Alabama Appraisal Management Company Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Alabama Appraisal Management Company bonds
At a Glance:
- Lowest Cost: $250 per year or $25 per month
- Bond Amount: $25,000
- Who Needs it: All appraisal management companies operating in Alabama
- Purpose: To ensure the public will receive compensation for any damages should the appraisal management company violate registration law
- Who Regulates Appraisal Management Companies in Alabama: The Alabama Real Estate Appraisers Board
Background
Alabama statute 34-27A-50 requires all appraisal management companies operating in the state to register with the Alabama Real Estate Appraisers Board. The Alabama legislature enacted the registration laws and regulations to ensure that appraisal management companies engage in ethical business practices. In order to provide financial security for the enforcement of the registration law, appraisal management companies must purchase and maintain a $25,000 surety bond to be eligible for registration.
What is the Purpose of the Alabama Appraisal Management Company Bond?
Alabama requires appraisal management companies to purchase a surety bond as part of the application process to obtain a business registration. The bond ensures that the public will receive compensation for financial harm if the appraisal management company fails to comply with the regulations set forth in Alabama revised statutes Section 34-27A. Specifically, the bond protects the public in the event the appraisal management company engages in any acts of fraud or breaches any contracts made with consumers. In short, the bond is a type of insurance that protects the public if the appraisal management company breaks registration laws.
How Can an Insurance Agent Obtain an Alabama Appraisal Management Company Bond?
BondExchange makes obtaining an Alabama Appraisal Management Company surety bond easy. Simply log in to your account and use our keyword search to find the “appraisal” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Alabama Appraisal Management Company Bond?
No, a credit check is not required for the Alabama Appraisal Management Company bond. Because the bond is considered relatively low risk, the same low rate is offered to all appraisal management companies in Alabama regardless of their credit history.
How Much Does the Alabama Appraisal Management Company Bond Cost?
The Alabama Appraisal Management Company bond costs just $250 per year or $25 per month.
How Does Alabama Define “Appraisal Management Company?”
Alabama statute 34-27A-2 defines an appraisal management company as any business entity that is authorized by either a creditor of a consumer credit transaction secured by the principal dwelling of a consumer or by an underwriter of or other principal in the secondary mortgage market to oversee a network of over 4 licensed appraisers in a state, or 25 or more nationally in a given year, that provide the following services:
- Recruit, select, and retain appraisers
- Contract with licensed appraisers to perform appraisal assignments
- Manage the process of having an appraisal performed
- Review and verify the work of appraisers
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Appraisal Management Companies Apply for a Registration in Alabama?
Appraisal management companies in Alabama must navigate several steps to secure their registration. Below are the general guidelines, but applicants should refer to the application form for details on the process.
Registration Period – The Alabama Appraisal Management Company Registration expires annually and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Appraisal management companies must purchase and maintain a $25,000 surety bond
Step 2 – Complete the Criminal Background Check
Applicants for the Alabama Appraisal Management Company registration are subjected to a criminal background check during the application process. Applicants must complete the criminal history release located here.
Step 3 – Complete the Application
All Alabama Appraisal Management Company Registration applications should be mailed to the following address:
Alabama Real Estate Appraisers Board
100 North Union St. Ste. 370
Montgomery, AL 36104
Appraisal management companies must complete the application in its entirety, and submit the following items:
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- A consent to service of process, if applicable.
- A copy of the company’s written partnership agreement, if applicable.
- A copy of the company’s organizational documents, if applicable.
Applicants must submit the following fees with their registration application:
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- $3,500 application fee
- $25 fee per company appraiser who has been active within the past year
Federally regulated appraisal management companies must complete a separate application.
How Do Alabama Appraisal Management Companies Renew Their Registration?
Appraisal management companies should mail their completed renewal application, including a $2,000 renewal fee (plus $25 per active appraiser), to the following address:
Alabama Real Estate Appraisers Board
100 North Union St. Ste. 370
Montgomery, AL 36104
The Alabama Appraisal Management Company Registration expires annually and must be renewed before the expiration date.
What are the Insurance Requirements for Appraisal Management Companies in Alabama?
Alabama does not require appraisal management companies to obtain any form of liability insurance as a prerequisite to obtaining a business registration. Appraisal management companies must purchase and maintain a $25,000 surety bond.
How Do Alabama Appraisal Management Companies File Their Bond?
Appraisal management companies should mail the completed bond form, including the power of attorney, to the following address:
Alabama Real Estate Appraisers Board
100 North Union St. Ste. 370
Montgomery, AL 36104
The Appraisal Management Company Surety Bond requires signatures from both the surety company that issues the bond and a representative from the appraisal management company. The surety company should include the following information on the bond form:
- Legal name, address, and phone number of entity/individual(s) buying the bond
- Surety company’s name, address, and phone
- Date the bond goes into effect
What Can Alabama Appraisal Management Companies Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, appraisal management companies in Alabama must follow all registration regulations in the state, including some of the most important issues below that tend to cause claim
- Do not engage in any acts of fraud
- Do not breach any contracts made with consumers
What Other Insurance Products Can Agents Offer Appraisal Management Companies in Alabama?
Alabama does not require appraisal management companies to purchase any form of liability insurance as a prerequisite to obtaining a business registration. However, most reputable businesses will seek to purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Alabama Appraisal Management Company Customers?
Alabama conveniently provides a public database to search for active appraisal management companies in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
