Is there anything in particular about the surety bond that the law requires?
Yes, Nevada Revised Statutes Chapter 240A.120 provides specifics regarding the bond. It states that a registrant shall file with the Secretary of State a cash bond or surety bond in the penal sum of $50,000 which is approved to form by the Attorney General and conditioned to provide:
(a) Indemnification to a client or any other person who is determined in an action or proceeding to have suffered damage as a result of:
(1) An act or omission of the registrant, or an agent or employee of the registrant, which violates a provision of this chapter or a regulation or order adopted or issued pursuant thereto;
(2) A wrongful failure or refusal by the registrant, or an agent or employee of the registrant, to provide services in accordance with a contract entered into pursuant to NRS 240A.190;
(3) The fraud, dishonesty, negligence or other wrongful conduct of the registrant or an agent or employee of the registrant; or
(4) An act or omission of the registrant in violation of any other federal or state law for which the return of fees, an award of damages or the imposition of sanctions have been awarded by a court of competent jurisdiction in this State; or
(b) Payment to the Secretary of State for any civil penalty or award of attorney’s fees or costs of suit owing and unpaid by the registrant to the Secretary of State pursuant to this chapter.
What does approved to form by the Attorney General as required in Nevada Revised Statute 240A.120 mean?
The Nevada Attorney General’s office has provided the following guidance for a surety bond issued to a document preparation service. “Approved as to form” means the bond contains the following or similarly equivalent language:
KNOW ALL MEN BY THESE PRESENTS,
That we, _____________________________ (name of document preparer) of ________________________________________________ (address of document preparer) , as Principal, and ___ , (name of surety), a corporation (or LLC, LLP, etc.) duly licensed to do business in the State of Nevada, as Surety, are held and firmly bound unto the State of Nevada, in the penal sum of, and for the purposes set out in NRS 240A.120, FIFTY THOUSAND UNITED STATES DOLLARS ($50,000.00 USD) , for the payment of which sum, well and truly to be made, we bind ourselves, our legal representatives, heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents.
WHEREAS, said Principal has been registered or has applied to be registered by the Secretary of State of the State of Nevada as a Document Preparation Service pursuant to NRS Chapter 240A; and,
NOW THEREFORE if said Principal shall well, truly and faithfully perform all the requirements and duties of a registered Document Preparation Service now required by law or regulation to be performed on his or her part, and shall well, truly and faithfully execute and perform all the duties of a registered Document Preparation Service required by any law or regulation to be enacted subsequently to the execution of this bond, then this obligation shall be null and void, otherwise it shall remain in full force and effect.
SIGNED AND SEALED, this day of ____________________, 20____.
(Document Preparer) (Surety)
By: ________________________________________ ________________________________________
Nevada Resident Agent
(SEAL AND NOTARIAL ACKNOWLEDGMENT OF SURETY)
What is the cost of the surety bond?
The Secretary of State does not regulate the price for securing a bond. The price is set by the marketplace and the surety companies who issue the bonds.
How long is the bond in effect?
The bond must cover the period of the registration of the registrant, except when the surety is released in accordance with this section. A registrant must maintain a bond while the registration is in effect or while a proceeding to suspend or revoke a registration is pending.
What happens if the bond is exhausted?
If the penal sum of the bond is exhausted, the surety shall give written notice to the Secretary of State and the registrant within 30 days after its exhaustion.
When may a bond be released?
The surety may be released after giving 30 days’ written notice to the Secretary of State and the registrant, but the release does not discharge or otherwise affect any claim resulting from an act or omission which is alleged to have occurred while the bond was in effect.
Last updated: 11/18/2015 11:51:39 AM