55-370 - Time-share estate owners' association control liens.
§ 55-370. Time-share estate owners' association control liens.
A. The board of directors of the association shall have the authority toadopt regular annual assessments and to levy periodic special assessmentsagainst each of the time-share estate unit owners and to collect the samefrom such owners according to law, if the purpose in so doing is determinedby the board of directors to be in the best interest of the project and theproceeds are used to pay time-share expenses. In addition, the board ofdirectors of the association shall have the authority to collect, on behalfof the developer or on its own account, the maintenance fee imposed by thedeveloper pursuant to § 55-369. The authority hereby granted and conferredupon the association shall exist notwithstanding any covenants andrestrictions of record applicable to the project stated to the contrary andany such covenants and restrictions are hereby declared void.
B. The developer may provide that it not be obligated to pay all or a portionof any assessment, dues, or other charges of the association, howeverdenominated, passed, or adopted, pursuant to subsection A, if such developerso provides, in bold type, in the time-share instrument for the time-shareestate project. If no such provision exists, the developer shall beresponsible to pay the same assessment, dues, or other charges that atime-share estate owner is obligated to pay for each of its unsoldtime-shares existing at the end of the fiscal year of the association and nomore if the board of directors of the association so determines. In no eventshall either a time-share expense or the dues, assessment, or charges of theassociation discriminate against the developer.
C. The association shall have a lien on every time-share estate within itsproject for unpaid and past due regular or special assessments levied againstthat estate in accordance with the provisions of this chapter and for allunpaid and past due maintenance fees. The exemption created by § 34-4 shallnot be claimed against the debt or lien of the association created by thissection.
The association, in order to perfect the lien given by this subsection, shallfile, before the expiration of four years from the time such special orregular assessment or maintenance fee became due and payable, in the clerk'soffice of the county or city in which the project is situated, a memorandumverified by the oath of any officer of the association or its managing agentand containing the following information:
1. The name and location of the project;
2. The name and address of each owner of the time-share on which the lienexists and a description of the unit in which the time-share is situate;
3. The amount of unpaid and past due special or regular assessments or unpaidand past due maintenance fees applicable to the time-share, together with thedate when each became due;
4. The amount of any other charges owing occasioned by the failure of theowner to pay the assessments or maintenance fees, including late charges,interest, postage and handling, attorneys' fees, recording costs and releasefees;
5. The name, address and telephone number of the association's trustee, ifknown at the time, who will be called upon by the association to foreclose onthe lien upon the owner's failure to pay as provided in this subsection; and
6. The date of issuance of the memorandum.
Notwithstanding any other provision of this chapter, or any other provisionof law requiring documents to be recorded in the deed books of the clerk'soffice of any court, from July 1, 1981, all memoranda of liens arising underthis subsection shall be recorded in the deed books in such clerk's office.Any such memorandum shall be indexed in the general index to deeds, and suchgeneral index shall identify the lien as a lien for time-share estate regularor special assessments or maintenance fees.
It shall be the duty of the clerk in whose office such memorandum shall befiled as provided herein to record and index the same as provided in thissubsection, in the names of the persons identified therein as well as in thename of the time-share estates owners' association. The cost of recordingsuch memorandum shall be taxed against the owner of the time-share on whichthe lien is placed. The filing with the clerk of one memorandum on which islisted two or more delinquent time-share estate unit owners is permitted inorder to perfect the lien hereby allowed and the cost of filing in this eventshall be the clerk's fee as prescribed in subdivision A. 2. of § 17.1-275.
D. At any time after perfecting the lien pursuant to this section, theassociation may sell the time-share estate at public sale, subject to priorliens. For purposes of this section, the association shall have the powerboth to sell and convey the time-share estate, and shall be deemed thetime-share estate owner's statutory agent for the purpose of transferringtitle to the time-share estate. A nonjudicial foreclosure sale shall beconducted by a trustee and in accordance with the following:
1. The association shall give notice to the time-share estate owner, prior toadvertisement, as required by subdivision 4. The notice shall specify (i) thedebt secured by the perfected lien; (ii) the action required to satisfy thedebt secured by the perfected lien; (iii) the date, not less than 60 daysfrom the date the notice is given to the time-share estate owner, by whichthe debt secured by the lien must be satisfied; and (iv) that failure tosatisfy the debt secured by the lien on or before the date specified in thenotice may result in the sale of the time-share estate. The notice shallfurther inform the time-share estate owner of the right to bring a courtaction in the circuit court of the county or city where the time-shareproject is located to assert the nonexistence of a debt or any other defensesof the time-share estate owner to the sale.
2. After expiration of the 60-day notice period provided in subdivision 1,the association may appoint a trustee to conduct the sale. The appointment ofthe trustee shall be filed in the clerk's office of the circuit court in thecounty or city in which the time-share project is located. It shall be theduty of the clerk in whose office such appointment is filed to record andindex the same, as provided in this subsection, in the names of the personsidentified therein as well as in the name of the association. Theassociation, at its option, may from time to time remove the trustee andappoint a successor trustee.
3. If the time-share estate owner meets the conditions specified in thissubdivision prior to the date of the foreclosure sale, the time-share estateowner shall have the right to have enforcement of the perfected liendiscontinued prior to the sale of the time-share estate. Such conditions arethat the time-share estate owner: (i) satisfy the debt secured by lien thatis the subject of the nonjudicial foreclosure sale and (ii) pay all expensesand costs incurred in perfecting and enforcing the lien, including but notlimited to advertising costs and reasonable attorney fees.
4. In addition to the advertisement required by subdivision 5, theassociation shall give written notice of the time, date, and place of anyproposed sale in execution of the lien, including the name, address, andtelephone number of the trustee, by personal delivery or by mail to (i) thepresent owner of the time-share estate to be sold at his last known addressas such owner and address appear in the records of the association, (ii) anylienholder who holds a note against the time-share estate secured by a deedof trust recorded at least 30 days prior to the proposed sale and whoseaddress is recorded with the deed of trust, and (iii) any assignee of such anote secured by a deed of trust provided the assignment and address of theassignee are likewise recorded at least 30 days prior to the proposed sale.Mailing a copy of the advertisement or the notice containing the sameinformation to the owner by certified or registered mail no less than 14 daysprior to such sale and to the lienholders and their assigns, at the addressesnoted in the memorandum of lien, by ordinary mail no less than 14 days priorto such sale shall be a sufficient compliance with the requirement of notice.
5. The advertisement of sale by the association shall be in a newspaperhaving a general circulation in the city or county wherein the time-shareestate to be sold and the time-share project, or any portion thereof, liespursuant to the following provisions:
a. The association shall advertise once a week for four successive weeks;however, if the time-share estate and the time-share project or some portionthereof is located in a city or in a county immediately contiguous to a city,publication of the advertisement five different days, which may beconsecutive days, shall be deemed adequate. The sale shall be held on any dayfollowing the day of the last advertisement that is no earlier than eightdays following the first advertisement nor more than 30 days following thelast advertisement.
b. Such advertisement shall be placed in that section of the newspaper wherelegal notices appear or where the type of time-share estate being sold isgenerally advertised for sale. The advertisement of sale, in addition to suchother matters as the association finds appropriate, shall set forth adescription of the time-share estate to be sold, which description need notbe as extensive as that contained in the deed of trust, but shall identifythe time-share project by street address, if any, or, if none, shall give thegeneral location of such time-share project with reference to streets,routes, or known landmarks with further identification of the time-shareestate to be sold. Where available, tax map identification may be used but isnot required. The advertisement shall also include the date, time, place, andterms of sale and the name of the association. It shall set forth the name,address, and telephone number of the representative, agent, or attorney whomay be able to respond to inquiries concerning the sale.
c. In addition to the advertisement required by subdivisions 5 a and 5 b, theassociation may give such other further and different advertisement as theassociation finds appropriate.
6. In the event of postponement of the sale, which postponement shall be atthe discretion of the association, advertisement of the postponed sale shallbe in the same manner as the original advertisement of sale.
7. Failure to comply with the requirements for advertisement contained inthis section shall, upon petition, render a sale of the property voidable bythe court. Such petition shall be filed within 60 days of the sale or theright to do so shall lapse.
8. In the event of a sale, the association shall have the following powersand duties:
a. The association may sell two or more time-share estates at the sale.Written one-price bids may be made and shall be received by the trustee fromthe association or any person for entry by announcement at the sale. Anyperson other than the trustee may bid at the foreclosure sale, including aperson who has submitted a written one-price bid. Upon request to thetrustee, any other bidder in attendance at a foreclosure sale shall bepermitted to inspect written bids. Unless otherwise provided in thetime-share instrument, the association may bid to purchase the time-shareestate at a foreclosure sale. The association may own, lease, encumber,exchange, sell, or convey the time-share estate. Whenever the written bid ofthe association is the highest bid submitted at the sale, such written bidshall be filed by the trustee with his account of sale required undersubdivision D 10 of this section and § 26-15. The written bid submittedpursuant to this subsection may be prepared by the association, its agent orattorney.
b. The association may require of any bidder at any sale a cash deposit of asmuch as 33.33% of the sale price before his bid is received, which shall berefunded to him if the time-share estate is not sold to him through action ofthe trustee. The deposit of the successful bidder shall be applied to hiscredit at settlement, or if such bidder fails to complete his purchasepromptly, the deposit shall be applied to pay the costs and expenses of thesale, and the balance, if any, shall be retained by the association inconnection with that sale.
c. The association shall receive and receipt for the proceeds of sale, nopurchaser being required to see to the application of the proceeds, and applythe same in the following order: first, to the reasonable expenses of sale,including reasonable attorney fees; second, to the satisfaction of all taxes,levies, and assessments, with costs and interest; third, to the satisfactionof the lien for the time-share estate owners' assessments; fourth, to thesatisfaction in the order of priority of any remaining inferior claims ofrecord; and fifth, to pay the residue of the proceeds to the time-shareestate owner or his assigns; provided, however, that the association as tosuch residue shall not be bound by any inheritance, devise, conveyance,assignment or lien of or upon the unit owner's equity, without actual noticethereof prior to distribution.
9. The trustee shall deliver to the purchaser a trustee's deed conveying thetime-share estate with special warranty of title. The trustee shall not berequired to take possession of the time-share estate prior to the salethereof or to deliver possession of the time-share estate to the purchaser atthe sale.
10. The trustee shall file an accounting of the sale with the commissioner ofaccounts pursuant to § 26-15 and every account of a sale shall be recordedpursuant to § 26-16. In addition, the accounting shall be made available forinspection and copying pursuant to § 55-370.01 upon the written request ofthe prior time-share estate owner, current time-share estate owner, or anyholder of a recorded lien against the time-share estate at the time of thesale. The association shall maintain a copy of the accounting for at least 12months following the foreclosure sale.
11. If the sale of a time-share estate is made pursuant to this subsectionand the accounting is made by the trustee, the title of the purchaser at suchsale shall not be disturbed unless within six months from the date offoreclosure, the sale is set aside by the court or an appeal is allowed bythe Supreme Court of Virginia, and a decree is therein entered requiring suchsale to be set aside.
When payment or satisfaction is made of a debt secured by the lien perfectedby this subsection, such lien shall be released in accordance with theprovisions of § 55-66.3. For the purposes of § 55-66.3, any officer of thetime-share estate owners' association or its managing agent shall be deemedthe duly authorized agent of the lien creditor.
E. The commissioner of accounts to whom an account of sale is returned inconnection with the foreclosure of either a lien under subsection C or apurchase money deed of trust taken back by the developer in the sale of atime-share in order to satisfy § 26-15 shall be entitled to a fee, not toexceed forty-five dollars, on each such sale.
F. Any time-share owner within the project having executed a contract for thedisposition of the time-share, shall be entitled, upon request, to arecordable statement setting forth the amount of unpaid regular or specialassessments or maintenance fees currently levied against that time-share.Such request shall be in writing, directed to the president of the time-shareestate owners' association, and delivered to the principal office of theassociation. Failure of the association to furnish or make available suchstatement within twenty days from the actual receipt of such written requestshall extinguish the lien created by subsection C as to the time-shareinvolved. Payment of a fee reflecting the reasonable cost of materials andlabor, not to exceed the actual cost thereof, may be required as aprerequisite to the issuance of such a statement.
(1981, c. 462; 1985, c. 517; 1989, c. 637; 1991, c. 704; 1993, c. 842; 1994,cc. 432, 580; 1998, c. 460; 2001, c. 543; 2006, c. 653; 2007, c. 267.)