2006 Code of Virginia § 55-79.72:1 - Termination of condominium

55-79.72:1. Termination of condominium.

A. If there is no unit owner other than the declarant, the declarant mayunilaterally terminate the condominium. An instrument terminating acondominium shall become effective upon recordation thereof if thetermination instrument has been signed by the declarant. But this sectionshall not be construed to nullify, limit, or otherwise affect the validity orenforceability of any agreement renouncing or to renounce, in whole or inpart, the right hereby conferred.

B. Except in the case of a taking of all the units by eminent domain, if anyof the units in the condominium is restricted exclusively to residential useand there is any unit owner other than the declarant, the condominium may beterminated only by the agreement of unit owners of units to which four-fifthsof the votes in the unit owners' association appertain, or such largermajority as the condominium instruments may specify. If none of the units inthe condominium is restricted exclusively to residential use, the condominiuminstruments may specify a majority smaller than the minimum specified in thepreceding sentence.

C. Agreement of the required majority of unit owners to termination of thecondominium shall be evidenced by their execution of a termination agreement,or ratifications thereof, and the same shall become effective when a copy ofthe termination agreement is recorded together with a certification, signedby the principal officer of the unit owners' association or by such otherofficer or officers as the condominium instruments may specify, that therequisite majority of the unit owners signed the termination agreement orratifications thereof. Unless the termination agreement otherwise provides,prior to recordation of the termination agreement, a unit owner's prioragreement to terminate the condominium may be revoked only with the approvalof unit owners of units to which a majority of the votes in the unit owners'association appertain. The termination agreement shall specify a date afterwhich the termination agreement shall be void if the termination agreement isnot recorded. For the purposes of this section, an instrument terminating acondominium and any ratification thereof shall be deemed a condominiuminstrument subject to the provisions of 55-79.49.

D. In the case of a condominium that contains only units having horizontalboundaries described in the condominium instruments, a termination agreementmay provide that all the common elements and units of the condominium shallbe sold following termination. If, pursuant to the termination agreement,any property in the condominium is sold following termination, thetermination agreement shall set forth the minimum terms of the sale.

E. In the case of a condominium that contains any units not having horizontalboundaries described in the condominium instruments, a termination agreementmay provide for sale of the common elements. The termination agreement maynot require that the units be sold following termination, unless thecondominium instruments as originally recorded provide otherwise or all theunit owners consent to the sale. In the case of a master condominium thatcontains a unit which is a part of another condominium, a terminationagreement for the master condominium shall not terminate the othercondominium.

F. On behalf of the unit owners, the unit owners' association may contractfor the disposition of property in the condominium, but the contract shallnot be binding on the unit owners until approved pursuant to subsections Band C of this section. If the termination agreement requires that anyproperty in the condominium be sold following termination, title to theproperty, upon termination, shall vest in the unit owners' association astrustee for the holders of all interest in the units. Thereafter, the unitowners' association shall have powers necessary and appropriate to effect thesale. Until the same has been concluded and the proceeds have beendistributed, the unit owners' association shall continue in existence withall the powers the unit owners' association had before termination. Proceedsof the sale shall be distributed to unit owners and lien holders as theirinterests may appear, in proportion to the respective interests of the unitowners as provided in subsection I of this section. Unless otherwisespecified in the termination agreement, for as long as the unit owners'association holds title to the property, each unit owner or his successor ininterest shall have an exclusive right to occupancy of the portion of theproperty that formerly constituted his unit. During the period of occupancyby the unit owner or his successor in interest, each unit owner or hissuccessor in interest shall remain liable for any assessment or otherobligation imposed on the unit owner by this chapter or the condominiuminstruments.

G. If the property that constitutes the condominium is not sold followingtermination, title to the common elements and, in the case of a condominiumcontaining only units that have horizontal boundaries described in thecondominium instruments, title to all the property in the condominium shallvest in the unit owners, upon termination, as tenants in common in proportionto the unit owners' respective interests as provided in subsection I of thissection. Any liens on the units shall shift accordingly. While the tenancyin common exists, each unit owner or his successor in interest shall have theexclusive right to occupancy of the portion of the property that formerlyconstituted the unit owner's unit.

H. Following termination of the condominium, the proceeds of any sale ofproperty, together with the assets of the unit owners' association, shall beheld by the unit owners' association as trustee for unit owners or lienholders on the units as their interests may appear. Following termination,any creditor of the unit owners' association who holds a lien on the unitthat was recorded before termination may enforce the lien in the same manneras any lien holder. Any other creditor of the unit owners' association shallbe treated as if he had perfected a lien on the units immediately beforetermination.

I. Unless the condominium instruments as originally recorded or as amended by100 percent of the unit owners provide otherwise, the respective interests ofunit owners referred to in subsections F, G, and H shall be as follows:

1. Except as provided in subdivision 2, the respective interests of the unitowners shall be the fair market values of their units, limited commonelements, and common element interests immediately before the termination, asdetermined by one or more independent appraisers selected by the unit owners'association. The decision of the independent appraisers shall be distributedto the unit owners and become final unless disapproved within thirty daysafter distribution by unit owners of units to which one-quarter of the votesin the unit owners' association appertain. The proportion of any unitowner's interest to the interest of all unit owners is determined by dividingthe fair market value of that unit owner's unit and common element interestby the total fair market values of all the units and their common elementinterests.

2. If any unit or limited common element is destroyed to the extent that anappraisal of the fair market value thereof before destruction cannot be made,the interests of all unit owners are the unit owners' respective commonelement interests immediately before the termination.

J. Except as provided in subsection K, foreclosure or enforcement of a lienor encumbrance against the entire condominium shall not alone terminate thecondominium, and foreclosure or enforcement of a lien or encumbrance againsta portion of the condominium, other than withdrawable land, shall notwithdraw that portion from the condominium. Foreclosure or enforcement of alien or encumbrance against withdrawable land shall not alone withdraw theland from the condominium, but the person who takes title to the withdrawableland shall have the right to require from the unit owners' association, uponrequest, an amendment that excludes the land from the condominium.

K. If a lien or encumbrance against a portion of the property that comprisesthe condominium has priority over the condominium instruments and the lien orencumbrance has not been partially released, upon foreclosure, the partiesforeclosing the lien or encumbrance may record an instrument that excludesthe property subject to the lien or encumbrance from the condominium.

(1993, c. 667.)