Modular Set Up Requirements

Confusion has arisen as to whether the holder of a valid North Carolina manufactured (HUD) home set-up contractor's license is authorized to set up a modular home (or any modular building). North Carolina General Statute §143-143.ll(a) prohibits any manufactured home set-up contractor from engaging in business as such in North Carolina without first obtaining a license from the North Carolina Manufactured Housing Board and, as part of the requirements for obtaining this license, to furnish a bond in the amount of $10,000 in accordance with §143-143.12(a)(4).

With regard to modular buildings, if someone undertakes to erect a modular building, but is not licensed as a general contractor pursuant to NC General Statute §87-1, he must provide the local building official with a $5,000 surety bond for each modular building to be erected. This bond shall remain in full force and effect for one year following the issuance of the certificate of compliance for the modular building. The modular building must be erected according to the manufacturer's installation instructions and any applicable provisions of the State Building Code.

The North Carolina manufactured home set-up contractor's license described above DOES NOT authorize the holder of this license to set up modular buildings.  The $10,000 bond that is required to obtain a NC manufactured home set-up contractor's license DOES NOT APPLY to any modular building. The holder of a NC manufactured home set-up contractor's license MAY set up a modular building provided he or she is EITHER the holder of a current NC General Contractor's license OR, provides a $5,000 modular surety bond to the local jurisdiction for each modular building to be erected.

The Manufactured Building Division of the NC Department of Insurance has been asked to explain the scope of building activities permissible under NC G.S. §143-139.1. Our response is as follows:

NC G.S. §143-139.1 provides in part:

The Building Code Council may also adopt rules to ensure that any person that is not licensed in accordance with N.C. Gen. Stat. §87-1, and that undertakes to erect a North Carolina labeled manufactured modular building, meets the manufacturer's installation instructions and applicable provisions of the State Building Code. Any such person, before securing a permit to erect a modular building, shall provide the code enforcement official proof that he has in force for each modular building to be erected a $5,000 surety bond insuring compliance with the regulations of the State Building Code governing installation of modular buildings. 

If someone undertakes to erect a modular building, but is not licensed as a general contractor pursuant to N.C. Gen. Stat. §87-1, he/she must provide the local building official with a $5,000 surety bond for each modular building to be erected. This bond shall remain in full force and effect for one year following the issuance of the certificate of compliance for the modular building. The modular building must be erected according to the manufacturer's installation instructions and any applicable provisions of the State Building Code. 

Filing Claims against $5,000 Modular Surety Bonds 

If the party that set up your modular home or building did so under the $5,000 surety bond option as described above, and you feel that you have cause to file against this bond, you should contact the local inspection department where the permit for the home or building was issued. Obtain a copy of the bond and contact
the bonding company directly. They will provide detailed instructions as to the steps that are necessary for filing a claim, the information that must be provided, etc. 

NC General Contractor's License and Modular Surety Bonds

The question has arisen that, if an entity such as a modular manufacturer or dealer has a valid, current NC General Contractor's License, and hires independent setup contractors to install their modular homes, is it necessary that the setup contractor also obtain a $5,000 surety bond? The answer is "no", provided: 

• There is a documented contractual agreement between the holder of the NC General Contractor's License and the setup contractor for the particular home and site in question, and; 
• The NC General Contractor's License number is recorded on the permit to install the home. This will place ultimate responsibility for the setup with the holder of the NC General Contractor's License.