(2) The surety bond or letter of credit required under subsection (1) of this section must:
(a) Be conditioned that the applicant pays:
(A) All amounts owing to persons who perform real estate appraisal activity for the appraisal management company; and
(B) All amounts adjudged against the appraisal management company by reason of negligent or improper real estate appraisal activity or appraisal management services or breach of contract in performing real estate appraisal activity or appraisal management services; and
(b) Require the surety company to provide written notice to the board by registered or certified mail:
(A) At least 30 days before the surety company cancels or revokes the bond; or
(B) When the surety company pays for a loss under the bond.
(3) In lieu of the surety bond or letter of credit required under subsection (1) of this section, the appraisal management company may file with the board, under the same terms and conditions as when a bond is filed, a deposit in cash or negotiable securities acceptable to the board.
(4) The surety bond, letter of credit or deposit required by this section must be continuously on file with the board in the amount of $25,000 and is for the exclusive purpose of payment of the obligations listed in subsection (2) of this section. Upon termination or cancellation of the bond, withdrawal of the deposit or reduction of the bond, letter of credit or deposit to less than $25,000, a registered appraisal management company shall:
(a) File a replacement bond, letter of credit or deposit within the time period established by the board by rule; or
(b) Surrender the company’s registration to the board and cease operating as an appraisal management company.
(5) Any person damaged by an appraisal management company’s failure to pay an obligation listed in subsection (2) of this section has a right of action under the bond. An action under the bond must be commenced within one year after the appraisal management company fails to pay the amount owing or the amount adjudged against the appraisal management company. [2010 c.87 §3; 2011 c.447 §10]
Note: See note under 674.200.
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