Learn more about mobile home dealer bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
What Are Mobile Home Dealer Bonds?
Many states require mobile home dealers to purchase a surety bond as a condition for being granted a license to sell new or used mobile homes. Therefore, mobile home dealer bonds are considered to be a type of license and permit bond. In essence, these are a specialized type of auto dealer bond. In some states, a bond is also are required for sellers of manufactured homes that are constructed onsite.
These bonds protect the state and consumers from financial loss due to the unlawful or negligent actions of mobile home dealers. In buying a bond, a dealer is pledging to operate in compliance with all applicable laws and regulations, including those regarding the payment of taxes to the state, or pay the price.
Who Needs Them?
In most states, the requirement to purchase a mobile home dealer bond applies to sellers of both new and used mobile homes.
How Do They Work?
Dealers who violate the terms of their bond by committing an infraction of state laws or ethical standards may have a claim filed against them if they fail to pay the fines or penalties assessed by the state for the infraction.
For example, the state can make a claim on the bond if a dealer is fined for failing to remit sales taxes collected from customers. A consumer who suffered a financial loss due to fraudulent misrepresentations may also have grounds for filling a claim against the bond.
The surety company will investigate to ensure a claim’s validity before paying the claimant. The dealer is then legally obligated to reimburse the surety company for the amount paid out on the claim.
What Do They Cost?
Each state sets its own required amount for this type of bond. Depending on the state, the required bond amount can be as little as $5,000 or as much as $50,000.
The premium you will pay is calculated as a percentage of that bond amount. The surety company establishes the premium rate that each applicant will pay based on an assessment of your credit, assets, and personal and business financial statements.
Applicants with good credit typically pay a standard market rate of between 1% and 3% of the bond total. Those with poor credit may pay anywhere from 4% to 15% of the bond amount.
Regardless of what state you’re located in, we’re here to help you obtain the mobile home dealer bond you need in order to meet licensing requirements. Use our convenient online system to apply today.
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Kevin McElroy, Performance One Electrical Services, Inc.