Surety Bond News

New and used car dealers in the State of Connecticut must follow new legislation that was recently enacted. The new law, which is referred to as SB 414 boosts the surety bond that is required of both new and used car dealers from $20,000 to $50,000. The present legislation authorizes the Commissioner of Motor Vehicles to require a increased surety bond amount from a license applicant; this is calculated by the applicants financial circumstance.

The state of Connecticut enacted a new law concerning debt negotiators on July 7^th, 2009. SB 950, which is the new law, requires debt negotiators to obtain a $40,000 license surety bond conditioned on the following of the new law. SB 950 authorizes direct actions on the surety bond for any harm that is consequential of non-compliance or the licensee’s failure to execute any written agreements with a debtor. The state also may take claims on the surety bond to amass civil penalties compulsory to the licensee. The aggregate liability under the surety bond is restricted to the penal total of the surety bond. The sureties are able to terminate the surety bond so long as there is 30 days of written notice. SB 950 became active on October 1^st, 2009.

Mortgage brokers and lenders must follow a new law applied in the state of Connecticut. Titled SB 948, the new law requires mortgage lenders and brokers to be bonded and allows the Banking Commissioner to implement regulations for the quantity of the surety bond; it must reflect the dollar amount of loans that the mortgage lender or mortgage broker originated. All mortgage loan originators have to be protected by a surety bond. Should the originator be a former employee or exclusive agent of a broker or lender that was subject to this surety bond obligation, the employer’s surety bond can be used only if coverage for all originators is supplied under the employer’s bond. If the originator acquires a surety bond by itself, the bond quantity must reflect the dollar amount of loans that it originated. The previous law called for a $40,000 bond from lenders and brokers, which was planned to raise the amount to $80,000 on August 1st, 2009. As presented, SB 948 would have demanded brokers and lenders to obtain a surety bond in an amount varying between $100,000 and $500,000. The SFAA cooperated with AIA and members in Connecticut to lessen the surety bond amounts.

Time-share developers must abide by a new law in Connecticut state titled SB 897. The new law regulates time-shares, requiring developers to put in an escrow and or trust account all advance deposits received from a potential purchaser of a time-share. In the place of an escrow account, SB 897 authorizes the Commissioner of Consumer Protection to allow a surety bond, irrevocable letter of credit, or other assurance. Should the construction of the time-share be complete, the surety bond must be in an amount equivalent to or larger than the amount of funds that would otherwise be deposited. If the project is incomplete, the surety bond may be in the quantity explained earlier or in a quantity that secures the completion of all guaranteed accommodations along with all furniture, fixtures and any other promised modifications. SB 897 became active on January 1, 2010.

Timeshare developers in Connecticut must abide by a new law titled SB 897. The new law regulates timeshares in Connecticut, asking developers to put all advance deposits collected from a potential buyer of a timeshare in an escrow or trust account. In place of an escrow account, SB 897 permits the Commissioner of Consumer Protection to allow a surety bond, irrevocable letter of credit, or other assurance. If the construction is complete on the timeshare, the surety bond has to be in a quantity equivalent or greater than the quantity of funds that would otherwise be deposited. The surety bond may be for the amount previously stated or in an amount that secures the completion of all guaranteed accommodations including all furniture, fixtures and other promised enhancements if the project is not yet finished. SB 897 becomes active on January 1st, 2010.