How are claims filed against the bond resolved if they exceed the bond amount?

The resolution of claims that exceed the bond amount is addressed through a pro-rata distribution of the proceeds. This means that if the total amount of claims exceeds the available funds in the bond, each claimant receives a proportionate share of the bond based on the amount of their claim relative to the total claims made. This method ensures that all valid claims are addressed to some extent, even when the bond amount is insufficient to fully cover them.

This approach is fair and equitable because it prevents favoritism or arbitrary decisions that might arise from other methods, such as prioritizing claims based solely on severity or randomly splitting funds. Instead, the pro-rata system effectively acknowledges the financial limits of the bond while maintaining a level of accountability for the manufactured home dealer's obligations. Therefore, in situations where the bond is unable to cover the entire amount requested by all claimants, distributing proceeds in this manner helps manage the claims in a structured way.