REFILE-Illinois officials order stay on Carvana's temporary license suspension

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(Correct typo in headline)

May 26 (Reuters) - The Illinois Secretary of State's office implemented a stay on Carvana Co's temporary suspension, allowing the online used-car retailer to do business in the state under strict guidelines, a state official said on Thursday.

Carvana would be required to post a $250,000 bond to guarantee payment of any fines or fees incurred by customers that resulted from retailer's failure to follow the law, Illinois Secretary of State spokesman Henry Haupt said.

Carvana did not immediately respond to a Reuters request for comment.

During the stay, Carvana is allowed to sell vehicles to Illinoisans, but cannot issue temporary registration permits or license plates.

It must register titles through Illinois remitters, which are third-party entities licensed in the state to process title transactions, Haupt said.

The announcement comes nearly a week after Carvana's license to sell vehicles in Illinois was suspended over the mishandling of paperwork related to its vehicle sales, according to a state official.

Carvana, best known for its automated car vending machines, laid off about 2,500 employees, or 12% of its workforce earlier this month. (Reporting by Nathan Gomes in Bengaluru)

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