevent a company from knowing the best way to use surety bonds as part of running a business successfully. Whether you are an old pro in the use of surety bonds as part of your business or new to the idea, here are a few of the most well known surety bond misconceptions so you can recognize them when you hear them from others.

Myth #1 – Bid Bonds are Only Good for Government Contractor Jobs

While it is true that bidding on government jobs may indeed usually require a bid bond; bid bonds can also be required on plenty of private construction or contractor jobs. In fact, the smart company will ask that all bids be accompanied by a pledge from a surety bond company assuring the bidder is bondable. What does this mean for your business? For contractors it means you should make sure before bidding on any job that you can meet the requirements for the project. You should be able to reassure that you would qualify for the performance or payment bond before you even bid for the job. For a business that is soliciting bids, requiring this letter from a surety may ensure the winning bid is truly capable of delivering.

Myth #2 – Surety Bond Companies Only Pay Attention When a Company Defaults

If you are running a project and are beginning to wonder if the company you hired can actually fulfill its function, you should be letting their surety bond company know about it. Waiting until the company actually defaults may seem like the only solution, but that is a misconception about surety bonds. In reality, there is more here than the question of the bond. Often when a bonded company is struggling the surety bond company may address the issues with the contractor. This may be enough to help the contractor solve the issues holding up the job. While it is true that the surety bond company cannot step in and take over the project until they have received notice of default, they have a vested interest in making sure everything is done to motivate and guide the contractor to ensure completion.

Myth #3 – If a Contractor Defaults, the Surety Cannot Hire Him Back

When a performance bond is called on a project, the surety company will be required to step into the contractor’s shoes and get the job completed. At that point they have four options:
  • Pay the penalty to the owner
  • Pay the difference on the contract for the replacement the owner hires
  • Take over the project and hire a new contractor
  • Use balance of the contract to pay old contractor and pay outstanding costs from its own pocket
This last option is the one that most people are shocked to see. The reality is there are plenty of circumstances where a surety company may decide the best solution is to bring back the original contractor that defaulted and pay him to complete it. While the owner of the project may not be happy with it, the surety company does have that option with a performance bond once it has been called.

Myth #4 – Post-Completion Obligations Get a Pass in Bonding

A common surety bond misconception is for owners to not realize that beyond simply completing the project, performance bonds also assure that vendors and sub-contractors are paid. If there is not a separate warranty bond, then warranties are also covered by a performance bond. If these obligations have not been met then the owner is within their rights to declare a default on the performance bond. This will mean that the surety is compelled to fulfill them as part of the terms of the performance bond.

Myth #5 – Making a Claim is Your Only Recourse

While it is true that you need to follow the correct procedures for making a claim on a surety bond when the contractor has defaulted, it is not your only way to be compensated. The first obligation is to follow precisely the requirements for making the claim against the surety, with a certified letter that used the proper language to cite the specific terms of the bond that have been violated. If that doesn’t get you a response you can file suite. However, many states require that his happen quickly, so be sure to check the statute of limitations for your state on action provisions. Also- there could be a limitation on the amount of time that can pass without acting that is associated with the bond. This surety bond limitation takes claim over the state’s statute of limitations, so be sure you know the limitation on the bond action.

Debunking Surety Bond Misconceptions

While the way a surety bond works is not complicated, the details of the individual performance bonds, warranty bonds and other types of completion surety bonds can feel that way. Taking the time to understand the workings of a surety bond is a good first step to debunking surety bond misconceptions. Once you understand the underlying principals, it is easier to use common sense to see where these myths have originated. A surety bond won’t solve the problem of a poorly run company, nor will they guarantee your contractor is golden. But hiring a contractor with a good track record with their surety bond company is a good way to know what kind of a risk they could become, or not. While construction continues to be the industry that sources surety bonds the most widely, anytime you are involved in a business that has risk, handles money or requires the trust of clients you may find a need for a surety bond. Understanding the surety bond misconceptions can help any company make the best use of a surety bond for their business. Got questions about your surety bond needs? Ask our helpful and informative customer service people at BuySurety about your needs and find out just how easy it is to get bonded.

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