August 2013: Billing and Collections
As we continue our efforts to educate the truck brokers of our industry, we will be reaching out to CCTA members to help those who are trying to comply with the broker bond requirements and to identify those who refuse to play by the same rules.
If any of you know of any non-bonded brokers who are brokering trucks or suspect they may not be bonded, please contact the CCTA office at 909-982-9898 or Rudy Navarrete at 909-329-5673. We will send a warning letter to these individuals. We also encourage you all to notify general contractors for whom these non-bonded brokers may be are working.
Many of our members have had great success in collecting past due monies by using the broker bond as leverage. This is the warning letter that will be sent out to potential offenders.
RE: Failure to Comply with Statutory Bonding Requirement
It has come to our attention that you are a broker of construction services who may be illegally conducting business without the necessary surety bond. Any failure to obtain and post the required surety bond is a misdemeanor that could subject you to a fine of up to $5,000. It also could subject you to civil litigation.
California Vehicle Code section 34510.5 requires all brokers of construction services to secure a $15,000 surety bond from an admitted surety insurer. In addition, brokers are required to post that bond on either their own website, or on a website administered by a third-party nonprofit organization related to the industry.
To date, it appears you have not obtained the bond, or, if you have, you have failed to post it as required by law.
If you have already obtained your bond, CCTA will be happy to post it on the CCTA website at no charge. Please contact me at your convenience to make arrangements for the posting.
In addition to the foregoing bonding and posting requirements, the law also requires brokers to annually provide written evidence of their valid surety bond every calendar year to each hired motor carrier and to each person that hires or engages the broker.
Written evidence includes a copy of the surety bond, a certificate of insurance, a continuation certificate, or other similar documentation originally issued from the surety that includes the surety’s and broker’s name, the bond number, and the effective and expiration dates of the bond.
In addition to the criminal penalties outlined above, brokers who fail to comply with this law may be subject to suit by other brokers under California’s Unfair Competition Law.