Ariz. Admin. Code § 4-46-402

Current through Register Vol. 30, No. 50, December 13, 2024

Section R4-46-402 - Bond Required

A. The surety bond required under A.R.S. § 32-3667 shall be in the amount of $20,000 and shall be issued by a surety company authorized to do business in Arizona.

B. The controlling person of a registered AMC shall ensure that the surety bond required under A.R.S. § 32-3667 requires the issuing surety company to provide written notice to the Department by registered or certified mail at least 30 days before the surety company cancels the bond and within 30 days after the surety company pays a loss under the bond.

C. The surety bond required under A.R.S. § 32-3667 is to be used exclusively to ensure that a registered AMC pays:

1. All amounts owed to persons that perform real estate appraisal services for the AMC, and

2. All amounts adjudged against the AMC as a result of either negligent or improper real property appraisal services or appraisal management services or of a breach of contract in performing real property appraisal services or appraisal management services.

D. The controlling person of a registered AMC shall ensure that the required surety bond is:

1. Maintained in the amount of $20,000;

2. Funded to $20,000 within seven days after being drawn down; and

3. Maintained for at least one year after the AMC's registration expires, is revoked or surrendered, or otherwise ends.

E. If the Department receives notice from the surety company of intent to cancel the required bond, the Department shall notify the controlling person of the AMC and require that the controlling person submit proof of a replacement bond before the existing bond is cancelled. Under A.R.S. § 32-3678, failure to maintain the required bond is grounds for disciplinary action.

F. If a registered AMC operates in Arizona under more than one name, other than a DBA, the controlling person shall ensure that a separate surety bond in the amount of $20,000 is maintained in each name.

G. If the name of a registered AMC is changed, the controlling person of the registered AMC shall ensure that a surety bond in the amount of $20,000 is:

1. Maintained in the former name for one year after the name is changed, and

2. Obtained in the registered AMC's new name.

H. A person damaged by a registered AMC's failure to pay an obligation listed in subsection (C) has a right of action against the surety bond. The damaged person shall begin the action in a court of competent jurisdiction within one year after the AMC failed to pay the amount owed or the amount adjudged against the AMC.

I. If the surety bond required under A.R.S. § 32-3667 is cancelled, liability of the issuing surety company is not limited or cancelled regarding any claim against the surety bond for actions by the AMC while the surety bond was in force.

Ariz. Admin. Code § R4-46-402

Adopted by Final rulemaking at 21 A.A.R. 1675, effective 10/6/2015. Amended by final rulemaking at 25 A.A.R. 1139, effective 6/10/2019. Amended by final rulemaking at 28 A.A.R. 893, effective 6/11/2022.