                                 CODE OF VIRGINIA

BONDING REQUIREMENTS FOR APPLICANTS FOR AN ORIGINAL LICENSE (§ 46.2-1527.2)

Before the Board shall issue to an applicant an original license, the applicant
shall obtain and file with the Board a bond in the amount of $50,000. The bond
shall come from a corporate surety licensed to do business in the Commonwealth
and approved by the Attorney General. The bond shall be conditioned on a
statement by the applicant that the applicant will not practice fraud, make any
fraudulent representation, or violate any provision of this chapter in the
conduct of the applicant&#8217;s business. The Board may, without holding a
hearing, suspend the dealer&#8217;s license during the period that the dealer
does not have a sufficient bond on file.
		If a person suffers any of the following: (i) loss or damage in connection
with the purchase or lease of a motor vehicle by reason of fraud practiced on
him or fraudulent representation made to him by a licensed motor vehicle dealer
or one of the dealer&#8217;s salespersons acting within his scope of employment,
(ii) loss or damage by reason of the violation by a dealer or salesperson of any
provision of this chapter in connection with the purchase or lease of a motor
vehicle, or (iii) loss or damage resulting from a breach of an extended service
contract as defined by § 59.1-435 entered into on or after April 8, 1994, that
person shall have a claim against the dealer and the dealer&#8217;s bond, and
may recover such damages as may be awarded to such person by final judgment of a
court of competent jurisdiction against the dealer as a proximate result of such
loss or damage up to but not exceeding $25,000, from such surety, who shall be
subrogated to the rights of such person against the dealer or salesperson. The
liability of such surety shall be limited to actual damages and attorney fees
and shall not include any punitive damages assessed against the dealer or
salesperson. On January 1 of each year, the amount that may be awarded against
such bond to any person as a result of loss or damage to that person as provided
in this section shall be increased by the percentage increase over the most
recently available unadjusted 12-month period in the Consumer Price Index for
used motor vehicles, as published by the U.S. Bureau of Labor Statistics or any
successor index. In the event that this index decreases over any such 12-month
period, there shall be no change in the amount that may be awarded.
		In those cases in which a dealer&#8217;s surety shall be liable pursuant to
this section, the surety shall be liable only for the first $50,000 in claims
against the dealer. Thereafter, the Fund shall be liable for amounts in excess
of the bond up to the amount that may be paid out of the Fund, less the amount
of the bond, in those cases in which the Fund itself may be liable. The
aggregate liability of the dealer&#8217;s surety to any and all persons,
regardless of the number of claims made against the bond or the number of years
the bond remains in force, shall in no event exceed $50,000.
		The dealer&#8217;s surety shall notify the Board when a claim is made against
a dealer&#8217;s bond, when a claim is paid and when the bond is cancelled. Such
notification shall include the amount of a claim and the circumstances
surrounding the claim. Notification of cancellation shall include the effective
date and reason for cancellation. The bond may be cancelled as to future
liability by the dealer&#8217;s surety upon 30 days&#8217; notice to the Board.

HISTORY: 1994, c. 478; 1995, cc. 767, 816; 1998, c. 325; 2001, c. 194; 2006, c.
172; 2011, c. 407; 2012, cc. 10, 119; 2015, c. 615.