Code of the District of Columbia

§ 50–603. Bonding of automobile dealers and applicants; liability insurance; designation of Mayor as agent for service of process; limitation on bonds; action on bonds.

(a) In connection with the licensing of persons under the authority of Chapter 28 of Title 47, the Council of the District of Columbia is authorized to require either bonds or such other security as it may by regulation deem necessary, of persons licensed to engage in the business of buying or selling motor vehicles and of persons licensed to engage in the business of purchasing contracts for the retail installment sales of motor vehicles, and the Council may, from time to time, and in its discretion, establish classes and subclasses of such persons and, subject to subsection (b) of this section, specify the amount and conditions of the bond to be deposited by each of the members of any such class or subclass. In connection with the licensing of said persons, and the bonding of the members of any class or subclass of the said persons, the Council, in its discretion, may by regulation require applicants for licenses:

(1) To furnish and keep in force a bond running to the District, or other security, to protect members of the public against financial loss by reason of the failure of the licensee or of any officer, agent, employee, or other person acting on behalf of said licensee, to observe any law or regulation in force in the District of Columbia applicable to the licensee’s conduct of the licensed business;

(2) To procure and keep in force public liability insurance or property damage insurance, or both; and

(3) To appoint the Mayor as their true and lawful attorney upon whom all judicial and other process or legal notice directed to such person may be served.

(b)(1) The bonds authorized by this section shall be corporate surety bonds in amounts to be fixed by the Mayor, but no bond shall exceed $25,000, except as required by paragraph (2) of this subsection.

(2) Each person licensed to do business as a motor vehicle dealer in the District shall maintain a corporate surety bond in an amount not less than $25,000.

(3) The bond shall be conditioned upon the observance by the licensee and any officer, agent, employee, or other person acting on behalf of the licensee, of all laws and regulations in force in the District applicable to the licensee’s conduct of the licensed business, for the benefit of any person who may suffer damages resulting from the violation of any law or regulation by or on the part of the licensee or any officer, agent, employee, or other person acting on behalf of the licensee.

(c) Any person aggrieved by the violation of any law or regulation applicable to the licensee’s conduct of the licensed activity shall have, in addition to his right of action against such licensee, a right to bring suit against the surety on a bond authorized by this section, either alone or jointly with the principal thereon, and to recover in an amount not exceeding the penalty of the bond any damages sustained by reason of any act, transaction, or conduct of the licensee, or of any officer, agent, employee, or other person acting on behalf of said licensee, which is in violation of law or regulation in force in the District relating to the licensed activity. The provisions of paragraphs (2), (3), and (5) of subsection (b) of § 1-301.01, shall be applicable to each bond authorized by this section as if it were the bond authorized by the first subparagraph of such subsection (b) of § 1-301.01; provided, that nothing in this subsection shall be construed to impose upon the surety on any such bond a greater liability than the total amount thereof or the amount remaining unextinguished after any prior recovery or recoveries.


(Apr. 22, 1960, 74 Stat. 71, Pub. L. 86-431, § 3; Mar. 14, 1985, D.C. Law 5-162, § 7, 32 DCR 160.)

Prior Codifications

1981 Ed., § 40-1103.

1973 Ed., § 40-903.

Cross References

Automobile consumer protection, see § 50-501 et seq.

Change in Government

This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402(315) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in § 406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818, § 711 ( D.C. Code, § 1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to § 714(a) of such Act ( D.C. Code, § 1-207.14(a)), appropriate changes in terminology were made in this section.