46.2-1927 - Bonding requirements for applicants for license.
§ 46.2-1927. Bonding requirements for applicants for license.
Every applicant for an original, second year renewal, and third year renewaldealer's license shall obtain and file with the Commissioner a bond in theamount of $25,000. However, no dealer shall be required to obtain more thanone $25,000 bond for all licenses held under this subtitle. Any dealer who islicensed under Chapter 15 of this title and who obtains a T&M vehicle dealerlicense under this chapter, shall be exempt from the bond requirements setout in this section. In addition, any person who purchases a T&M vehicle froma dealer who is licensed under Chapter 15 of this title, shall have access tothe Motor Vehicle Transaction Recovery Fund as prescribed in Article 3.1 (§46.2-1527.1 et seq.) of Chapter 15 of this title. The bond shall come from acorporate surety licensed to do business in the Commonwealth and approved bythe Attorney General. The bond shall be conditioned on a statement by theapplicant that the applicant will not practice fraud, make any fraudulentrepresentation, or violate any provision of this chapter in the conduct ofthe applicant's business. The Commissioner may, without holding a hearing,suspend the dealer's license during the period that the dealer does not havea sufficient bond on file.
If a person suffers any of the following: (i) loss or damage in connectionwith the purchase of a T&M vehicle by reason of fraud practiced on him orfraudulent representation made to him by a licensed T&M vehicle dealer or oneof the dealer's salespersons acting within his scope of employment; (ii) lossor damage by reason of the violation by a dealer or salesperson of anyprovision of this chapter in connection with the purchase of a T&M vehicle;or (iii) loss or damage resulting from a breach of an extended servicecontract entered into on or after July 1, 1995, as defined by § 59.1-435,that person shall have a claim against the dealer and the dealer's bond, andmay recover such damages as may be awarded to such person by final judgmentof a court of competent jurisdiction against the dealer as a proximate resultof such loss or damage up to, but not exceeding, the amount of the bond, fromsuch surety, who shall be subrogated to the rights of such person against thedealer or salesperson. The liability of such surety shall be limited toactual damages, and shall not include any punitive damages or attorneys' feesassessed against the dealer or salesperson.
The dealer's surety shall notify the Department when a claim is made againsta dealer's bond, when a claim is paid and when the bond is cancelled. Suchnotification shall include the amount of a claim and the circumstancessurrounding the claim. Notification of cancellation shall include theeffective date and reason for cancellation. The bond may be cancelled as tofuture liability by the dealer's surety upon thirty days' notice to theDepartment.
(1995, cc. 767, 816; 1996, cc. 1043, 1052.)