Overview of New Mexico Contractor License Bond Requirements
Applying to get licensed as a contractor in New Mexico requires that you provide a contractor license bond. It’s a type of surety bond which essentially binds you in an agreement with the state. This way, if you violate the agreement or use unlawful practices, the state has a mechanism for seeking quick compensation.
More specifically, the contractor license bond required from New Mexico contractors ensures that they comply with the requirements of NMSA 1978, Section 60-13-43. Contractors must also operate in accordance with the building codes outlined in NMAC Title 14, Chapters 7 - 10.
If a violation is discovered, you will be given a deadline for correcting it. A bond claim will be made only if you do not comply with the corrections required by the Construction Industries Division.
This is a quick overview of the requirement and what it means to contractors in the state. You can begin your online application or explore the sections below for more detailed information, such as costs and application process.
Understanding the Cost of Your New Mexico Contractors License Bond
The required total amount of the surety bond is $10,000, which means it can offer a compensation up to that amount if there’s a claim against you. However, your actual cost is just a premium, which can be paid in one-year or three-year terms.
Your premium is determined only after the surety bonds company evaluates your credit report and your credit score. For applicants with good credit and without major credit issues, the cost can be as little as 1%-3% of the total amount. Thus, if you are quoted at 1%, you’ll pay about $100 a year.
Here are some more estimates of your bond cost on the basis of your credit score bracket.
|State and Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|New Mexico Contractors License Bond||$10,000||$100-$150||$100-$300||$250-$500||$500-$1,000|
Bad Credit Program
Bad credit applicants usually have no problem getting their contractor license bond with us. We operate a bad credit surety bonds program to make sure everyone can get bonded.
Premiums are usually a bit higher, but our surety bonds agents will help you build a strong application, so you can get the lowest possible rate. You can check out our surety bond cost guide for important tips on what you can do to lower your premium.
Start Your Application
To get an exact quote on your bond, simply submit our online application. For your convenience, we’ve made it just one page long and it’ll take you just a few minutes to complete.
We do most of the paperwork for you, and we’ll make sure to get your bond to you as quickly as possible, usually within 1-2 business days. We will mail you the original bond form, and email you digital copies upon request.
If you have any questions or need any assistance from our agents, you can always call us at (866)-450-3412.
Filing your Bond with the Construction Industries Division
The New Mexico Construction Industries Division will only accept the original bond form– fax and email copies are not allowed. Once you have received the signature from the bonding company, the bond needs to be filed within 30 days.
The New Mexico contractors license bond is considered continuous until cancelled after a 30-day prior notice. Keep in mind, however, that the cancellation of your bond also leads to the cancellation of your license.
Avoid claims against your surety bond
You should do your best to avoid claims against your bond. The good news is that if you violate any of the applicable regulations, you’ll be given a grace period during which to correct them, so you can still resolve the issue without a claim, even if you’ve made a mistake.
There are numerous violations that can lead to a claim:
- Failure to pay wages
- Failure to pay fringe benefits to employees
- Failure to fulfill contracts you enter
- Causing damage to a person’s property
- Violating the building code
It’s best to take prompt action if you have been found to be in any sort of violation. An actual bond claim can be not only costly, but could lead to the revocation of your license, because you may not be able to obtain a contractor license bond again.
How to Get a New Mexico Contractors License
Becoming a contractor in New Mexico requires that you fulfill a number of licensing requirements. These vary depending on the license type you have chosen, but among them are:
- Obtain a Qualifying Party Certificate
- Pass a licensing exam
- Obtain a Tax ID Number
- Register with the Secretary of State (doesn’t apply for sole proprietors)
- Complete the Contractor License Application
Be sure to check with the Construction Industries Division to make sure you have completed all the paperwork before you send out your application. The application should be delivered by hand or mail with a self-addressed envelope and sufficient postage, so that your license can be mailed back to you.