2006 Code of Virginia § 55-79.84 - Lien for assessments

55-79.84. Lien for assessments.

A. The unit owners' association shall have a lien on every condominium unitfor unpaid assessments levied against that condominium unit in accordancewith the provisions of this chapter and all lawful provisions of thecondominium instruments. The said lien, once perfected, shall be prior to allother liens and encumbrances except (i) real estate tax liens on thatcondominium unit, (ii) liens and encumbrances recorded prior to therecordation of the declaration, and (iii) sums unpaid on any first mortgagesor first deeds of trust recorded prior to the perfection of said lien forassessments and securing institutional lenders. The provisions of thissubsection shall not affect the priority of mechanics' and materialmen'sliens.

B. Notwithstanding any other provision of this section, or any otherprovision of law requiring documents to be recorded in the miscellaneous lienbooks or the deed books in the clerk's office of any court, on or after July1, 1974, all memoranda of liens arising under this section shall, in thediscretion of the clerk, be recorded in the miscellaneous lien books or thedeed books in such clerk's office. Any such memorandum shall be indexed inthe general index to deeds, and such general index shall identify the lien asa lien for condominium assessments.

C. The unit owners' association, in order to perfect the lien given by thissection, shall file before the expiration of 90 days from the time the firstsuch assessment became due and payable in the clerk's office of the circuitcourt in the county or city in which such condominium is situated, amemorandum, verified by the oath of the principal officer of the unit owners'association, or such other officer or officers as the condominium instrumentsmay specify, which contains the following:

1. A description of the condominium unit in accordance with the provisions of 55-79.47.

2. The name or names of the persons constituting the unit owners of thatcondominium unit.

3. The amount of unpaid assessments currently due or past due together withthe date when each fell due.

4. The date of issuance of the memorandum.

It shall be the duty of the clerk in whose office such memorandum is filed ashereinabove provided to record and index the same as provided in subsectionB, in the names of the persons identified therein as well as in the name ofthe unit owners' association. The cost of recording such memorandum shall betaxed against the person found liable in any judgment or decree enforcingsuch lien.

D. No suit to enforce any lien perfected under subsection C shall be broughtor action to foreclose any lien perfected under subsection I shall beinitiated after 36 months from the time when the memorandum of lien wasrecorded; however, the filing of a petition to enforce any such lien in anysuit wherein such petition may be properly filed shall be regarded as theinstitution of a suit under this section. Nothing herein shall extend thetime within which any such lien may be perfected.

E. The judgment or decree in an action brought pursuant to this section shallinclude, without limitation, reimbursement for costs and attorneys' fees ofthe prevailing party. If the association prevails, it may also recoverinterest at the legal rate for the sums secured by the lien from the timeeach such sum became due and payable.

F. When payment or satisfaction is made of a debt secured by the lienperfected by subsection C, said lien shall be released in accordance with theprovisions of 55-66.3. Any lien which is not so released shall subject thelien creditor to the penalty set forth in subdivision A (1) of 55-66.3. Forthe purposes of that section, the principal officer of the unit owners'association, or such other officer or officers as the condominium instrumentsmay specify, shall be deemed the duly authorized agent of the lien creditor.

G. Nothing in this section shall be construed to prohibit actions at law torecover sums for which subsection A creates a lien, maintainable pursuant to 55-79.53.

H. Any unit owner or purchaser of a condominium unit, having executed acontract for the disposition of the same, shall be entitled upon request to arecordable statement setting forth the amount of unpaid assessments currentlylevied against that unit. Such request shall be in writing, directed to theprincipal officer of the unit owners' association or to such other officer asthe condominium instruments may specify. Failure to furnish or make availablesuch a statement within 10 days of the receipt of such request shallextinguish the lien created by subsection A as to the condominium unitinvolved. Such statement shall be binding on the unit owners' association,the executive organ, and every unit owner. Payment of a fee not exceeding $10may be required as a prerequisite to the issuance of such a statement if thecondominium instruments so provide.

I. At any time after perfecting the lien pursuant to this section, the unitowners' association may sell the unit at public sale, subject to prior liens.For purposes of this section, the unit owners' association shall have thepower both to sell and convey the unit, and shall be deemed the unit owner'sstatutory agent for the purpose of transferring title to the unit. Anonjudicial foreclosure sale shall be conducted in compliance with thefollowing:

1. The unit owners' association shall give notice to the unit owner prior toadvertisement 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 unit owner, by which the debtsecured by the lien must be satisfied; and (iv) that failure to satisfy thedebt secured by the lien on or before the date specified in the notice mayresult in the sale of the unit. The notice shall further inform the unitowner of the right to bring a court action in the circuit court of the countyor city where the condominium is located to assert the nonexistence of a debtor any other defense of the unit owner to the sale.

2. After expiration of the 60-day notice period provided in subdivision 1,the unit owners' association may appoint a trustee to conduct the sale. Theappointment of the trustee shall be filed in the clerk's office of thecircuit court in the county or city in which the condominium is located. Itshall be the duty of the clerk in whose office such appointment is filed torecord and index the same as provided in subsection C, in the names of thepersons identified therein as well as in the name of the unit owners'association. The unit owners' association, at its option, may from time totime remove the trustee and appoint a successor trustee.

3. If the unit owner meets the conditions specified in this subdivision priorto the date of the foreclosure sale, the unit owner shall have the right tohave enforcement of the perfected lien discontinued prior to the sale of theunit. Those conditions are that the unit owner: (a) satisfy the debt securedby lien that is the subject of the nonjudicial foreclosure sale and (b) paysall expenses and costs incurred in perfecting and enforcing the lien,including but not limited to advertising costs and reasonable attorneys' fees.

4. In addition to the advertisement required by subdivision 5, the unitowners' association shall give written notice of the time, date and place ofany proposed sale in execution of the lien, and including the name, addressand telephone number of the trustee, by personal delivery or by mail to (i)the present owner of the property to be sold at his last known address assuch owner and address appear in the records of the unit owners' association,(ii) any lienholder who holds a note against the property 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 unit owners' association shall be in anewspaper having a general circulation in the city or county wherein theproperty to be sold, or any portion thereof, lies pursuant to the followingprovisions:

a. The unit owners' association shall advertise once a week for foursuccessive weeks; however, if the property or some portion thereof is locatedin a city or in a county immediately contiguous to a city, publication of theadvertisement five different days, which may be consecutive days, shall bedeemed adequate. The sale shall be held on any day following the day of thelast advertisement that is no earlier than eight days following the firstadvertisement nor more than 30 days following the last advertisement.

b. Such advertisement shall be placed in that section of the newspaper wherelegal notices appear or where the type of property being sold is generallyadvertised for sale. The advertisement of sale, in addition to such othermatters as the unit owners' association finds appropriate, shall set forth adescription of the property to be sold, which description need not be asextensive as that contained in the deed of trust, but shall identify theproperty by street address, if any, or, if none, shall give the generallocation of the property with reference to streets, routes, or knownlandmarks. Where available, tax map identification may be used but is notrequired. The advertisement shall also include the date, time, place, andterms of sale and the name of the unit owners' association. It shall setforth the name, address and telephone number of the representative, agent, orattorney who may be able to respond to inquiries concerning the sale.

c. In addition to the advertisement required by subdivisions a and b above,the unit owners' association may give such other further and differentadvertisement as the association finds appropriate.

6. In the event of postponement of sale, which postponement shall be at thediscretion of the unit owners' association, advertisement of such postponedsale shall be 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.

8. In the event of a sale, the unit owners' association shall have thefollowing powers and duties:

a. Written one-price bids may be made and shall be received by the trusteefrom the unit owners' association or any person for entry by announcement atthe sale. Any person other than the trustee may bid at the foreclosure sale,including a person who has submitted a written one-price bid. Upon request tothe trustee, any other bidder in attendance at a foreclosure sale shall bepermitted to inspect written bids. Unless otherwise provided in thecondominium instruments, the unit owners' association may bid to purchase theunit at a foreclosure sale. The unit owners' association may own, lease,encumber, exchange, sell or convey the unit. Whenever the written bid of theunit owners' association is the highest bid submitted at the sale, suchwritten bid shall be filed by the trustee with his account of sale requiredunder subdivision I 10 of this section and 26-15. The written bid submittedpursuant to this subsection may be prepared by the unit owners' association,its agent or attorney.

b. The unit owners' association may require of any bidder at any sale a cashdeposit of as much as 10 percent of the sale price before his bid isreceived, which shall be refunded to him if the property is not sold to him.The deposit of the successful bidder shall be applied to his credit atsettlement, or if such bidder fails to complete his purchase promptly, thedeposit shall be applied to pay the costs and expenses of the sale, and thebalance, if any, shall be retained by the unit owners' association inconnection with that sale.

c. The unit owners' association shall receive and receipt for the proceeds ofsale, no purchaser being required to see to the application of the proceeds,and apply the same in the following order: first, to the reasonable expensesof sale, including reasonable attorneys' fees; second, to the satisfaction ofall taxes, levies, and assessments, with costs and interest; third, to thesatisfaction of the lien for the unit 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 unit owner orhis assigns; provided, however, that the association as to such residue shallnot be bound by any inheritance, devise, conveyance, assignment or lien of orupon the unit owner's equity, without actual notice thereof prior todistribution.

9. The trustee shall deliver to the purchaser a trustee's deed conveying theunit with special warranty of title. The trustee shall not be required totake possession of the property prior to the sale thereof or to deliverpossession of the unit to the purchaser at the 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 55-79.74:1 upon the written request ofthe prior unit owner, current unit owner or any holder of a recorded lienagainst the unit at the time of the sale. The unit owners' association shallmaintain a copy of the accounting for at least 12 months following theforeclosure sale.

11. If the sale of a unit is made pursuant to subsection I and the accountingis made by the trustee, the title of the purchaser at such sale shall not bedisturbed unless within 12 months from the confirmation of the accounting bythe commissioner of accounts, the sale is set aside by the court or an appealis allowed by the Supreme Court of Virginia, and a decree is therein enteredrequiring such sale to be set aside.

(1974, c. 416; 1975, c. 415; 1991, c. 497; 1992, c. 72; 1997, cc. 760, 766;2000, c. 906; 2004, cc. 778, 779, 786.)