A. Except as otherwise provided in § 29.1-733.19 or 29.1-733.20, if the Department receives, unaccompanied by a signed certificate of title, an application for a new certificate that includes an indication of a transfer of ownership or a termination statement, the Department shall create a new certificate under this section only if:
1. All other requirements under §§ 29.1-733.7 and 29.1-733.8 are met;
2. The applicant provides an affidavit stating facts showing the applicant is entitled to a transfer of ownership or termination statement;
3. The applicant provides the Department with satisfactory evidence that notification of the application has been sent to the owner of record and all persons indicated in the files of the Department as having an interest, including a security interest, in the watercraft, at least 45 days have passed since the notification was sent, and the Department has not received an objection from any of those persons; and
4. The applicant submits any other information required by the Department as evidence of the applicant’s ownership or right to terminate the security interest, and the Department has no credible information indicating theft, fraud, or an undisclosed or unsatisfied security interest, lien, or other claim to an interest in the watercraft.
B. The Department shall indicate in a certificate of title created under subsection A that the certificate was created without submission of a signed certificate or termination statement. Unless credible information indicating theft, fraud, or an undisclosed or unsatisfied security interest, lien, or other claim to an interest in the watercraft is delivered to the Department not later than one year after creation of the certificate, on request in a form and manner required by the Department, the Department shall remove the indication from the certificate.
C. Unless the Department determines that the value of a watercraft is less than $5,000, before the Department creates a certificate of title under subsection A, the Department shall require the applicant to post a bond or provide an equivalent source of indemnity or security. The bond, indemnity, or other security shall not exceed twice the value of the watercraft as determined by the Department. The bond, indemnity, or other security shall be in a form required by the Department and provide for indemnification of any owner, purchaser, or other claimant for any expense, loss, delay, or damage, including reasonable attorney fees and costs, but not including incidental or consequential damages, resulting from creation or amendment of the certificate.
D. Unless the Department receives a claim for indemnity not later than one year after creation of a certificate of title under subsection A, on request in a form and manner required by the Department, the Department shall release any bond, indemnity, or other security.