Sec. 14-176. Withholding of certificate. Bond requirement.
Sec. 14-176. Withholding of certificate. Bond requirement. If the commissioner
is not satisfied as to the ownership of the vehicle or that there are no undisclosed security
interests in it, the commissioner may register the vehicle but shall either: (1) Withhold
issuance of a certificate of title until the applicant presents documents reasonably sufficient to satisfy the commissioner as to the applicant's ownership of the vehicle and that
there are no undisclosed security interests in it; or (2) as a condition of issuing a certificate
of title, require the applicant to file with the commissioner a bond in the form prescribed
by the commissioner and executed by the applicant, and either accompanied by the
deposit of cash with the commissioner or also executed by a person authorized to conduct
a surety business in this state. The bond shall be in an amount equal to twice the value
of the vehicle as determined by the commissioner and conditioned to indemnify any
prior owner and lienholder and any subsequent purchaser of the vehicle or person acquiring any security interest in it, and their respective successors in interest, against any
expense, loss or damage, including reasonable attorney's fees, by reason of the issuance
of the certificate of title of the vehicle or on account of any defect in or undisclosed
security interest upon the right, title and interest of the applicant in and to the vehicle.
Any such interested person has a right of action to recover on the bond for any breach
of its conditions, but the aggregate liability of the surety to all persons shall not exceed
the amount of the bond. The bond, and any deposit accompanying it, shall be returned
at the end of five years or prior thereto if the vehicle is no longer registered in this state
and the currently valid certificate of title is surrendered to the commissioner, unless the
commissioner has been notified of the pendency of an action to recover on the bond.
(1957, P.A. 607, S. 12; P.A. 02-70, S. 7.)
History: P.A. 02-70 made technical changes, increased the bond amount to twice the value of the vehicle, in lieu of one
and one-half times such value, and required that the bond and any deposit accompanying it be returned at end of five years,
in lieu of three years, effective July 1, 2002.