54.1-2114 - Recovery from fund generally.
§ 54.1-2114. Recovery from fund generally.
A. Whenever any person is awarded a final judgment in any court of competentjurisdiction in the Commonwealth of Virginia against any individual or entityfor improper or dishonest conduct as defined in the act, and the improper ordishonest conduct occurred during a period when the individual or entity wasa regulant and occurred in connection with a transaction involving the sale,lease, or management of real property by the regulant acting in the capacityof a real estate broker or real estate salesperson and not in the capacity ofa principal, or on his own account, the person to whom such judgment wasawarded may file a verified claim with the Director for a directive orderingpayment from the fund of the amount unpaid upon the judgment, subject to thefollowing conditions:
1. If any action is instituted against a regulant by any person, such personshall serve a copy of the process upon the Board in the manner prescribed bylaw. Included in such service shall be an affidavit stating all actsconstituting improper or dishonest conduct. The provisions of § 8.01-288shall not be applicable to the service of process required by thissubdivision.
2. A copy of any pleading or document filed subsequent to the initial serviceof process in the action against a regulant shall be provided to the Board.The claimant shall submit such copies to the Board by certified mail, or theequivalent, upon his receipt of the pleading or document.
3. For judgments entered on or after July 1, 1996, the verified claim shallbe filed with the Director no later than twelve months after the judgmentbecomes final.
4. The claimant shall not himself be (i) a regulant, (ii) the personalrepresentative of a regulant, (iii) the spouse or child of the regulantagainst whom the judgment was awarded, nor the personal representative ofsuch spouse or child, or (iv) any lending or financial institution nor anyonewhose business involves the construction or development of real property.
5. The claimant shall have made an investigation to determine whether or notthe judgment debtor is possessed of real or personal property or other assetswhich are available to be sold or otherwise applied in satisfaction of thejudgment and shall file an affidavit that an investigation has been made.Satisfactory evidence of the results of subdivision 6 below shall besubmitted with this affidavit.
6. The investigation shall include but shall not be limited to (i) theconducting of debtor interrogatories and (ii) the investigation of anylistings held by the regulant and any commissions due thereby.
7. The investigation shall not have disclosed such real or personal propertyor other assets available to be so sold or applied, or the investigationshall have disclosed certain of such assets, which shall be described indetail, and the claimant shall have taken all legally available actions andproceedings for such sale or application, and the amount so realized shallhave been insufficient to satisfy the judgment, which amount shall be statedtogether with the balance remaining due on the judgment after the sale orapplication.
8. If the judgment debtor has filed bankruptcy, the claimant shall file withthe proper bankruptcy court a complaint under 11 U.S.C. § 523 (a) and obtainan order determining dischargeability of the debt.
B. The Department shall promptly consider the application, affidavit, andinvestigation of the claim. If it appears that a prima facie case has beenmade for payment of the claim, the Department shall provide the regulant witha notice offering the opportunity to be heard at an informal fact-findingconference pursuant to § 2.2-4019 of the Administrative Process Act (§2.2-4000, et seq.). Such notice shall state that if the regulant does notrequest an informal fact-finding conference within 30 days, with three daysadded in instances where the notice is sent by mail, the Department shallpresent the claim to the Board with a recommendation to pay the verifiedclaim.
C. If the Board finds that there has been compliance with the statutoryconditions to which reference is made in this section, the Board shall issuea directive ordering payment to the claimant from the fund the amount unpaidon the judgment, subject to the limitations set forth in § 54.1-2116. Theclaimant shall be notified in writing of the findings of the Board. TheBoard's findings shall be considered a "case decision" and judicial reviewof these findings shall be in accordance with § 2.2-4025 of theAdministrative Process Act (§ 2.2-4000 et seq.). Notwithstanding any otherprovision of law, the Board shall have the right to appeal a decision of anycourt which is contrary to any distribution recommended or authorized by it.
(1977, c. 69, § 54-765.4; 1984, c. 266; 1987, c. 555; 1988, c. 765; 1996, c.115; 2006, c. 723.)