Mobile Home Dealer Bond
A Mobile Home Dealer Bond, also known as a manufactured home bond, is a commercial license surety bond. The bond is a class of auto dealer surety bond. Mobile home dealer bonds are sometimes required of businesses or individuals who sell mobile, manufactured homes. The bonds are sometimes required of manufacturers and parts dealers as well. State statutes regarding surety bond requirements vary state to state.
What is a Mobile Home Dealer Bond?
When the bond is required, it is typically used as a form of guarantee that the licensee will operate in accordance with state laws and regulations. If the licensee is found to be in violation of these laws, a claim can be made on the bond up to the penalty amount. States require mobile home dealers to have an active bond as a way to discourage unlawful behavior and hold dealers financially responsible should unlawful behavior ever occur.
How does a Manufactured Home Bond work?
Consider an example in which a manufactured home dealer knowingly sells a faulty mobile home. Those faults eventually lead to expensive problems for the buyer. In this and any other instance where the dealer violates state laws, the buyer may file a claim against the bond seeking financial compensation equivalent to the damages caused by the dealer's behavior. The claimant is guaranteed payment from the company that issues the bond as long as the claim holds up under investigation. When the surety bond company renders payment, the bonded party (the mobile home dealer) must pay that debt back with interest and fees added to the total of the settlement.
Who should get a Manufactured Home Bond?
The majority of states require anyone planning to build, distribute, sell, or service a mobile home to have one of these bonds, but the specific requirements vary widely across states. There are also some states with no surety bond requirement. Do you need a bond? Explore that question with the team at Viking Bond Service - we can find you the right information fast.
Who are the parties involved in a Mobile Home Dealer Bond?
Every surety bond is a three-party agreement:
- Principal - The mobile home dealer must obtain the bond, keep it active for as long as they're in business, and pay for any claims filed by the obligee against the bond.
- Obligee - The party with the right to file claims for damages against the bond if they feel they have been manipulated by a manufactured home dealer.
- Surety - The company that issues the bond to the principal. The surety also pays the obligee for any valid claims, but the principal must pay that debt back.
How much does a Mobile Home Dealer Bond cost?
The penalty amount of the bond will vary state to state. The bond penalty, or bond amount, is the amount the Surety would have to pay if the licensee is found to be in violation of applicable laws and has not paid the required fees for the violations. The bond amount can vary based on the specific type of mobile home dealer bond as well, whether an actual dealer bond or some other parts of the chain, for example the final stage manufacturer. The state government agency administering the licensing process will typically let the licensee know what the actual bond requirement is.
The cost a mobile home dealer or other party will pay for a bond is a small percentage of the total amount usually 1% - 3%. When someone applies for a bond, underwriters at the surety company look at their credit score and financial history to estimate how likely the applicant is to generate claims and take responsibility for those claims. Therefore, applicant's with lower credit scores or blemishes on their financial record will pay more than those with pristine credit. However, thanks to a special program from Viking Bond Service, more people with bad credit get the bond they need at a rate they can afford.
How are claims handled for Manufactured Home Bond?
When an obligee files a claim against a manufactured home surety bond, the first thing the surety does is launch an investigation. Since the surety agrees to settle all valid claims, they must determine whether the details of the claim are valid before turning over payment. After confirming the details of the claim, the surety compensates the obligee. By doing so, the surety has the right to use whatever legal means necessary to collect the amount of the settlement from the party who's ultimately responsible: the mobile home dealer. Since the surety adds interest and fees to the debt, it's always less expensive for the principal to settle claims before the surety has to. It's even less expensive to avoid claims entirely.
How to apply for a Mobile Home Dealer Bond?
Manufactured Home Dealer Bonds are typically easy to process. In most cases, minimal paperwork and documentation is required. Quotes for these bonds are usually obtained the same day or within 24 hours.
Viking Bond Service - A Bonding Partner For Your Business
You will need an active bond for as long as you're in the mobile home business. Make sure you have a great bonding partner with you throughout. Viking Bond Service issues bonds in all 50 states, including every kind of bond relevant to the manufactured home industry. Speak to a bond expert directly at 1-888-278-7389, or send your questions through the contact form on this page. You can also get the bonding process started today and expect a quote within 24 hours - simply complete this online application.
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