Surety Bond News

The demolition of structures and buildings always bring about risks. The main risk is the potential damage that can be done to public or private property. Although it is not decided yet, a large former stamping plant may either be partially or completely demolished in Ohio; it seems a surety bond fits the mold to protect this kind of work.

“We don’t want anything left on the property that could be environmentally dangerous or cause any kind of damage”, said Councilor Maureen Stauffer.

The doom of the 2.2 million-square-foot building which used to be the Chrysler Stamping Plant has not been sealed yet, but should any demolition take place, city officials want to guarantee the job is done correctly. The city’s main concern is the possibility of infrastructure or land damage during the project; so new demolition rules were enacted on Feburary 22nd. The new rules require job prospects to have a thorough site plan, procedures in place to protect utilities, and have to provide notice of asbestos that must be removed following federal rules. Also, owners of buildings that are larger than 500-square-feet must obtain a $10,000 surety bond to cover any potential damage to city property such as sidewalks and waterlines before demolition can begin. If city regulations are followed, the surety bond payment will be refunded back to the owner of the building which is being demolished.

Officials in Fenton, Miss., told Finch that “a mess” was left behind after the demolition of a Chrysler plant in their city.

The new demolition bond requirement seems to be a great solution all around. The bond will help guarantee the project is completed correctly, and if it’s not the bond will cover any necessary reimbursement. But this doesn’t mean the building owner’s get off scot-free. Should there be any damages to city property a claim will go out on the bond which the surety company who wrote the bond will pay. Subsequently, the surety will go to the owner who purchased the bond for retribution.

On the bright side, if all goes well and as anticipated with the job, the work will be done without damages to public property according to the new regulations. With surety bonds in place, it guarantees the work will be done properly.

Decisions on the demolition of the building won’t be made until the end of 2011 but the bond requirement put in place seems like a great solution to protect the County.

Although sometimes it seems surety bonds just over complicate things, they are here to help and uphold the interests of the public.

A new law was presented in Ohio State relating to oil wells. The new law is titled SB 165 and provides procedures for acquiring a momentary inactive status for an oil or gas well. Upon the third renewal of this status, a surety bond of no more than $10,000 for every inactive well is necessary. The new law provides for an additional surety bond to be required in relation to the forfeiture of bonds required under present law for oil and gas wells. Surety bonds are subject to forfeiture under present legislation for failures to properly refurbish or plug wells according to the law’s stipulations, or for failure to satisfy the conditions of the permit. Should the surety bond be forfeited, SB 165 states that the individual forfeiting the bond may be required to attain a new surety bond in the quantity of $15,000 for a single well, $30,000 for two wells and for $50,000 for three or more wells.

A new bill was enacted in the State of Ohio on May 27th, 2010 concerning long term care facility operators. The new bill, which is referred to as HB 398 provides measures for long term care facility operators that conclude or close their operations, as well as procedures for managing any debt to the U.S. Centers for Medicare and Medicaid Services using successor liability agreements. HB 398 forbids such agreements from requiring the new facility operator to acquire a surety bond.

HB 1 is a new law in Ohio State that was introduced relating to mortgage loan originators, martial arts match promoters, and manufactured housing dealers. The new law incorporates the new federal law for mortgage loan originators which requires them to be licensed and to attain a surety bond or to be covered by their employer’s surety bond. The present law requires all mortgage lenders/brokers to register and acquire a surety bond of $50,000 plus $10,000 for additional locations to their primary place of business. HB 1 states that residential mortgage lenders and brokers must sustain a surety bond as well as a net worth requirement. The surety bond must be from a state authorized bonding company and it will have to be in a quantity equivalent to “one-half percent of the aggregated loan amount of residential mortgage loans originated in the immediately preceding calendar year.” The required bond would be capped at $150,000 and cannot be less than the existing requirement of $50,000 plus $10,000 for every additional location. All mortgage brokers are subject to indistinguishable bonding requirements, but not the recent net worth provisions. Additionally, individual mortgage loan originators who are not covered by an employer’s bond have the surety bond amount capped at $100,000. There is no net worth requirement for loan originators. HB 1 also specifies claims procedures regarding the surety bond. Credit union service organizations are obliged to attain a surety bond under the new law for their mortgage loan originators.

The new bill included other surety bonding provisions. These additions included an expansion of the bond requirement for boxing and wresting match promoters. The new law states that promoters for mixed martial arts, kick boxing, tough man contests, or any other form of martial arts have been exposed to the surety bond requirement; but wrestling match promoters have been excused. The new law also amplified the bond amount from $5,000 to no less than $20,000, and it terminated the cash substitutes to the surety bond. The previous law authorized a cash bond, certified check or a bank draft. Lastly, HB 1 applies to private competitions as well.

The new law also impacts manufactured housing dealers by subjecting them to a bonding requirement for motor vehicle dealers. HB 1 requires licensees that have been licensed for fewer than three years to acquire a surety bond in a quantity no less than $25,000 if the dealer sells a used manufactured home without attaining a certificate of title in the dealer’s name beforehand. The surety bond is exclusively for the function of compensating retail purchasers who sustain losses due to the dealer’s failure to obey the certificate of title laws. Additionally, the new law requires new manufactured home retailers to attain a surety bond or certificate of deposit in a quantity no less than $100,000. HB 1 also directs the Manufactured Housing Commission to implement regulations for manufactured housing brokers, which must contain a surety bond requirement in a quantity that will be established in the policy.

In the state of Ohio, a new law referred to as SB 247, amends existing law in relation to claims against a credit union. SB 247 states that if any depositor, individual, member, or group of persons makes a claim to any share/share account, deposit, security, property held in safekeeping, safe deposit box, obligation, or other possessions in the credit union’s ownership without the authority to exercise any right or control with respect to the property, the credit union is not obligated to recognize the claim unless there is a court order or a posted surety bond. The surety bond form and amount will be determined by the credit union; it functions to indemnify the credit union against any liabilities or loss the credit union might acquire because of its acknowledgment of the claim or because of its denial, due to the claim, to respect or recognize any entitlement to the property.