44-1274. Bond; amount; filing; beneficiaries; cancellation

423 words·~2 min read·/az/title-44/44-1274

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. A seller shall maintain a bond of one hundred thousand dollars issued by a surety company duly authorized to do business in this state. The bond shall be filed with the state treasurer. No control or beneficiary interest may be held by the seller in the surety or by the surety company in the seller.

B. The bond required by subsection A of this section shall be in favor of this state to be held in trust by the state treasurer for the benefit of any consumer who suffers financial damage as a result of a violation of this article or an unlawful practice pursuant to section 44-1522.

C. A consumer who makes a claim against the bond may maintain an action against the seller and the surety, except that the surety is liable only for any monies paid by the consumer to the seller or solicitor, plus reasonable attorney fees. The surety bond may be sued upon in successive actions until the full amount is exhausted. A consumer may not commence suit on the bond more than four years after the act or omission on which the suit is based. Subject to the limitations in this article, a surety is liable for damages for an act or omission during the time the bond is in effect.

D. The aggregate liability of the surety to all consumers for all breaches of the conditions of the bond provided in this section shall not exceed the amount of the bond.

E. A surety for any cause may cancel the bond by giving sixty days' written notice by certified mail of the cancellation to the state treasurer, the attorney general and the seller. On or before the effective date of the cancellation of the bond, the seller shall either obtain a new bond which meets the requirements of this section and file a copy of the new bond with the state treasurer or make a cash deposit.

F. In lieu of furnishing the surety bond as required by this section, the seller may deposit with the state treasurer a cash deposit in the required amount.

G. The state treasurer shall maintain cash deposited pursuant to this section in an interest bearing trust account on behalf of the depositor. Deposits plus accrued interest may be withdrawn, if there are no outstanding claims against them, four years after the seller ceases to do business in this state. Deposits may be withdrawn four years after the filing of a surety bond as a replacement to the cash deposit.