State Codes and Statutes
Statutes > Virginia > Title-59-1 > Chapter-36 > 59-1-447-1§ 59.1-447.1. Escrow of deposits.
A. Any deposit made in connection with the execution of a travel servicesagreement shall be held in escrow. All cash deposits shall be held in aseparate bank account labeled and designated solely for that purpose.
Such escrow account shall be insured by an instrumentality of the federalgovernment and located in Virginia. All deposits shall be held in escrowuntil (i) delivered to the travel club upon expiration of the purchaser'scancellation period, provided the purchaser's right of cancellation has notbeen exercised, or (ii) delivered to the travel club because of purchaser'sdefault under the travel services agreement or (iii) refunded to thepurchaser. Failure to establish escrow accounts or to make the deposits asrequired by this section is prima facie evidence of willful violation of thissection.
B. The travel club shall disclose in the travel services agreement that thedeposit may not be held in escrow after expiration of the cancellation periodand that such deposit is not protected as an escrow after expiration of thecancellation period. This disclosure shall include a statement of whether ornot the travel club reserves the option to sell or assign any promissory notegiven by a purchaser to another entity, whether or not such entity isaffiliated with the travel club. Both disclosures shall appear in boldfacetype of a minimum size of ten points.
C. There shall be posted a fidelity bond, written so as to protect alldeposits escrowed pursuant to subsection A, in favor of all purchasers. Thebond shall be in an amount equal to the total of the deposits in escrow atany given time or $25,000, whichever is greater. Such bond shall be filedwith the Commissioner and shall be maintained for so long as the travel cluboffers travel services in Virginia. The bond shall be with a surety companyauthorized to do business in Virginia. The travel club may post cash in lieuof the bond.
(1994, c. 482.)
