2017 Code of Alabama
Title 34 - PROFESSIONS AND BUSINESSES.
Chapter 14A - HOME BUILDING AND HOME IMPROVEMENT INDUSTRIES.
Section 34-14A-15 - Recovery fund.

Universal Citation: AL Code § 34-14A-15 (2017)
Section 34-14A-15Recovery fund.

The board is authorized to establish a Homeowner's Recovery Fund from which an aggrieved homeowner may recover actual economic damages, not including interest and court costs, sustained within the State of Alabama as the direct result of conduct of a licensee in violation of this chapter or the rules and regulations of the board.

Any payments from the Homeowner's Recovery Fund shall be subject to the following limitations and conditions:

(1) Payments for claims based on judgments or settlements against any one licensee shall not exceed fifty thousand dollars ($50,000) in the aggregate.

(2) Payments for claims arising out of the same transaction shall not exceed twenty thousand dollars ($20,000) in the aggregate.

(3) The Homeowner's Recovery Fund shall make payments only to homeowners who file a complaint with the board pursuant to the requirements of subsection (b) of Section 34-14A-8.

(4) The Homeowner's Recovery Fund shall not make payments based on consent judgments.

(5) Failure of the homeowner to follow any provisions of this chapter shall preclude payment from the Homeowner's Recovery Fund.

Each licensee shall, on order of the board, pay a fee not to exceed sixty dollars ($60), no more than once a year, per licensee for deposit in the Homeowner's Recovery Fund. A licensee on inactive status shall not be required to contribute to the Homeowner's Recovery Fund. The annual Homeowner's Recovery Fund fee shall be set by the board after considering all expenses incurred by the board in defending, satisfying, or settling any claims paid from the Homeowner's Recovery Fund.

When a complaint is filed which may result in liability for the Homeowner's Recovery Fund, the complainant shall notify the board in writing, by certified mail, when the action is commenced.

When the notice is received, the board may enter an appearance, file pleadings and appear at court hearings, defend or take action it deems appropriate either on the behalf and in the name of the defendant or in its own name. The board may seek any appropriate method of judicial review. The board may settle or compromise the claim. Any expenses incurred by the board in defending, satisfying, or settling any claim shall be paid from the Homeowner's Recovery Fund.

When a complainant obtains a valid judgment, excluding consent judgments, in a court of competent jurisdiction against a licensee on the grounds set out above, the aggrieved homeowner may, when judgment is final, file a verified claim in the court in which the judgment was entered and, on 30 days' written notice to the board, may apply to the court for an order directing payment out of the Homeowner's Recovery Fund of the amount remaining unpaid on the judgment.

The court shall proceed on such application forthwith and, on hearing, the complainant shall be required to show that:

(1) He or she is not the spouse, child, or parent of the debtor, or the personal representative of the spouse, child, or parent or a shareholder, officer, or director of the debtor.

(2) He or she has obtained a judgment, as described in this section, stating the amount of the judgment and the amount owing on the judgment at the date of the application, and, that in such action, he or she had joined any and all bonding companies which issued corporate surety bonds to the judgment debtor as principal and all other necessary parties.

(3) The following items, if recovered by him or her, have been applied to the actual compensatory damages awarded by the court:

a. Any amount recovered from the judgment debtor.

b. Any amount recovered from bonding companies.

c. Any amount recovered in out-of-court settlements.

The court shall order the Homeowner's Recovery Fund to pay the sum it finds due, subject to the provisions and limitations of this section.

Should the board pay from the Homeowner's Recovery Fund any amount in settlement of a claim or toward satisfaction of a judgment against a licensee, all licenses of the licensee may be terminated by the board. The board may refuse to issue a new license to the former licensee until he or she has repaid in full, plus interest at the rate of 12 percent per annum, the amount paid from the Homeowner's Recovery Fund. A discharge in bankruptcy shall not relieve a person from the penalties and disabilities provided in this section.

If the balance in the Homeowner's Recovery Fund is insufficient to satisfy a duly authorized claim or portion of a claim, the board shall, when sufficient money has been deposited in the Homeowner's Recovery Fund, satisfy the unpaid claims in the order that the claims were filed.

The sums received by the board, pursuant to the provisions of this section, shall be deposited into the State Treasury and held in a special fund to be known as the Homeowner's Recovery Fund, and shall be held by the board in trust for carrying out the purposes of the Homeowner's Recovery Fund. These sums may be invested by the State Treasurer in any investments which are legal under the laws of this state. Any interest or other income from investments of the Homeowner's Recovery Fund shall be deposited into the Homeowner's Recovery Fund.

When, on order of the court, the board has paid from the Homeowner's Recovery Fund any sum, the board shall be subrogated to all the rights of the judgment creditor, and all his or her rights, title, and interest in the judgment, to the extent of the amount paid from the Homeowner's Recovery Fund, shall thereby be assigned to the board. Any amount and interest recovered by the board on the judgment shall be deposited to the Homeowner's Recovery Fund.

The limitations and conditions of payment from the Homeowner's Recovery Fund as established by Act 2002-72 shall not apply in any case where, prior to May 1, 2002, a complainant has obtained a valid judgment in a court of competent jurisdiction against a licensee on the grounds set out in this chapter.

(Acts 1992, No. 92-608, p. 1282, §15; Acts 1997, No. 97-250, p. 457, §3; Act 2002-72, p. 163, §1; Act 2006-105, p. 136, §1.)
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