Starting on January 1, 2018, Virginia Home Contract Service Providers face new requirements passed by House Bill 1542.
People who provide services including repair, replacement, and/or maintenance are referred to as Home Contract Service Providers. These home service contracts are made in order for work to be done on property. Examples of service can be fixing roofs from extreme weather or electrical damage on a property.
Before the passage of House Bill 1542 takes effect, Virginia home contract service providers need to submit an application along with a $500 fee to the Virginia Bureau of Insurance for a license. Providers need to be able to keep at least 20% or $100,000 net worth of premiums charged on contracts. Also, a financial security deposit with the Virginia State Treasurer needs to be placed by the provider. The amount needs to be at least 5% of gross from the sale of home service contracts. legally, the deposit cannot be less than $25,000 or more than $250,000.
New Registration Requirements.
Starting January 1, 2018, instead of the Virginia Bureau of Insurance posting these requirements, the Virginia Department of Agriculture and Consumer Services (VDACS) will now oversee providers. Providers will need to submit a $300 fee to VDACS for license registration. For registration renewals, they must be turned in by July 1st of each year. Also, there is a renewal fee of $300 along with the submission of a yearly audited financial statement. If a provider begins business before registration, there is a $100 late filing fee for every 30 days late. Also, if a provider does not register on time, a $50 fee is enforced for every 30 day period.
New Surety Bond Requirements.
Before registration, providers need to file a $10,000 bond with the Commissioner of the VDACS. In addition to a surety bond, providers need to have at least 40% of gross income received from contracts. The Virginia Home Contract Services surety bond protects the clients of the provider from fraud, misconduct, theft, etc. For more information, visit the VDACS webpage.
To apply for this bond as well as many other types of bonds, visit Surety 1’s free online application page.