§ 34-14A-15 — Recovery Fund

Alabama § 34-14A-15

• Jurisdiction: Alabama
• Title 34: Professions and Businesses
• Ch. 14A: Home Building and Home Improvement Industries
• Art. 1: Home Builders Licensure Board

Text

(a) The board may establish a Homeowners’ Recovery Fund for the purpose of consumer protection, consumer education, and consumer awareness. An aggrieved homeowner may recover actual economic damages, not including interest and court costs, sustained within the state as the direct result of conduct of a licensee in violation of this chapter or the rules of the board from the Homeowners’ Recovery Fund. Any payments from the Homeowners’ Recovery Fund shall be subject to the following limitations and conditions:
(1) The Homeowners’ Recovery Fund shall make payments only to homeowners who file a complaint with the board pursuant to the requirements of subsection (b) of Section 34-14A-8.
(2) The Homeowners’ Recovery Fund shall not make payments based on consent judgments.
(3) Failure of the homeowner to follow any provisions of this chapter shall preclude payment from the Homeowners’ Recovery Fund.
(b) The board, by rule, shall determine the maximum amount of payment from the Homeowners’ Recovery Fund for the following:
(1) Payments for claims based on judgments or settlements against any one licensee.
(2) Payments for claims arising out of the same transaction.
(c) Each licensee shall, on order of the board, pay a fee not to exceed sixty dollars ($60), no more than once a year, per licensee for deposit in the Homeowners’ Recovery Fund. A licensee on inactive status shall not be required to contribute to the Homeowners’ Recovery Fund. The annual Homeowners’ Recovery Fund fee shall be set by the board after considering all expenses incurred by the board in defending, satisfying, or settling any claims paid from the Homeowners’ Recovery Fund.
(d)(1) When a complaint is filed in a court of competent jurisdiction that may result in liability for the Homeowners’ Recovery Fund, the complainant shall notify the board in writing, by certified mail, when the action is commenced.
(2) When the notice is received, the board may enter an appearance, file pleadings, appear at court hearings, and defend or take action it deems appropriate either on behalf and in the name of the defendant or in its own name. The board may seek any appropriate method of judicial review. The board may settle or compromise the claim. Any expenses incurred by the board in defending, satisfying, or settling any claim may be paid from the Homeowners’ Recovery Fund.
(3) When a complainant obtains a valid judgment, excluding consent judgments, in a court of competent jurisdiction against a licensee, the aggrieved homeowner may, when the judgment is final, file a verified claim in the court in which the judgment was entered and, on 30 days’ written notice to the board, may apply to the court for an order directing payment out of the Homeowners’ Recovery Fund of the amount remaining unpaid on the judgment.
(4) The court shall proceed on such application and the complainant shall be required to show that:
a. He or she is not the spouse, child, or parent of the debtor, or the personal representative of the spouse, child, or parent or a shareholder, officer, or director of the debtor.
b. He or she has obtained a judgment, as described in this section, stating the amount of the judgment and the amount owing on the judgment at the date of the application, and, that in such action, he or she had joined any and all bonding companies which issued corporate surety bonds to the judgment debtor as principal and all other necessary parties.
c. The following items, if recovered by him or her, have been applied to the actual compensatory damages awarded by the court:
1. Any amount recovered from the judgment debtor.
2. Any amount recovered from bonding companies.
3. Any amount recovered in out-of-court settlements.
(5) The court shall order the Homeowners’ Recovery Fund to pay the sum it finds due, subject to the provisions and limitations of this section.
(e) In the event the board pays from the Homeowners’ Recovery Fund any amount in settlement of a claim or toward satisfaction of a judgment against a licensee, the board may revoke the license of the licensee and may no longer recognize the experience and ability qualifications of the individual licensee or the qualifying representative of the licensee for licensing purposes. The board may refuse to issue a new license to the former licensee or to recognize the experience and ability qualifications of the individual former licensee or the former licensee’s qualifying representative until the former licensee or the former licensee’s qualifying representative has repaid in full, plus interest at the rate of 12 percent per annum, the amount paid from the Homeowners’ Recovery Fund. A discharge in bankruptcy shall not relieve a person from the penalties and disabilities provided in this section.
(f) If the balance in the Homeowners’ Recovery Fund is insufficient to satisfy a duly authorized claim or portion of a claim, the board shall, when sufficient money has been deposited in the Homeowners’ Recovery Fund, satisfy the unpaid claims in the order that the claims were filed.
(g) The sums received by the board, pursuant to the provisions of this section, shall be deposited into the State Treasury and held in a special fund to be known as the Homeowners’ Recovery Fund, and shall be held by the board in trust for carrying out the purposes of the Homeowners’ Recovery Fund. These sums may be invested by the State Treasurer in any investments which are legal under the laws of this state. Any interest or other income from investments of the Homeowners’ Recovery Fund shall be deposited into the Homeowners’ Recovery Fund.
(h) When, on order of the court, the board has paid from the Homeowners’ Recovery Fund any sum, the board shall be subrogated to all the rights of the judgment creditor, and all his or her rights, title, and interest in the judgment, to the extent of the amount paid from the Homeowners’ Recovery Fund, shall be assigned to the board. Any amount and interest recovered by the board on the judgment shall be deposited into the Homeowners’ Recovery Fund.
(i) The limitations and conditions of payment from the Homeowners’ Recovery Fund, as established by Act 2002-72, shall not apply in any case where, prior to May 1, 2002, a complainant has obtained a valid judgment in a court of competent jurisdiction against a licensee on the grounds set out in this chapter.

Legislative History

(Acts 1992, No. 92-608, p. 1282, §15; Acts 1997, No. 97-250, p. 457, §3; Act 2002-72, p. 163, §1; Act 2006-105, p. 136, §1; Act 2018-143, §1.)