2006 Code of Virginia § 46.2-1993.20 - Bonding requirements for applicants for license

46.2-1993.20. Bonding requirements for applicants for license.

Every applicant for an original, second year renewal and third year renewalmotorcycle dealer's license shall obtain and file with the Commissioner abond in the amount of $25,000. However, no dealer shall be required to obtainmore than one $25,000 bond for all licenses held under this subtitle. Anydealer who is licensed under Chapter 15 of this title and who obtains amotorcycle dealer license under this chapter, shall be exempt from the bondrequirements set out in this section. In addition, any person who purchases amotorcycle from a dealer who is licensed under Chapter 15 of this title,shall have access to the Motor Vehicle Transaction Recovery Fund asprescribed in Article 3.1 ( 46.2-1527.1 et seq.) of Chapter 15 of thistitle. The bond shall come from a corporate surety licensed to do business inthe Commonwealth and approved by the Attorney General. The bond shall beconditioned on a statement by the applicant that the applicant will notpractice fraud, make any fraudulent representation, or violate any provisionof this chapter in the conduct of the applicant's business. The Commissionermay, without holding a hearing, suspend the dealer's license during theperiod that the dealer does not have a sufficient bond on file.

If a person suffers any of the following: (i) loss or damage in connectionwith the purchase of a motorcycle by reason of fraud practiced on him orfraudulent representation made to him by a licensed motorcycle 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 motorcycle; or(iii) loss or damage resulting from a breach of an extended service contractentered into on or after the effective date of this act, as defined by 59.1-435, that person shall have a claim against the dealer and the dealer'sbond, and may recover such damages as may be awarded to such person by finaljudgment of a court of competent jurisdiction against the dealer as aproximate result of such loss or damage up to, but not exceeding, the amountof the bond, from such surety, who shall be subrogated to the rights of suchperson against the dealer or salesperson. The liability of such surety shallbe limited to actual damages, and shall not include any punitive damages orattorneys' fees assessed 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 canceled. 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 canceled as tofuture liability by the dealer's surety upon thirty days' notice to theDepartment.

(1996, cc. 1043, 1052.)