61-3-208. Affidavit and bond for certificate. (1) If an applicant for a vehicle certificate of title cannot provide the department with a certificate of title transferred to the applicant, the department may issue a certificate of title for the vehicle if the applicant furnishes an affidavit in a form prescribed by the department.
     (2) The affidavit must be signed and sworn to before an officer authorized to administer oaths and affirmations. The affidavit must accompany the application for the certificate of title and include:
     (a) the facts and circumstances through which the applicant acquired ownership and possession of the vehicle;
     (b) information as required by the department to enable it to determine what security interests, liens, and encumbrances, if any, are outstanding against the vehicle;
     (c) the date and the amount secured by the security interests, liens, and encumbrances, if any; and
     (d) a statement that the applicant has the right to have a certificate of title issued.
     (3) If after examination of the application, affidavit, and any other evidence the department determines that a certificate of title for the vehicle should be issued to the applicant, the department shall require the applicant to file with the department a good and sufficient bond before issuing the certificate of title. The bond must be:
     (a) in an amount equal to the average trade-in or wholesale value of the vehicle as determined by the applicable national appraisal guide for the vehicle as of January 1 for the year in which the application for certificate of title is made. When a national appraisal guide is not available for a vehicle, the department shall determine an alternative value for the vehicle.
     (b) conditioned to indemnify a prior owner, lienholder, subsequent purchaser, secured creditor, or encumbrancer of the motor vehicle and any respective successors in interest against expenses, losses, or damages caused by the issuance of the certificate or by a defect in or undisclosed security interest upon the right, title, and interest of the applicant in the vehicle; and
     (c) issued by a surety company authorized to do business in the state.
     (4) Any interested person has a right of action to recover on the bond for a breach of its conditions, but the aggregate liability of the surety to all persons may not exceed the amount of the bond.
     (5) Unless the department has been notified of a pending action to recover the bond, the department shall return the bond at the earlier of:
     (a) 3 years from the date of issuance of the certificate of title; or
     (b) the date of surrender of the valid certificate of title to the department if the vehicle is no longer registered in this state.

     History: En. Sec. 1, Ch. 578, L. 1989; amd. Sec. 8, Ch. 482, L. 1993; amd. Sec. 19, Ch. 496, L. 1997.