(a) Unless exempt pursuant to subsection (d) of this section, a dealer shall maintain a $25,000 bond conditioned on the dealer's payment of all valid bank drafts drawn by the dealer for the purchase of motor vehicles and the dealer's transfer of good title to each motor vehicle the dealer offers for sale. The bond must be valid for the same period of time as the dealer's license and is subject to the following:
- (1) The bond shall be on a form which is prescribed by the division and approved by the attorney general and issued by a company duly authorized to do business in the state of Texas.
- (2) The bond shall be in the business name in which the dealer's license will be issued and contain the complete physical address of each dealership location licensed under the general distinguishing number that the bond is intended to cover.
- (3) A bond executed by an agent who represents a bonding company or surety must be supported by an original power of attorney from the bonding company or surety.
- (b) Recovery against the bond may be made by any person who obtains a court judgment assessing damages and/or attorneys fees for an act or omission on which the bond is conditioned. If the person seeking to obtain such a court judgment is a dealer, that dealer shall notify the division of the claim immediately upon filing suit on the bond.
- (c) Payment of any judgment by the bonding company shall be immediately reported to the division in writing.
(d) The provisions of subsection (a) of this section do not apply to a:
- (1) franchised motor vehicle dealer who is licensed by the division;
- (2) franchised motorcycle dealer who is licensed by the division;
- (3) house trailer or travel trailer dealer; or
- (4) trailer/semitrailer dealer.
Source Note:The provisions of this §215.137 adopted to be effective February 11, 2010, 35 TexReg 883.