If the department is not satisfied as to the ownership of the manufactured home or that there are no undisclosed security interests in it, the department may accept the application but shall do either of the following:
(1) Withhold issuance of a certificate of title until the applicant presents documents reasonably sufficient to satisfy the department as to the applicant's ownership of the manufactured home and that there are no undisclosed security interests on it.
(2) As a condition of issuing a certificate of title or certificate of cancellation, require the applicant to file with the department a bond in a form prescribed by the department and executed by the applicant, and either accompanied by the deposit of cash with the department or also executed by a person authorized to conduct a surety business in this state. The bond shall be in an amount equal to fifty thousand dollars ($50,000) for manufactured homes less than 10 model years old and twenty-five thousand dollars ($25,000) for all manufactured homes 10 years old or older and shall be conditioned to indemnify any prior owner and lienholder and any subsequent purchaser of the manufactured home or person acquiring any security interest in it, and their respective successors in interest, against any expense, loss, or damage, including reasonable attorney's fees, by reason of the issuance of the certificate of title or certificate of cancellation for the manufactured home or on account of any defect in or undisclosed security interest upon the right, title, and interest of the applicant in and to the manufactured home. Any such interested person has a right of action to recover on the bond for any breach of its conditions, but the aggregate liability of the surety to all persons shall not exceed the amount of the bond. The bond, and any deposits accompanying it, shall be returned at the end of three years or prior thereto if the manufactured home is no longer in this state and the currently valid Alabama certificate of title is surrendered to another state, unless the department has been notified of the pendency of an action to recover on the bond.
Last modified: May 3, 2021