Texas Residential Service Company Bond

Texas Residential Service Company Bond

Residential service companies, also known as home warranty companies, operating in Texas must show proof of financial responsibility to the Real Estate Commission as part of their licensing requirements. One way to show this is to file a Residential Service Company Bond that is used as a guarantee that contract holders will not pay for services that the residential service holder ultimately does not uphold. 

QUOTE

Buying your bond with Jet means you can pay for your bond in a way that makes the most sense to you, whether it’s low monthly payments, annually, or multiple years at a time. 

What Is the Bond Limit and Price of the Residential Service Company Bond?

You can purchase your Residential Service Company Bond for as low as $25 per month or $250 per year. Of course, rates are dependent on a soft credit check and may vary.

New licensees will need a $25,000 bond, but the limit may be adjusted after the filing of a second report as indicated in Section 1303.154 of the Texas Residential Service Company Act. The new limit will be based on the report that shows the number of claims paid by the residential service company in the previous year. 

Bond LimitClaims Paid Dollar Amount
$10,000Less than $50,000
$25,000$50,000 to $199,999
$50,000$200,000 to $499,999
$100,000$500,000 of more
Texas Residential Service Company Bond Limits

Why Is the Texas Residential Service Company Bond Required?

The Real Estate Commission requires this bond as a way to guarantee that residential service companies won’t swindle the citizens of Texas by taking payment for a residential service contract and then failing to uphold their duties. Contracts are used by contract holders (residential property owners) to make sure that the appliances, structural aspects, or home systems (for example, heating, air conditioning, plumbing, etc.) will be maintained according to the contract made with the residential service company. If the company cannot complete maintenance or reparations or find a technician to complete it, the company must provide compensation to the contract holder. The residential service company’s failure to make repairs/replacements or make payment will allow the contract holder to seek restitution from the bond. 

How to Apply for the Residential Service Company Bond With Jet

It just takes a few minutes to apply for your Residential Service Company Bond! A credit check is mandatory (don’t worry, it doesn’t affect your credit score), so the application will ask for your social security number. Other questions will go over general business information.

Once your application is complete, a Jet underwriter will go over it and may request additional information, like financial statements, at this time. After the review has been completed, you will receive an email with your quote that can be purchased through the link. Just complete the purchase to get a digital copy of your bond and a receipt emailed to you. 

How Does the Residential Service Company Bond Get Filed to the Real Estate Commission?

Once your payment has been processed, Jet will get your bond form ready. We will fill out all the required fields on the bond and mail it over to you. You will have to sign the bond and send it in to: 

Texas Real Estate Commission
PO Box 12188
Austin, TX 78711-2188

Can I Cancel My Residential Service Company Bond and Get a Refund?

Yes, Jet is able to provide a refund for surety bonds after the 90-day cancellation period. The Commission needs a notice of 90 days before the cancellation can be processed and liability released. If you need to cancel your bond, send Jet an email to [email protected] so we can get the process started. 

For refunds, only annual terms that are paid for ahead of time are eligible. Once the 90 days have passed, Jet will take the remaining time and calculate a refund. Monthly payments will continue during the pending cancellation period; once the bond is fully cancelled, Jet will remove all payment information and cease payments.  

How to Renew the Texas Residential Service Company Bond

When your bond term is ending, Jet will send you a notice for your Residential Service Company Bond renewal. You can fill out the renewal notice and send it back through the mail or click the link in the email to select your new term and submit payment. There is no additional paperwork required from you beyond that. 

If you are paying monthly, your bond is on a pay-as-you-go basis. As long as Jet receives payment, your bond will stay active.

How Does a Principal Avoid Residential Service Company Bond Claims?

To prevent action from being taken on the bond, it is your duty as a home warranty company to follow all rules and regulations that apply to your business—mainly the Residential Service Company Act. Complying with the Act will prevent fraudulent or deceptive business practices that could cause financial damage to the people that hold a contract with you. Although any violation could cause damage, certain actions are inherently prohibited under Subchapter G: 

Basically, what this means is that you will enter into honest contracts and uphold those contracts when repairs or replacements are needed for appliances, home systems, or structural components that are covered by the contract. Failure to fulfill this obligation directly or find a technician to make the needed repairs will result in you having to compensate the contract holder (aka the homeowner). If you don’t provide compensation, a claim would be filed against the Home Warranty Company Bond to account for the loss the homeowner suffered.

What Happens if I Get a Residential Service Company Bond Claim?

If you receive a claim against your bond, contact Jet right away. Our team will check out whether the claim is valid, but it is likely to be legitimate if it has advanced to the claim filing stage. Any time the Real Estate Commission receives a complaint, they go through a screening and the complaints that aren’t valid will not proceed further into the complaint process. 

Jet will be obligated to pay the contract holder for a valid claim. You are still liable for the damage and will be required to pay Jet back. 

Texas Residential Service Company Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: