Virginia Code 59.1-447.1: Escrow of deposits
A. Any deposit made in connection with the execution of a travel services agreement shall be held in escrow. All cash deposits shall be held in a separate bank account labeled and designated solely for that purpose.
Terms Used In Virginia Code 59.1-447.1
- Commissioner: means the Commissioner of the Department of Agriculture and Consumer Services or his designee. See Virginia Code 59.1-445
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Purchaser: means any person who enters into an agreement in whole or in part within this Commonwealth with a travel club for travel services. See Virginia Code 59.1-445
- Travel club: means a for-profit organization that provides, in return for either an advance fee for membership or an annual charge for membership of more than $100, the privilege for its members or participants to arrange or obtain future travel services through or from the organization. See Virginia Code 59.1-445
- Travel services: means transportation by carrier; accommodations; rental of motor vehicles; or any other service related to travel. See Virginia Code 59.1-445
- Travel services agreement: means the agreement executed in whole or in part in this Commonwealth between the travel club and the purchaser of the membership in such club and does not include arrangements or agreements for specific travel transportation, accommodation or other specific services. See Virginia Code 59.1-445
Such escrow account shall be insured by an instrumentality of the federal government and located in Virginia. All deposits shall be held in escrow until (i) delivered to the travel club upon expiration of the purchaser‘s cancellation period, provided the purchaser’s right of cancellation has not been exercised, or (ii) delivered to the travel club because of purchaser’s default under the travel services agreement or (iii) refunded to the purchaser. Failure to establish escrow accounts or to make the deposits as required by this section is prima facie evidence of willful violation of this section.
B. The travel club shall disclose in the travel services agreement that the deposit may not be held in escrow after expiration of the cancellation period and that such deposit is not protected as an escrow after expiration of the cancellation period. This disclosure shall include a statement of whether or not the travel club reserves the option to sell or assign any promissory note given by a purchaser to another entity, whether or not such entity is affiliated with the travel club. Both disclosures shall appear in boldface type of a minimum size of ten points.
C. There shall be posted a fidelity bond, written so as to protect all deposits escrowed pursuant to subsection A, in favor of all purchasers. The bond shall be in an amount equal to the total of the deposits in escrow at any given time or $25,000, whichever is greater. Such bond shall be filed with the Commissioner and shall be maintained for so long as the travel club offers travel services in Virginia. The bond shall be with a surety company authorized to do business in Virginia. The travel club may post cash in lieu of the bond.
1994, c. 482.