A. Before granting an original license, the director shall require of the applicant, except an applicant for salesperson or broker of manufactured homes, mobile homes or factory-built buildings designed for use as residential buildings, a surety bond in a form acceptable to the director or a cash deposit pursuant to this section.  A separate bond or cash deposit shall be required for each branch location of any licensed manufacturer or installer. No license shall be renewed unless the applicant’s surety bond or cash deposit is in full force and effect. A change of location of a licensee’s principal place of business requires a rider or endorsement to the existing bond and payment of the administrative function fee.  The rider or endorsement shall indicate the new location and acceptance of claims for the previous location.

Terms Used In Arizona Laws 41-4029

  • Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
  • Board: means the board of manufactured housing. See Arizona Laws 41-4001
  • Broker: means any person who acts as an agent for the sale or exchange of a used manufactured home or mobile home except as exempted in section 41-4028. See Arizona Laws 41-4001
  • Commercial: means a building with a use-occupancy classification other than single-family dwelling. See Arizona Laws 41-4001
  • Consumer: means either a purchaser or seller of a unit regulated by this chapter who utilizes the services of a person licensed by the department. See Arizona Laws 41-4001
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Department: means the Arizona department of housing. See Arizona Laws 41-4001
  • Director: means the director of the department. See Arizona Laws 41-4001
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Fraud: Intentional deception resulting in injury to another.
  • Installation: means :

    (a) Connecting new or used mobile homes, manufactured homes or factory-built buildings to on-site utility terminals or repairing these utility connections. See Arizona Laws 41-4001

  • Installer: means any person who engages in the business of performing installations of manufactured homes, mobile homes or residential single family factory-built buildings. See Arizona Laws 41-4001
  • Manufacturer: means any person engaged in manufacturing, assembling or reconstructing any unit regulated by this chapter. See Arizona Laws 41-4001
  • Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
  • Residential: means a building with a use-occupancy classification of a single-family dwelling or as governed by the international residential code. See Arizona Laws 41-4001
  • Salesperson: means any person who, for a salary, commission or compensation of any kind, is employed by or acts on behalf of any dealer or broker of manufactured homes, mobile homes or factory-built buildings to sell, exchange, buy, offer or attempt to negotiate or act as an agent for the sale or exchange of an interest in a manufactured home, mobile home or factory-built building. See Arizona Laws 41-4001
  • Unit: means a manufactured home, mobile home, factory-built building or accessory structures. See Arizona Laws 41-4001

B. The bonds or cash deposit shall be in amounts prescribed by the board.

C. The surety bonds shall be executed by the applicant as principal with a corporation duly authorized to transact surety business in this state. Evidence of a surety bond shall be submitted to the director in a form prescribed by the director. The applicant may in the alternative establish a cash deposit in the amount of the bond with the state treasurer pursuant to the rules adopted by the director.  The bond funds shall be deposited, pursuant to sections 35-146 and 35-147, in a special account to be known as the consumer recovery fund.  The state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.  Such cash deposits may be withdrawn, if there are no outstanding claims against them, two years after the termination of the license in connection with which the cash is deposited.  The cash deposit may be withdrawn two years after the filing of a commercial surety bond as a replacement to the cash deposit.

D. The bond or deposit required by this section shall be in favor of the state for the benefit of any person covered by this subsection.  The bond or deposit shall be subject to claims by:

1. Any consumer of a unit regulated by this chapter who enters into an agreement with any licensee, except a salesperson or broker of manufactured homes, mobile homes or factory-built buildings designed for use as residential buildings, and is damaged by the failure of the principal to perform a sales or installation agreement or to perform repairs under a warranty.

2. The director, if the principal fails to pay any of the fees or costs that the principal owes the department.

E. Any person claiming against the bond or deposit, except the department, may maintain an action against the principal and the surety.  Such principal’s bond or deposit may be sued on in successive actions until the full amount is exhausted.  No suit may be commenced on the bond or deposit after the expiration of two years after the date of sale or installation of the unit, whichever is later, on which the suit is based, except that the time for purposes of the claim for fraud shall be measured pursuant to section 12-543.

F. The surety bond or deposit shall be continuous in form and shall contain the condition that the total aggregate liability of the surety or depository for all claims shall be limited to the face amount of the bond or depository irrespective of the number of years the bond or depository is in force.  If the corporate surety desires to make payment without awaiting court action, the amount of the bond filed shall be reduced to the extent of any payment or payments made by the corporate surety in good faith. Any such payments shall be based on priority of written claims received by the corporate surety prior to court action.  The surety bond or depository shall be continuous as long as the corporate surety or the depositor maintains the face amount of the bond or deposit.  Failure to maintain the face amount of the bond or deposit constitutes a suspension of such license until the face amount of the bond or deposit is restored.

G. The corporate surety shall notify the director of the intent of the principal to cancel the bond and of any monies paid from the bond.  On receipt by the director of notice to cancel a bond by any corporate surety, the director shall immediately notify the licensee who is the principal on the bond of the effective date of cancellation of the bond and that the licensee shall furnish a like bond or make cash deposit on or before the effective date of cancellation or the license shall be suspended. Notice to the licensee shall be by certified mail postage fully prepaid, addressed to the licensee’s last address of record with the department. The license shall be suspended on the date the bond is canceled unless a replacement bond or cash deposit in lieu of a bond is on file with the director.

H. The director shall have no personal liability for the performance of duties relating to the bond and cash deposit requirements of this section if such duties are performed in good faith.