Residential or commercial property and Conveyances" Subtitle IV. Common Interest Communities" Chapter 18. Residential Or Commercial Property Owners' Association Act" Article 3. Operation and Management of Association" § 55.1-1833. Lien for assessments; foreclosure

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§ 55.1-1833. Lien for evaluations; foreclosure.

A. The association will have a lien, when improved, on every lot for unsettled assessments imposed against that lot in accordance with the arrangements of this chapter and all lawful arrangements of the declaration. The lien, once refined, shall be prior to all other subsequent liens and encumbrances other than (i) real estate tax liens on that lot, (ii) liens and encumbrances tape-recorded prior to the recordation of the declaration, and (iii) sums unsettled on and owing under any mortgage or deed of trust tape-recorded prior to the excellence of such lien. The provisions of this subsection shall not affect the top priority of mechanics' and materialmen's liens. Notice of a memorandum of lien to a holder of a credit line deed of trust under § 55.1-318 shall be provided in the exact same fashion as if the association's lien were a judgment.

B. The association, in order to ideal the lien offered by this area, will submit, before the expiration of 12 months from the time the first such evaluation became due and payable in the clerk's workplace of the circuit court in the county or city in which such advancement is located, a memorandum, validated by the oath of the primary officer of the association or such other officer or officers as the statement may specify, which includes the following:

1. The name of the development;

2. A description of the lot;

3. The name or names of the persons constituting the owners of that lot;

4. The amount of unsettled assessments presently due or previous due relative to such lot together with the date when each fell due;

5. The date of issuance of the memorandum;

6. The name of the association and the name and current address of the person to get in touch with to schedule payment or release of the lien; and

7. A statement that the association is getting a lien in accordance with the arrangements of the Residential or commercial property Owners' Association Act as set forth in Chapter 18 ( § 55.1-1800 et seq.) of Title 55.1.

It shall be the responsibility of the clerk in whose office such memorandum is submitted as supplied in this section to record and index the same as offered in subsection D, in the names of the individuals determined in such memorandum as well as in the name of the association. The cost of recording and releasing the memorandum shall be taxed versus the individual found liable in any judgment or order enforcing such lien.

C. Prior to submitting a memorandum of lien, a composed notice shall be sent to the residential or commercial property owner by qualified mail, at the residential or commercial property owner's last known address, notifying the residential or commercial property owner that a memorandum of lien will be submitted in the circuit notary's office of the appropriate county or city. The notice will be sent out at least 10 days before the actual filing date of the memorandum of lien.

D. Notwithstanding any other arrangement of this area or any other provision of law requiring documents to be recorded in the miscellaneous lien books or the deed books in the clerk's office of any court, on or after July 1, 1989, all memoranda of liens emerging under this area will be taped in the deed books in the clerk's office. Any memorandum will be indexed in the general index to deeds, and the general index shall determine the lien as a lien for lot assessments.

E. Any lien perfected pursuant to subsection B may be imposed by filing a civil action to conduct a judicial foreclosure in the circuit court in the county or city where the lot is located or by nonjudicial foreclosure pursuant to subsections I and J. No foreclosure of any lien improved under this section shall be initiated after 120 months from the time when the memorandum of lien was recorded. The filing of a civil action to enforce any such lien by foreclosure through judicial methods or issuance of notice of nonjudicial foreclosure under neighborhood J 1 will be considered as the institution of an action under this area. Nothing in this subsection shall extend the time within which any such lien may be improved.

F. The judgment or order in an action brought pursuant to this section shall include repayment for expenses and sensible attorney charges of the prevailing party. If the association dominates, it may likewise recover interest at the legal rate for the amounts protected by the lien from the time each such sum became due and payable.

G. When payment or complete satisfaction is made of a financial obligation secured by any lien perfected pursuant to subsection B, such lien shall be launched in accordance with the provisions of § 55.1-339. Any lien that is not so released will subject the lien lender to the penalty set forth in subdivision B 1 of § 55.1-339. For the functions of § 55.1-339, the principal officer of the association, or any other officer or officers as the declaration might specify, shall be considered the duly licensed representative of the lien financial institution.

H. Nothing in this area shall be construed to forbid actions at law to recover sums for which subsection A creates a lien, maintainable pursuant to § 55.1-1828.

I. The association may conduct a judicial or nonjudicial foreclosure sale upon a lot versus which the association has perfected several liens pursuant to this area if the total sums secured remain in excess of $5,000, unique of lawyer fees and costs. For functions of this section, the association shall have the power both to offer and convey the lot and shall be deemed the lot owner's statutory representative for the function of transferring title to the lot.

J. A nonjudicial foreclosure sale shall be performed in compliance with the following:

1. The association shall provide notification to the lot owner prior to advertisement required by neighborhood 4. The notice will define (i) the financial obligation secured by the refined lien; (ii) the action needed to satisfy the financial obligation secured by the refined lien; (iii) the date, not less than 60 days from the date the notification is provided to the lot owner, by which the financial obligation protected by the lien should be satisfied; and (iv) that failure to satisfy the financial obligation secured by the lien on or before the date specified in the notice might lead to the sale of the lot. The notification will further notify the lot owner of the right to bring a court action in the circuit court of the county or city where the lot lies to assert the nonexistence of a financial obligation or any other defense of the lot owner to the sale.

2. After expiration of the 60-day notice duration defined in neighborhood 1, the association might appoint a trustee to perform the sale. The consultation of the trustee will be filed in the clerk's office of the circuit court in the county or city in which such advancement is positioned. It will be the task of the clerk in whose office such appointment is filed to tape and index the very same as offered in subsection D, in the names of the individuals determined in such consultation in addition to in the name of the association. The association, at its option, might from time to time eliminate the trustee and designate a follower trustee.

3. If the lot owner satisfies the conditions defined in this neighborhood prior to the date of the foreclosure sale, the lot owner will have the right to have enforcement of the perfected lien ceased prior to the sale of the lot. Those conditions are that the lot owner (i) please the debt protected by lien that is the topic of the nonjudicial foreclosure sale and (ii) pay all expenses and costs sustained in improving and imposing the lien, including advertising expenses and reasonable lawyer charges.

4. In addition to the ad needed by neighborhood 5, the association will provide written notification of the time, date, and place of any proposed sale in execution of the lien, including the name, address, and telephone number of the trustee, by hand delivery or by mail to (i) the present owner of the residential or commercial property to be offered at his last recognized address as such owner and address appear in the records of the association, (ii) any lienholder who holds a note versus the residential or commercial property protected by a deed of trust taped a minimum of 1 month prior to the proposed sale and whose address is recorded with the deed of trust, and (iii) any assignee of such a note secured by a deed of trust, provided that the task and address of the assignee are similarly taped at least thirty days prior to the proposed sale. Mailing a copy of the ad or the notification consisting of the same info to the owner by accredited or signed up mail no less than 2 week prior to such sale and to lienholders and their designates, at the addresses kept in mind in the memorandum of lien, by United States mail, postage prepaid, no less than 14 days prior to such sale, shall be an enough compliance with the requirement of notice.

5. The advertisement of sale by the association shall remain in a paper having a general blood circulation in the county or city in which the residential or commercial property to be offered, or any part of such residential or commercial property, is located pursuant to the list below arrangements:

a. The association shall advertise as soon as a week for four succeeding weeks; however, if the residential or commercial property or some part of such residential or commercial property is situated in a city or in a county instantly adjoining to a city, publication of the advertisement on 5 different days, which may be consecutive days, shall be deemed sufficient. The sale shall be hung on any day following the day of the last ad that is no earlier than eight days following the first ad nor more than 30 days following the last ad.

b. Such ad shall be placed because area of the paper where legal notices appear or where the type of residential or commercial property being sold is typically marketed for sale. The advertisement of sale, in addition to such other matters as the association finds proper, will set forth a description of the residential or commercial property to be sold, which description need not be as substantial as that contained in the deed of trust however will determine the residential or commercial property by street address, if any, or, if none, will provide the general location of the residential or commercial property with referral to streets, paths, or understood landmarks. Where offered, tax map identification might be utilized however is not needed. The ad shall likewise consist of the date, time, place, and terms of sale and the name of the association. It shall set forth the name, address, and phone number of the representative, agent, or lawyer who may have the ability to react to questions concerning the sale.

c. In addition to the advertisement required by subdivisions a and b, the association might even more promote as the association discovers proper.

6. In case of post ponement of sale, which postponement shall be at the discretion of the association, ad of such held off sale will remain in the very same way as the initial advertisement of sale.

7. Failure to comply with the requirements for advertisement consisted of in this section shall, upon petition, render a sale of the residential or commercial property voidable by the court.

8. The association shall have the following powers and responsibilities upon a sale:

a. Written one-price quotes might be made and will be received by the trustee from the association or anyone for entry by statement at the sale. Any individual other than the trustee might bid at the foreclosure sale, consisting of an individual who has submitted a composed one-price bid. Upon demand to the trustee, any other bidder in attendance at a foreclosure sale will be allowed to check written bids. Unless otherwise offered in the statement, the association may bid to acquire the lot at a foreclosure sale. The association might own, rent, encumber, exchange, sell, or convey the lot. Whenever the composed bid of the association is the highest quote sent at the sale, such written quote will be submitted by the trustee with his account of sale required under neighborhood J 10 and § 64.2-1309. The written quote sent pursuant to this subsection may be prepared by the association, its representative, or its lawyer.

b. The association may require any bidder at any sale to publish a money deposit of as much as 10 percent of the sale rate before his quote is gotten, which will be refunded to him if the residential or commercial property is not sold to him. The deposit of the effective bidder shall be applied to his credit at settlement, or, if such bidder stops working to complete his purchase without delay, the deposit will be applied to pay the expenses and costs of the sale, and the balance, if any, shall be maintained by the association in connection with that sale.

c. The association will get and receipt for the proceeds of sale, no purchaser being needed to see to the application of the proceeds, and use the same in the following order: first, to the sensible costs of sale, including lawyer charges; 2nd, to the satisfaction of all taxes, levies, and assessments, with costs and interest; third, to the fulfillment of the lien for the owners' assessments; fourth, to the complete satisfaction in the order of priority of any staying inferior claims of record; and fifth, to pay the residue of the earnings to the owner or his assigns, offered, however, that, regarding the payment of such residue, the association shall not be bound by any inheritance, develop, conveyance, project, or lien of or upon the owner's equity, without real notification thereof prior to distribution.

9. The trustee shall provide to the buyer a trustee's deed communicating the lot with unique warranty of title. The trustee shall not be needed to seize the residential or commercial property prior to the sale of such residential or commercial property or to provide ownership of the lot to the buyer at the sale.

10. The trustee will submit an accounting of the sale with the commissioner of accounts pursuant to § 64.2-1309, and every account of a sale shall be recorded pursuant to § 64.2-1310. In addition, the accounting shall be made available for assessment and copying pursuant to § 55.1-1815 upon the written request of the previous lot owner, the current lot owner, or any holder of a taped lien against the lot at the time of the sale. The association will maintain a copy of the accounting for a minimum of 12 months following the foreclosure sale.

11. If the sale of a lot is made pursuant to subsection I and the accounting is made by the trustee, the title of the purchaser at such sale shall not be disturbed unless within 12 months from the verification of the accounting by the commissioner of accounts the sale is set aside by the court or an appeal is filed in the Court of Appeals or given by the Supreme Court and an order is gotten in needing such sale to be set aside.

1989, c. 679, § 55-516; 1991, c. 667; 1997, cc. 760, 766; 2000, c. 905; 2004, cc. 778, 779, 786; 2019, c. 712; 2021, Sp. Sess. I, c.