North Carolina Manufactured Housing Dealer Bond
The North Carolina Manufactured Building Division (MBD) requires licensed manufactured housing dealers to hold a surety bond for $35,000, and $25,000 for each additional business location. The bond is a financial guarantee from Jet Insurance Company that protects home buyers from financial loss resulting from actions of the dealer that include: alterations, modifications, setup, or transportation resulting in substantial defect, or failure to provide and uphold a warranty.
Jet believes in streamlining the bonding process by removing the middleman who charges commissions and bogs down the application process. With Jet, you get your bond at the lowest price with none of the red tape that slows you down!
How Much Is A Manufactured Housing Dealer Bond?
With Jet, the $35,000 Manufactured Housing Dealer Bond starts at $263 annually or $26 a month. Bond rates are based on personal credit, experience, the bond term length and the number of additional business locations.
The bond limit varies because the board requires an additional $25,000 on top of the base $35,000 bond limit for each additional business location for the dealership. For significantly higher bond limits we may require additional business or personal financial information.
The bond has a common expiration date of June 30th. For bonds purchased prior to that date we will prorate the bond amount accordingly.
Below are examples premium bond rates at different required bond amounts:
| Bond Limit | Monthly | Annual |
|---|---|---|
| $35,000 | $26 | $263 |
| $60,000 | $45 | $450 |
| $85,000 | $64 | $638 |
At Jet, we offer low monthly rates with no down payment, making the bond affordable regardless of credit. Traditional insurance companies have financing options with high down payments and high percentage APR’s significantly increasing the total cost of the bond.
How Is the Manufactured Housing Dealer Bond Filed?
Jet files the original bond on your behalf to the NC Department of Insurance, Office of State Fire Marshal, North Carolina Manufactured Housing Board. A copy of the bond and receipt will be sent to you immediately after purchase for your records.
North Carolina Manufactured Housing Board
1202 Mail Service Center
Raleigh, NC 27699
The NCBEEC requires that everything in the license application is filed together to alleviate confusion and mishandling.
Can I Cancel My Manufactured Housing Dealer Bond?
Yes, you can easily cancel the bond with Jet! Send us a request in writing and we will promptly process cancellation of your bond. The bond has a 60-day cancellation provision, meaning it will cancel 60 days after Jet sends the cancellation notice to the Manufactured Building Division. Bond premium returns take into account the cancellation period where the bond is still active as Jet is still providing coverage during that time.
How Can I Avoid A Claim On My Manufactured Housing Dealer Bond?
Bond claims are a result of a financial loss to the buyer from a dealer's infraction of the North Carolina General Statutes. To avoid bond claims a dealer must understand and follow the regulations set by North Carolina Manufactured Housing Board:
- Follow rules on alterations or modifications per General Statute 143-143.19:
- Only making alterations authorized by law or the manufacturer
- Work must be performed by a qualified person
- Provide a warranty as described under General Statute 143-143.16 that affirms:
- Setup and transportation did not result in substantial defects
- Setup by the dealer is compliant to current code
- Any modifications or alterations are free from substantial defects and relieve the manufacturer of warranty responsibility for that change
- Service a warranty per General Statute 143-143.18:
- Must be a written service agreement clearly stating who is responsible between the manufacturer, dealer, and supplier to provide warranty service
- Remedy a substantial defect within 45 days, if reasonable and under dealer responsibility
- Remedy an imminent safety hazard within five days
Disputes with a home buyer where the dealer is at fault should be remedied through discussion and compromise to avoid further complications including a claim on the surety bond. If Jet pays out on a valid bond claim, we are obligated to make payment, but are still required to collect that money from the home dealer. The bond is like a letter of credit saying that Jet will cover a financial loss to a home buyer if you do not. Ultimately you must pay for a justified claim against you whether that be directly to the claimant or through reimbursing Jet. There will be no bond claim if the dispute is not justified and you are not responsible for the financial loss to the home buyer.
It can be difficult discerning who is responsible for a warranty claim between dealers, manufacturers, and setup contractors. For that reason it is important for the service agreement to be clear on who is responsible for particular warranty defects. This way when a complaint comes up the warranty service can be handled with the appropriate time frame without resulting in a bond claim.
What Happens If I Get a Claim on My Manufactured Housing Dealer Bond?
Complaints against your license and bond come directly from the homebuyer or the Manufactured Building Division. Homebuyers can lodge a complaint directly to the MBD first, but the MBD will not take action because they expect the two parties, homebuyer and set-up contractor, to resolve the dispute themselves.
If both parties cannot come to an agreement, the MBD may send out an inspector to the manufactured home or arrange a conference between all parties to discuss the issue. The MBD will request service records and will require that to be sent in within 10 days per General Statute 143-143.22. If the complaint is not resolved by the two parties then at most the MBD will recommend legal action through the courts. The homebuyer can see compensation through litigation or the bond.
Contact Jet immediately upon receipt of a claim and we will take a thorough review of the details. We work hard in your defense against unjustified claims.
If the claim from a home buyer is justified, then Jet is obligated to payout on the bond per General Statute 143-143.12. Jet must be reimbursed for bond claim payments, so it is in your best interest to handle a dispute before it results in a bond claim.
Think of the bond as a letter of credit to the Manufactured Housing Division, vouching that you will uphold the professional standards of the manufactured housing industry. In order for that guarantee to remain in place, and for the bond to remain intact, you must repay the surety for claims against the bond. It is not Jet’s aim to pay bond claims, but to curb claims activity through proper education and representation of manufactured housing dealers.
The surety bond will be cancelled if pay out occurs. Without a surety bond in place the Manufactured Housing Division will suspend the license per General Statute 143-143.13.
Who Needs a Manufactured Housing Dealer Bond?
A licensed manufactured housing dealer is a business engaged in buying, selling, or displaying for sale, at least three manufactured homes within a given year. North Carolina General Statute 143-143.9 (6) defines a manufactured home as a structure that is transportable in one or more sections, over 320 square feet when erected, and with the intent to be a dwelling.
Businesses licensed as manufactured housing dealers are required by the North Carolina Manufactured Building Division to hold a Manufactured Housing Dealer Bond.
How Does the Application Process Work With Jet?
Purchasing your bond only takes a couple minutes, and can be done completely online. Once you have completed the process Jet will mail the original bond to the board, and a copy will be sent to you along with the receipt of purchase.
In the case of dealers who have multiple business locations and require a large bond limit, further information such as personal and business financials may be needed to properly quote the bond. At Jet, we understand your time is valuable so we tightened down the underwriting process to ensure we ask only for the necessary information to offer the best possible rate for the bond.
Why Is a Manufactured Housing Dealer Bond Required?
The Manufactured House Dealer Bond ensures that a buyer who suffers financial loss from a dealer's violation of the laws described in Chapter 14 - Article 9A can seek restitution in the form of a claim against the bond. The statutes say dealers should provide and uphold a 12-month warranty, perform alterations when allowed and necessary, and properly transport and set up the manufactured home up to the code set by the State of North Carolina Regulations for Manufactured Homes without any substantial defects. Jet provides this bond as a financial guarantee to the North Carolina Manufactured Building Division that you the dealer are fiscally responsible enough to perform transactions with the public.
How Do I Calculate the Bond Limit For a Manufactured Housing Dealer Bond?
The bond limit is a base $35,000 for a manufactured housing dealer. The bond limit increases by $25,000 for each additional business location per State of North Carolina Regulations for Manufactured Homes. For example, if you have 5 locations, then the equation to calculate the bond will be:
$35,000 + 4 ($25,000) = $135,000
The manufactured housing division will inform you during the license application or renewal process as to the required bond limit if there is any confusion.
How to Renew the Manufactured Housing Dealer Bond
Renewing a bond with Jet is easy! If you are on monthly payments they will simply continue. Just make sure that the payment information is up to date. There is a 60-day grace period where the bond remains active with the Manufactured Housing Division should a monthly installment be missed for any reason.
License holders paying the bond on an annual basis need only submit payment before the bond expiration date. The Manufactured Housing Dealer Bond has a common expiration date of June 30th; no matter the start date of the bond, it will expire on June 30th.
The renewal can be processed online instantly, or via mail. Jet will promptly inform the Manufactured Housing Division about the renewal of the bond.
