Surety Bond News

Many contractors that were planning on starting an LLC (Limited Liability Company) in California found that they were legally unable; but a new bill has changed that. Legislators put a new law in to place allowing contractors to operate as an LLC but in order to do so; they must obtain a large surety bond. (more…)

Surety bonds are required for virtually all high profile construction projects to begin, yet they remain a mystery to many. Some have never heard of “surety bonds” or “contractors bonds” as they are commonly referred to in the construction industry, so acquiring one can be unclear all in itself. Bonding requirements vary from one area to another; for those looking to start a construction project in California, the following areas can help define local surety bonding principles: (more…)

Good quality work can be hard to find in these modern days; it seems like businesses often cut corners to save money, out of convenience, or just out of pure laziness. The City of El Paso, Texas has had one too many run-ins with unreliable construction contractors and is making changes to put a stop to it.

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The SB 1432, which became effective on January 1, 2009, amended California’s law for claims toward home improvement contractors. The new law states that a homeowner may make a claim against the contractor’s bond only if the damages happened when the homeowner did not intend on selling the home. The law also makes a change to the time limit of making the claim, based on the contractor’s licensing period.

In the aftermath of Hurricane Ike, many out-of-state electrical contractors are traveling into Texas to assist in the disaster recovery efforts. In order to operate in accordance with the law, it is necessary to become familiar with the both the State’s laws and the local ordinances of the municipality that you plan on performing work in.

Electrical Contractors, who have an equivalent license in their own state, are able to quickly obtain an Emergency License issued by the Texas Department of Licensing and Regulation (TDLR). The specific application for this license is available on their website and must be submitted with a copy of your current license and the application fee. An Emergency License can be issued for the following classifications: Master Electrician, Master Sign Electrician, Journeyman Electrician, Journeyman Sign Electrician, Residential Wireman, and Maintenance Electrician. With this license, you must work under another contractor licensed in Texas. The Emergency License is valid for 90 days and will only allow you to perform within the designated disaster area and during the time of a declared disaster and its recovery period.

Another quick way to get licensed is to apply for a temporary apprenticeship license. This temporary license would be valid for 21 days – hopefully giving you enough time to obtain your permanent license. Again, you must work under another contractor licensed in Texas.

Be sure to research specific municipality requirements as well. Many cities require contractors to be registered with the municipality. Along with your registration, they may require varying registration fees, additional insurance coverage, and a surety bond.

As an example, here are the licensing requirements for contractors to become registered in the City of Galveston:

• Completed Contractor License Application
• $200.00 Registration Fee
• $300,000 minimum liability insurance listing “City of Galveston� as an additional insured
• $5,000 Surety Bond for permitting/general contracting

You can find their Contractor License Application and other helpful information regarding their requirements on their website:
City of Galveston

The State of Texas has adopted the NFPA 70 Electrical Code as published in the NEC 2008 Edition. Check with the local code enforcement office in the city you will be performing work in to find out what electrical code requirements they’ve adopted. It is important to learn state and local standards for electrical work because they could differ from your home state.

It is inspiring to hear from so many contractors wishing to help out those who have faced devastation due to natural disasters such as Hurricane Ike. With great intentions in the front of your mind, it is easy to act in haste and overlook the proper steps essential to stay in compliance. Be sure to protect yourself and your company by doing the necessary research and paperwork. This will save you valuable time and money, so you can put more effort towards what really matters – helping those in need.