Subcontractor Updates – Payment Bonds and Private Projects

Written by JoAnn Smith on August 5th, 2014. Posted in Bond Types, Contract Bonds, Latest News, Payment Bonds, Surety Bond Blog

     payment bonds      
Do you know if your private project has payment bonds attached?
Until the economy took a giant step backwards around 2008, it was rare to see a project require any kind of payment bonds if the project stayed within the private sector. But when the construction industry crashed alongside real estate, you began to see more and more construction projects that were not under the public umbrella come with the requirement for payment bonds or even sometimes performance bonds.
A Payment bond held by an owner or general contractor can impact what a subcontractor’s recourse will be in the case of non-payment. That is why it is always a good idea to find out at the beginning of a project if anyone responsible for the contract has taken out payment bonds or any kind of performance bond on the project. This is true whether a private or public project, but it is important to be aware that even a private construction project can come with payment bond requirements these days.

Payment Bonds on Private Projects

Because the use of payment bonds before the recent economic upheaval was relatively rare for private projects, it is important to understand if a mechanic’s lien or court action can be avoided with this bond. When times are good many project owners and general contractors don’t feel the need for these bonds. Now many projects require them.
Public projects have rules regarding collecting on bonds or civil actions, as set out in The Miller Act. However, when it comes to a private project the terms of the bond will govern. That is why it is important to ask and understand exactly what kind of payment bonds are related to the project and under what conditions they become enforceable. There are a few things you can generally expect, however, including:
  • The bonds will lay out specific notice requirements
  • The notice will most likely be required in the form of writing
  • Written notice will need to go to specific parties outlined in the bond
  • These parties need to receive written notice within a specific timetable
  • All requirements must be fulfilled to act on the bond

Where Contracts Rule

Many states, such as Virginia, specify that the contract supersedes all other agreements. It is vital to know if your state is one of these as that will affect your ability to enforce the bond. When this is the case, the terms of the bond cannot be outweighed by other legal considerations or interests. This is because any surety bond including a payment bond is a contractual obligation. So make sure you have a copy of that surety bond before you start the project.

Getting Bonded Correctly

Of course, it always helps if you have a reliable surety bond company like BuySurety to go to when it comes to payment bonds or clarifying your bond requirements. BuySurety is an experienced surety bond company. We have been providing everything from contractor license bonds to bid bonds and payment bonds since 1998 to a wide variety of businesses. Whether you are a small contractor just starting out or a large national company with wide-ranging projects, we can provide the exact surety bond to suit your needs at a price that is within your budget. Come by the BuySurety site to see just how fast and easy it is to get bonded with BuySurety today.

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Appraisal Management Company Bonds Requirements Change

Written by JoAnn Smith on August 4th, 2014. Posted in Arizona, Commercial Bonds, Latest News, Legislation, License and Permit Bonds, Mississippi, States, Surety Bond Blog, Virginia

     appraisal management company bonds
Appraisal management company bonds see changes
For several states the requirements for real estate appraisal management company bonds are changing, which should be no surprise to anyone in the real estate industry. As the market makes its recovery from the 2008 crash, home prices are going up again. This means that appraisals need to be constantly re-evaluated and the appraisal management company bonds for these businesses are getting re-evaluated by the state legislative committees as well. Three states that saw changes to how the appraisal management company bonds would play into these new realities are Arizona, Mississippi and Virginia. All three have recently made changes to the requirements for real estate appraisal management companies to hold a surety bond as part of the cost of doing business.

Arizona Changes their License Bond

In Arizona a company that does business as an appraiser of real estate may not be required to have appraisal management company bonds, but they are required to be licensed and carry a license bond as part of that license. Until the passage of Arizona House Bill 2239 that requirement was a $20,000 license bond. With the passage of this bill on April 16, 2014 and the Governor signing it into law on April 22nd the requirement for a license bond for this type of business was changed to not less than $20,000 with a maximum surety bond amount of $50,000. In addition, instead of a criminal background check being required for licensing, owners will now only need to submit a valid fingerprint clearance card.

Mississippi and Appraisal Management Company Bonds

Mississippi’s House attempted to pass a change to the appraisal management company bonds requirements along with a change to authorize Mississippi real estate appraisers to establish standards for measuring certain residential properties. While the change regarding standards was written into law, the surety bond requirement for all real estate appraisal companies in Mississippi still stands. The final version of the new law did not see any changes in the requirements of posting a surety bond as part of the licensing structure.

Changes for Virginia Real Estate Appraisal Companies

With the passage of Virginia House Bill 762, both real estate appraisers and real estate appraisal companies will be required by law to hold a license and a real estate appraisal management bond or license bond, whichever is applicable. With this law no one who engages in the business of real estate appraisal can do so in Virginia without a license that is issued by the Real Estate Appraisal Board. In addition, the amount of the real estate appraisal license bond will be increased from $25,000 to $100,000. The bill was signed by the Governor on March 07, 2014 and went into effect on July 01, 2014.

Licensing Needs Met Here

Obviously many different kinds of businesses need many different kinds of licenses. Just as you see here where three different states have different requirements about surety bonds that go with those licenses, it is the same with a host of different types of businesses. That is why it is always a good idea to check in with a reputable surety bond broker, such as BuySurety, to be sure your business has the license bonds it needs to stay on the right side of the law. Not sure what your state requires of your new business? Contact BuySurety’s customer service and find out today. Keeping your business legal and bonded correctly is just one part of why businesses big and small across the nation have counted on BuySurety since 1998. Contact us today to find out just how fast and easy getting bonded with BuySurety can be for you.

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Changes for West Virginia Notaries Includes License Bonds

Written by JoAnn Smith on July 28th, 2014. Posted in Bond Types, Latest News, License and Permit Bonds, Surety Bond Blog, West Virginia

     license bond      
Notaries will now need a license bond in West Virginia
If you have a business in West Virginia that includes offering the services of a notary, you may want to pay attention to a new law recently passed. The bill, West Virginia Senate Bill 04 will change a few of the requirements for anyone acting as a notary in West Virginia beginning July 01, 2014. These changes will include the requirement of a surety license bond as well as several other new requirements. Changes will affect everyone in West Virginia who has a notary license regardless of where they do business in West Virginia.

Uniform Law on Notarian Acts

Although the name of the law may sound peculiar, there is no question that it is indeed enforceable and will be implemented across the state. Before this bill there had not been a requirement for a notary in West Virginia to have a license bond, which pledges the notary to act within legal and ethical boundaries in the course of their job. It also binds them to the Code of West Virginia, as set by legislature. In addition, the new bill will enact the following:
  • Notary commission is reduced from ten years to five years
  • Notaries can now charge $5 per notary act instead of the prior $2
  • Notaries can now notarize electronically, called e-notarization
For more information on the requirements of a notary license and how to obtain a license bond, be sure to contact BuySurety. We have been supplying surety bonds, including required license bonds, to a variety of businesses and professions across the nation for over a decade. Find out just how fast and easy it is to get your license bond or any other surety bond you need from BuySurety today.

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New Surety Bond Requirements for Connecticut Mortgage Servicers

Written by JoAnn Smith on July 21st, 2014. Posted in Bond Types, Connecticut, Indemnity Bonds, Latest News, License and Permit Bonds, Performance Bonds, Surety Bond Blog

     new surety bond requirements.      
Connecticut mortgage service companies have new surety bond requirements
Connecticut mortgage servicing companies will be seeing new surety bond requirements starting in the new year with the passage of Connecticut House Bill 5353. The bill, which moved quickly through the House for passage will amongst several other things redefine anyone acting as a mortgage service company to now be a mortgage service provider that is required to be licensed from the banking commissioner. In addition, each main branch must now have its own license, as well as each individual branch office where the mortgage servicer does business. New surety bond requirements will be part of these new licensing requirements.

New Surety Bond Requirements

Along with the new requirements for all locations where a mortgage service provider does business to be licensed separately, each location will also need to post a surety bond of $100,000. In addition, the bank commissioner may choose to decide if the financial standing of the mortgage servicer will necessitate additional performance surety bond requirements beyond the $100,000 bond. The performance bond will ensure that the mortgage servicer performs their business in an honest manner and has trustworthy accounting practices. It will also ensure that the business conforms to all applicable laws pertaining to the business of mortgage servicing. While the licensing changes will go into effect on January 1, 2015, the changes in the requirements for surety bonds will be law as of November 1, 2014. These new surety bond requirements are in addition to the already mandatory fidelity bonds and errors and omissions bonds that all financial service businesses including mortgage service companies are required to have.

Get Bonded for Your Business Quickly

As you can see, changes in a business requirement can move quickly. In this case the Connecticut bill was introduced in February of 2014 and became law by June 3rd. This is a good example of why it is so important for every business to be up to date on the surety bond regulations for their industry. When requirements change quickly you want to be ready, and BuySurety can get you there. We know all the latest legislative changes, can put together the surety bond requirements you need quickly and get you bonded to stay legal fast. Bonding businesses since 1989, BuySurety can be there for you when you need to fulfill that new surety bond requirement. Visit our website or call our customer service reps and find out just how easy it is to keep your business up to date with all the state and federal surety bond requirements.

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Florida Pot Growers Will Need Performance Bond

Written by JoAnn Smith on July 16th, 2014. Posted in Bond Types, Contract Bonds, Florida, Latest News, Performance Bonds, Surety Bond Blog

     Florida pot growers will need a performance bond.      
Florida pot growers will need performance bonds.
For potential Florida pot growers, the word is out that a $5 million performance bond may be part of the deal to get into the lucrative market, according to a workshop recently held by the Florida health regulators. With Florida joining the growing number of states that are legalizing medicinal marijuana, many will be watching how the Florida approach works and what flaws appear in the system.
That $5 million performance bond is just one element to keep only serious investors in the game. In addition, the state has made a few other requirements that will also keep outsiders intent on jumping on the medical pot bandwagon at bay and reward established local businesses that want to invest in what may prove to be the best cash crop they have seen in years. But the question remains, will it prove worth the risk?

Performance Bond Reduces Risk

It is easy to see why the Florida state department wants to put some limitations on exactly who will be able to get in on the ground floor. With an eye on the sales in Washington and Colorado, many expect the medical pot ruling to be just the start of a new and fairly lucrative venture. But Florida has made some smart limitations on just who they will allow to be part of the new medical marijuana market. Initially only five companies, picked via a lottery system, will be involved. All five companies will need to fulfill certain requirements.
  • Only nurseries that have been in business in Florida for a minimum of 30 years and have at least 400,000 plants are eligible for the lottery.
  • Upon being awarded the license, the company will need to come up with a $150,000 investment within 30 days of licensing.
  • This is in addition to the cost of investing in growing facilities, dispensaries and the lab for testing the product.
  • In addition, the company will need to qualify for and obtain a $5 million performance bond.
  • Growers will not see the license form ahead of time and have only 10 days from when they get their hands on it to fill it out and turn it in.

Investors and Growers Have Questions

Naturally with these kinds of specifications, many growers are considering the possibility of partnering with an investment group. At the recent workshop investors were acknowledged but it was not made clear if the business would need to be in the investors name or the name of the nursery owner. Many companies are already reporting a large amount of calls from “experienced expert growers” looking for positions. Of course, another consideration for many growers is that even if they have the facilities to grow marijuana, they would need to install additional security if they should win the lottery. That $5 million performance bond will certainly help cover unexpected problems should the security not prove sufficient, but no one wants to even discuss that possibility.

Get Bonded Quickly and Easily

As this one instance points out, you never can tell when you will need to have the ability to get bonded quickly. You don’t have to be a Florida pot grower to understand the need to qualify quickly for any kind of surety bond whether it is a performance bond for a nursery or an auto dealer bond for a car dealership. No matter what kind of business you do, no matter what kind of surety bond you need, BuySurety can get you bonded quickly and within your business budget. We have been providing surety bonds to a wide range of businesses across the nation since 1998. Why take chances? Get bonded with BuySurety and be sure.

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