{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/54.1-2353.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/54.1-2353.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/54.1-2353.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/54.1-2353.html"}],"law_id":54774,"edition_id":1,"section_id":54774,"structure_id":13764,"section_number":"54.1-2353","catch_line":"Protection of the interests of associations; appointment of receiver for common interest community manager","history":"2008, cc. 851, 871; 2011, cc. 334, 605; 2019, c. 712; 2025, c. 105.","full_text":"A\n\nA common interest community manager owes a fiduciary duty to the associations to which it provides management services with respect to the manager’s handling the funds or the records of each association. All funds deposited with the common interest community manager shall be handled in a fiduciary capacity and shall be kept in a separate fiduciary trust account or accounts in an FDIC-insured financial institution separate from the assets of the common interest community manager. The funds shall be the property of the association and shall be segregated for each depository in the records of the common interest community manager in a manner that permits the funds to be identified on an association basis. The common interest community manager shall transfer and release all funds and close bank accounts maintained on behalf of an association within a reasonable time after termination of the contract for management services without additional cost to the association.B\n\nAll records having administrative or fiscal value to the association that a common interest community manager holds, maintains, compiles, or generates on behalf of a common interest community are the property of the association. A common interest community manager may retain and dispose of association records in accordance with a policy contained in the contract between the common interest community manager and the association. Within a reasonable time after a written request for any such records, the common interest community manager shall provide copies of the requested records to the association at the association’s expense. The common interest community manager shall return all association records that it retains and any originals of legal instruments or official documents that are in the possession of the common interest community manager to the association within a reasonable time after termination of the contract for management services without additional cost to the association. Records maintained in electronic format may be returned in such format.C\n\nIf the Board has reasonable cause to believe that a common interest community manager is unable to properly discharge its fiduciary responsibilities to an association to which it provides management services, the Board may submit an ex parte petition to the circuit court of the city or county wherein the common interest community manager maintains an office or is doing business for the issuance of an order authorizing the immediate inspection by and production to representatives of the petitioner of any records, documents, and physical or other evidence belonging to the subject common interest community manager. The court may issue such order without notice to the common interest community manager if the petition, supported by affidavit of the petitioner and such other evidence as the court may require, shows reasonable cause to believe that such action is required to prevent immediate loss of property of one or more of the associations to which the subject common interest community manager provides management services. The court may also temporarily enjoin further activity by the common interest community manager and take such further action as shall be necessary to conserve, protect, and disburse the funds involved, including the appointment of a receiver. The papers filed with the court pursuant to this subsection shall be placed under seal.D\n\nIf the Board has reasonable cause to believe that a common interest community manager is unable to properly discharge its fiduciary responsibilities to an association to which it provides management services, the Board may file a petition with the circuit court of the county or city wherein the subject common interest community manager maintains an office or is doing business. The petition may seek the following relief: (i) an injunction prohibiting the withdrawal of any bank deposits or the disposition of any other assets belonging to or subject to the control of the subject common interest community manager and (ii) the appointment of a receiver for all or part of the funds or property of the subject common interest community manager. The subject common interest community manager shall be given notice of the time and place of the hearing on the petition and an opportunity to offer evidence. The court, in its discretion, may require a receiver appointed pursuant to this section to post bond, with or without surety. The papers filed with the court under this subsection shall be placed under seal until such time as the court grants an injunction or appoints a receiver. The court may issue an injunction, appoint a receiver, or provide such other relief as the court may consider proper if, after a hearing, the court finds that such relief is necessary or appropriate to prevent loss of property of one or more of the associations to which the subject common interest community manager provides management services.E\n\nIn any proceeding under subsection D, any person or entity known to the Board to be indebted to or having in his possession property, real or personal, belonging to or subject to the control of the subject common interest community manager’s business and which property the Board reasonably believes may become part of the receivership assets shall be served with a copy of the petition and notice of the time and place of the hearing.F\n\nThe court shall describe the powers and duties of the receiver in its appointing order, which may be amended from time to time. The receiver shall, unless otherwise ordered by the court in the appointing order, (i) prepare and file with the Board a list of all associations managed by the subject common interest community manager; (ii) notify in writing all of the associations to which the subject common interest community manager provides management services of the appointment and take whatever action the receiver deems appropriate to protect the interests of the associations until such time as the associations have had an opportunity to obtain a successor common interest community manager; (iii) facilitate the transfer of records and information to such successor common interest community manager; (iv) identify and take control of all bank accounts, including without limitation trust and operating accounts, over which the subject common interest community manager had signatory authority in connection with its management business; (v) prepare and submit an accounting of receipts and disbursements and account balances of all funds under the receiver’s control for submission to the court within four months of the appointment and annually thereafter until the receivership is terminated by the court; (vi) attempt to collect any accounts receivable related to the subject common interest community manager’s business; (vii) identify and attempt to recover any assets wrongfully diverted from the subject common interest community manager’s business, or assets acquired with funds wrongfully diverted from the subject common interest community manager’s business; (viii) terminate the subject common interest community manager’s business; (ix) reduce to cash all of the assets of the subject common interest community manager; (x) determine the nature and amount of all claims of creditors of the subject common interest community manager, including associations to which the subject common interest community manager provided management services; and (xi) prepare and file with the court a report of such assets and claims proposing a plan for the distribution of funds in the receivership to such creditors in accordance with the provisions of subsection G.G\n\nUpon the court’s approval of the receiver’s report referenced in subsection F, at a hearing after such notice as the court may require to creditors, the receiver shall distribute the assets of the common interest community manager and funds in the receivership first to clients whose funds were or ought to have been held in a fiduciary capacity by the subject common interest community manager, then to the receiver for fees, costs, and expenses awarded pursuant to subsection H, and thereafter to the creditors of the subject common interest community manager, and then to the subject common interest community manager or its successors in interest.H\n\nA receiver appointed pursuant to this section shall be entitled, upon proper application to the court in which the appointment was made, to recover an award of reasonable fees, costs, and expenses. If there are not sufficient nonfiduciary funds to pay the award, then the shortfall shall be paid by the Common Interest Community Management Recovery Fund as a cost of administering the Fund pursuant to § 54.1-2354.5, to the extent that the said Fund has funds available. The Fund shall have a claim against the subject common interest community manager for the amount paid.I\n\nThe court may determine whether any assets under the receiver’s control should be returned to the subject common interest community manager.J\n\nIf the Board shall find that any common interest community manager is insolvent, that its merger into another common interest community manager is desirable for the protection of the associations to which such common interest community manager provides management services, and that an emergency exists, and, if the board of directors of such insolvent common interest community manager shall approve a plan of merger of such common interest community manager into another common interest community manager, compliance with the requirements of § 13.1-718 shall be dispensed with as to such insolvent common interest community manager and the approval by the Board of such plan of merger shall be the equivalent of approval by the holders of more than two-thirds of the outstanding shares of such insolvent common interest community manager for all purposes of Article 12 (§ 13.1-715.1 et seq.) of Chapter 9 of Title 13.1. If the Board finds that a common interest community manager is insolvent, that the acquisition of its assets by another common interest community manager is in the best interests of the associations to which such common interest community manager provides management services, and that an emergency exists, it may, with the consent of the boards of directors of both common interest community managers as to the terms and conditions of such transfer, including the assumption of all or certain liabilities, enter an order transferring some or all of the assets of such insolvent common interest community manager to such other common interest community manager, and no compliance with the provisions of §§ 13.1-723 and 13.1-724 shall be required, nor shall §§ 13.1-730 through 13.1-741 be applicable to such transfer. In the case either of such a merger or of such a sale of assets, the Board shall provide that prompt notice of its finding of insolvency and of the merger or sale of assets be sent to the stockholders of record of the insolvent common interest community manager for the purpose of providing such shareholders an opportunity to challenge the finding that the common interest community manager is insolvent. The relevant books and records of such insolvent common interest community manager shall remain intact and be made available to such shareholders for a period of 30 days after such notice is sent. The Board’s finding of insolvency shall become final if a hearing before the Board is not requested by any such shareholder within such 30-day period. If, after such hearing, the Board finds that such common interest community manager was solvent, it shall rescind its order entered pursuant to this subsection and the merger or transfer of assets shall be rescinded. But if, after such hearing, the Board finds that such common interest community manager was insolvent, its order shall be final.K\n\nThe provisions of this article are declared to be remedial. The purpose of this article is to protect the interests of associations adversely affected by common interest community managers who have breached their fiduciary duty. The provisions of this article shall be liberally administered in order to protect those interests and thereby the public’s interest in the quality of management services provided by Virginia common interest community managers.","order_by":null,"text":{"0":{"id":201034,"text":"A common interest community manager owes a fiduciary duty to the associations to which it provides management services with respect to the manager’s handling the funds or the records of each association. All funds deposited with the common interest community manager shall be handled in a fiduciary capacity and shall be kept in a separate fiduciary trust account or accounts in an FDIC-insured financial institution separate from the assets of the common interest community manager. The funds shall be the property of the association and shall be segregated for each depository in the records of the common interest community manager in a manner that permits the funds to be identified on an association basis. The common interest community manager shall transfer and release all funds and close bank accounts maintained on behalf of an association within a reasonable time after termination of the contract for management services without additional cost to the association.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":201035,"text":"All records having administrative or fiscal value to the association that a common interest community manager holds, maintains, compiles, or generates on behalf of a common interest community are the property of the association. A common interest community manager may retain and dispose of association records in accordance with a policy contained in the contract between the common interest community manager and the association. Within a reasonable time after a written request for any such records, the common interest community manager shall provide copies of the requested records to the association at the association’s expense. The common interest community manager shall return all association records that it retains and any originals of legal instruments or official documents that are in the possession of the common interest community manager to the association within a reasonable time after termination of the contract for management services without additional cost to the association. Records maintained in electronic format may be returned in such format.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":201036,"text":"If the Board has reasonable cause to believe that a common interest community manager is unable to properly discharge its fiduciary responsibilities to an association to which it provides management services, the Board may submit an ex parte petition to the circuit court of the city or county wherein the common interest community manager maintains an office or is doing business for the issuance of an order authorizing the immediate inspection by and production to representatives of the petitioner of any records, documents, and physical or other evidence belonging to the subject common interest community manager. The court may issue such order without notice to the common interest community manager if the petition, supported by affidavit of the petitioner and such other evidence as the court may require, shows reasonable cause to believe that such action is required to prevent immediate loss of property of one or more of the associations to which the subject common interest community manager provides management services. The court may also temporarily enjoin further activity by the common interest community manager and take such further action as shall be necessary to conserve, protect, and disburse the funds involved, including the appointment of a receiver. The papers filed with the court pursuant to this subsection shall be placed under seal.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"3":{"id":201037,"text":"If the Board has reasonable cause to believe that a common interest community manager is unable to properly discharge its fiduciary responsibilities to an association to which it provides management services, the Board may file a petition with the circuit court of the county or city wherein the subject common interest community manager maintains an office or is doing business. The petition may seek the following relief: (i) an injunction prohibiting the withdrawal of any bank deposits or the disposition of any other assets belonging to or subject to the control of the subject common interest community manager and (ii) the appointment of a receiver for all or part of the funds or property of the subject common interest community manager. The subject common interest community manager shall be given notice of the time and place of the hearing on the petition and an opportunity to offer evidence. The court, in its discretion, may require a receiver appointed pursuant to this section to post bond, with or without surety. The papers filed with the court under this subsection shall be placed under seal until such time as the court grants an injunction or appoints a receiver. The court may issue an injunction, appoint a receiver, or provide such other relief as the court may consider proper if, after a hearing, the court finds that such relief is necessary or appropriate to prevent loss of property of one or more of the associations to which the subject common interest community manager provides management services.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"4":{"id":201038,"text":"In any proceeding under subsection D, any person or entity known to the Board to be indebted to or having in his possession property, real or personal, belonging to or subject to the control of the subject common interest community manager’s business and which property the Board reasonably believes may become part of the receivership assets shall be served with a copy of the petition and notice of the time and place of the hearing.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"5":{"id":201039,"text":"The court shall describe the powers and duties of the receiver in its appointing order, which may be amended from time to time. The receiver shall, unless otherwise ordered by the court in the appointing order, (i) prepare and file with the Board a list of all associations managed by the subject common interest community manager; (ii) notify in writing all of the associations to which the subject common interest community manager provides management services of the appointment and take whatever action the receiver deems appropriate to protect the interests of the associations until such time as the associations have had an opportunity to obtain a successor common interest community manager; (iii) facilitate the transfer of records and information to such successor common interest community manager; (iv) identify and take control of all bank accounts, including without limitation trust and operating accounts, over which the subject common interest community manager had signatory authority in connection with its management business; (v) prepare and submit an accounting of receipts and disbursements and account balances of all funds under the receiver’s control for submission to the court within four months of the appointment and annually thereafter until the receivership is terminated by the court; (vi) attempt to collect any accounts receivable related to the subject common interest community manager’s business; (vii) identify and attempt to recover any assets wrongfully diverted from the subject common interest community manager’s business, or assets acquired with funds wrongfully diverted from the subject common interest community manager’s business; (viii) terminate the subject common interest community manager’s business; (ix) reduce to cash all of the assets of the subject common interest community manager; (x) determine the nature and amount of all claims of creditors of the subject common interest community manager, including associations to which the subject common interest community manager provided management services; and (xi) prepare and file with the court a report of such assets and claims proposing a plan for the distribution of funds in the receivership to such creditors in accordance with the provisions of subsection G.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"6":{"id":201040,"text":"Upon the court’s approval of the receiver’s report referenced in subsection F, at a hearing after such notice as the court may require to creditors, the receiver shall distribute the assets of the common interest community manager and funds in the receivership first to clients whose funds were or ought to have been held in a fiduciary capacity by the subject common interest community manager, then to the receiver for fees, costs, and expenses awarded pursuant to subsection H, and thereafter to the creditors of the subject common interest community manager, and then to the subject common interest community manager or its successors in interest.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"7":{"id":201041,"text":"A receiver appointed pursuant to this section shall be entitled, upon proper application to the court in which the appointment was made, to recover an award of reasonable fees, costs, and expenses. If there are not sufficient nonfiduciary funds to pay the award, then the shortfall shall be paid by the Common Interest Community Management Recovery Fund as a cost of administering the Fund pursuant to § 54.1-2354.5, to the extent that the said Fund has funds available. The Fund shall have a claim against the subject common interest community manager for the amount paid.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G","next_prefix":"I"},"8":{"id":201042,"text":"The court may determine whether any assets under the receiver’s control should be returned to the subject common interest community manager.","type":"section","prefixes":["I"],"prefix":"I","entire_prefix":"I","prefix_anchor":"I","level":1,"prior_prefix":"H","next_prefix":"J"},"9":{"id":201043,"text":"If the Board shall find that any common interest community manager is insolvent, that its merger into another common interest community manager is desirable for the protection of the associations to which such common interest community manager provides management services, and that an emergency exists, and, if the board of directors of such insolvent common interest community manager shall approve a plan of merger of such common interest community manager into another common interest community manager, compliance with the requirements of § 13.1-718 shall be dispensed with as to such insolvent common interest community manager and the approval by the Board of such plan of merger shall be the equivalent of approval by the holders of more than two-thirds of the outstanding shares of such insolvent common interest community manager for all purposes of Article 12 (§ 13.1-715.1 et seq.) of Chapter 9 of Title 13.1. If the Board finds that a common interest community manager is insolvent, that the acquisition of its assets by another common interest community manager is in the best interests of the associations to which such common interest community manager provides management services, and that an emergency exists, it may, with the consent of the boards of directors of both common interest community managers as to the terms and conditions of such transfer, including the assumption of all or certain liabilities, enter an order transferring some or all of the assets of such insolvent common interest community manager to such other common interest community manager, and no compliance with the provisions of §§ 13.1-723 and 13.1-724 shall be required, nor shall §§ 13.1-730 through 13.1-741 be applicable to such transfer. In the case either of such a merger or of such a sale of assets, the Board shall provide that prompt notice of its finding of insolvency and of the merger or sale of assets be sent to the stockholders of record of the insolvent common interest community manager for the purpose of providing such shareholders an opportunity to challenge the finding that the common interest community manager is insolvent. The relevant books and records of such insolvent common interest community manager shall remain intact and be made available to such shareholders for a period of 30 days after such notice is sent. The Board’s finding of insolvency shall become final if a hearing before the Board is not requested by any such shareholder within such 30-day period. If, after such hearing, the Board finds that such common interest community manager was solvent, it shall rescind its order entered pursuant to this subsection and the merger or transfer of assets shall be rescinded. But if, after such hearing, the Board finds that such common interest community manager was insolvent, its order shall be final.","type":"section","prefixes":["J"],"prefix":"J","entire_prefix":"J","prefix_anchor":"J","level":1,"prior_prefix":"I","next_prefix":"K"},"10":{"id":201044,"text":"The provisions of this article are declared to be remedial. The purpose of this article is to protect the interests of associations adversely affected by common interest community managers who have breached their fiduciary duty. The provisions of this article shall be liberally administered in order to protect those interests and thereby the public’s interest in the quality of management services provided by Virginia common interest community managers.","type":"section","prefixes":["K"],"prefix":"K","entire_prefix":"K","prefix_anchor":"K","level":1,"prior_prefix":"J"}},"ancestry":[{"id":13764,"edition_id":1,"name":"Common Interest Community Board","identifier":"1","label":"article","depth":4,"order_by":1,"parent_id":13763,"metadata":{},"date_created":"2026-06-26 03:45:49","date_modified":"2026-06-26 03:45:49","permalink":{"id":240417,"object_type":"structure","relational_id":13764,"identifier":"1","token":"54.1\/II\/23.3\/1","url":"\/54.1\/II\/23.3\/1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13763,"edition_id":1,"name":"Common Interest Communities","identifier":"23.3","label":"chapter","depth":3,"order_by":1,"parent_id":12755,"metadata":{},"date_created":"2026-06-26 03:45:49","date_modified":"2026-06-26 03:45:49","permalink":{"id":240415,"object_type":"structure","relational_id":13763,"identifier":"23.3","token":"54.1\/II\/23.3","url":"\/54.1\/II\/23.3\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12755,"edition_id":1,"name":"Professions and Occupations Regulated by the Department of Professional and Occupational Regulation and Boards Within the Department","identifier":"II","label":"subtitle","depth":2,"order_by":1,"parent_id":12754,"metadata":{},"date_created":"2026-06-26 03:43:51","date_modified":"2026-06-26 03:43:51","permalink":{"id":239415,"object_type":"structure","relational_id":12755,"identifier":"II","token":"54.1\/II","url":"\/54.1\/II\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12754,"edition_id":1,"name":"Professions and Occupations","identifier":"54.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:51","date_modified":"2026-06-26 03:43:51","permalink":{"id":239313,"object_type":"structure","relational_id":12754,"identifier":"54.1","token":"54.1","url":"\/54.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":55467,"structure_id":13764,"section_number":"54.1-2345","catch_line":"Definitions","url":"\/54.1-2345\/","token":"54.1\/II\/23.3\/1\/54.1-2345","metadata":false},{"id":64487,"structure_id":13764,"section_number":"54.1-2345.1","catch_line":"Certain real estate arrangements and covenants not deemed to constitute a common interest community","url":"\/54.1-2345.1\/","token":"54.1\/II\/23.3\/1\/54.1-2345.1","metadata":false},{"id":65787,"structure_id":13764,"section_number":"54.1-2346","catch_line":"License required; certification of employees; renewal; provisional license","url":"\/54.1-2346\/","token":"54.1\/II\/23.3\/1\/54.1-2346","metadata":false},{"id":73925,"structure_id":13764,"section_number":"54.1-2347","catch_line":"Exceptions and exemptions generally","url":"\/54.1-2347\/","token":"54.1\/II\/23.3\/1\/54.1-2347","metadata":false},{"id":56965,"structure_id":13764,"section_number":"54.1-2348","catch_line":"Common Interest Community Board; membership; meetings; quorum","url":"\/54.1-2348\/","token":"54.1\/II\/23.3\/1\/54.1-2348","metadata":false},{"id":75397,"structure_id":13764,"section_number":"54.1-2349","catch_line":"Powers and duties of the Board","url":"\/54.1-2349\/","token":"54.1\/II\/23.3\/1\/54.1-2349","metadata":false},{"id":65478,"structure_id":13764,"section_number":"54.1-2350","catch_line":"Annual report; form to accompany resale certificates","url":"\/54.1-2350\/","token":"54.1\/II\/23.3\/1\/54.1-2350","metadata":false},{"id":75527,"structure_id":13764,"section_number":"54.1-2351","catch_line":"General powers and duties of Board concerning associations","url":"\/54.1-2351\/","token":"54.1\/II\/23.3\/1\/54.1-2351","metadata":false},{"id":78745,"structure_id":13764,"section_number":"54.1-2352","catch_line":"Cease and desist orders","url":"\/54.1-2352\/","token":"54.1\/II\/23.3\/1\/54.1-2352","metadata":false},{"id":54774,"structure_id":13764,"section_number":"54.1-2353","catch_line":"Protection of the interests of associations; appointment of receiver for common interest community manager","url":"\/54.1-2353\/","token":"54.1\/II\/23.3\/1\/54.1-2353","metadata":false},{"id":55980,"structure_id":13764,"section_number":"54.1-2354","catch_line":"Variation by agreement","url":"\/54.1-2354\/","token":"54.1\/II\/23.3\/1\/54.1-2354","metadata":false}],"previous_section":{"id":78745,"structure_id":13764,"section_number":"54.1-2352","catch_line":"Cease and desist orders","url":"\/54.1-2352\/","token":"54.1\/II\/23.3\/1\/54.1-2352","metadata":false},"next_section":{"id":55980,"structure_id":13764,"section_number":"54.1-2354","catch_line":"Variation by agreement","url":"\/54.1-2354\/","token":"54.1\/II\/23.3\/1\/54.1-2354","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/54.1-2353\/","history_text":"

This law was first created in 2008. The record of its establishment is cataloged in chapters 851<\/a> and 871<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 3 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 2011, chapters 334<\/a> and 605<\/a>; in 2019, chapter 712<\/a>; in 2025, chapter 105<\/a>.<\/p>","references":[{"id":66664,"section_number":"54.1-2354.1","catch_line":"Definitions","order_by":null,"url":"\/54.1-2354.1\/"},{"id":78911,"section_number":"54.1-2354.5","catch_line":"Common Interest Community Management Recovery Fund","order_by":null,"url":"\/54.1-2354.5\/"}],"refers_to":[{"id":85057,"section_number":"13.1-715.1","catch_line":"Definitions","order_by":null,"url":"\/13.1-715.1\/"},{"id":78280,"section_number":"13.1-718","catch_line":"Action on a plan of merger or share exchange","order_by":null,"url":"\/13.1-718\/"},{"id":86592,"section_number":"13.1-723","catch_line":"Disposition of assets not requiring shareholder approval","order_by":null,"url":"\/13.1-723\/"},{"id":78985,"section_number":"13.1-724","catch_line":"Shareholder approval of certain dispositions","order_by":null,"url":"\/13.1-724\/"},{"id":65588,"section_number":"13.1-730","catch_line":"Right to appraisal","order_by":null,"url":"\/13.1-730\/"},{"id":73399,"section_number":"13.1-741","catch_line":"Court costs and counsel fees","order_by":null,"url":"\/13.1-741\/"},{"id":78911,"section_number":"54.1-2354.5","catch_line":"Common Interest Community Management Recovery Fund","order_by":null,"url":"\/54.1-2354.5\/"}],"permalink":{"id":240455,"object_type":"law","relational_id":54774,"identifier":"54.1-2353","token":"54.1\/II\/23.3\/1\/54.1-2353","url":"\/54.1-2353\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/54.1-2353\/","token":"54.1\/II\/23.3\/1\/54.1-2353","dublin_core":{"Title":"Protection of the interests of associations; appointment of receiver for common interest community manager","Type":"Text","Format":"text\/html","Identifier":"\u00a7 54.1-2353","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> A common interest community<\/span> manager<\/span> owes a fiduciary duty to the associations<\/span> to which it provides management services<\/span> with respect to the manager’s handling the funds or the records of each association<\/span>. All funds deposited with the common interest community<\/span> manager<\/span> shall be handled in a fiduciary capacity and shall be kept in a separate fiduciary trust account or accounts in an FDIC-insured financial institution separate from the assets<\/span> of the common interest community<\/span> manager<\/span>. The funds shall be the property of the association<\/span> and shall be segregated for each depository in the records of the common interest community<\/span> manager<\/span> in a manner that permits the funds to be identified on an association<\/span> basis. The common interest community<\/span> manager<\/span> shall transfer and release all funds and close bank accounts maintained on behalf of an association<\/span> within a reasonable time after termination of the contract<\/span> for management services<\/span> without additional cost to the association<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> All records having administrative or fiscal value to the association<\/span> that a common interest community<\/span> manager<\/span> holds, maintains, compiles, or generates on behalf of a common interest community<\/span> are the property of the association<\/span>. A common interest community<\/span> manager<\/span> may retain and dispose of association<\/span> records in accordance with a policy contained in the contract<\/span> between the common interest community<\/span> manager<\/span> and the association<\/span>. Within a reasonable time after a written request for any such records, the common interest community<\/span> manager<\/span> shall provide copies of the requested records to the association<\/span> at the association<\/span>’s expense. The common interest community<\/span> manager<\/span> shall return all association<\/span> records that it retains and any originals of legal instruments or official documents that are in the possession<\/span> of the common interest community<\/span> manager<\/span> to the association<\/span> within a reasonable time after termination of the contract<\/span> for management services<\/span> without additional cost to the association<\/span>. Records maintained in electronic format may be returned in such format. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> If the Board<\/span> has reasonable cause to believe that a common interest community<\/span> manager<\/span> is unable to properly discharge its fiduciary responsibilities to an association<\/span> to which it provides management services<\/span>, the Board<\/span> may submit an ex parte<\/span> petition<\/span> to the circuit<\/span> court<\/span> of the city or county wherein the common interest community<\/span> manager<\/span> maintains an office or is doing business for the issuance of an order<\/span> authorizing the immediate inspection by and production to representatives of the petitioner of any records, documents, and physical or other evidence<\/span> belonging to the subject common interest community<\/span> manager<\/span>. The court<\/span> may issue<\/span> such order<\/span> without notice to the common interest community<\/span> manager<\/span> if the petition<\/span>, supported by affidavit<\/span> of the petitioner and such other evidence<\/span> as the court<\/span> may require, shows reasonable cause to believe that such action is required to prevent immediate loss of property of one or more of the associations<\/span> to which the subject common interest community<\/span> manager<\/span> provides management services<\/span>. The court<\/span> may also temporarily enjoin further activity by the common interest community<\/span> manager<\/span> and take such further action as shall be necessary to conserve, protect, and disburse the funds involved, including the appointment of a receiver. The papers filed with the court<\/span> pursuant to this subsection shall be placed under seal. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> If the Board<\/span> has reasonable cause to believe that a common interest community<\/span> manager<\/span> is unable to properly discharge its fiduciary responsibilities to an association<\/span> to which it provides management services<\/span>, the Board<\/span> may file a petition<\/span> with the circuit<\/span> court<\/span> of the county or city wherein the subject common interest community<\/span> manager<\/span> maintains an office or is doing business. The petition<\/span> may seek the following relief: (i) an injunction<\/span> prohibiting the withdrawal of any bank deposits or the disposition<\/span> of any other assets<\/span> belonging to or subject to the control of the subject common interest community<\/span> manager<\/span> and (ii) the appointment of a receiver for all or part of the funds or property of the subject common interest community<\/span> manager<\/span>. The subject common interest community<\/span> manager<\/span> shall be given notice of the time and place of the hearing<\/span> on the petition<\/span> and an opportunity to offer evidence<\/span>. The court<\/span>, in its discretion, may require a receiver appointed pursuant to this section to post bond<\/span>, with or without surety<\/span>. The papers filed with the court<\/span> under this subsection shall be placed under seal until such time as the court<\/span> grants an injunction<\/span> or appoints a receiver. The court<\/span> may issue<\/span> an injunction<\/span>, appoint a receiver, or provide such other relief as the court<\/span> may consider proper if, after a hearing<\/span>, the court<\/span> finds that such relief is necessary or appropriate to prevent loss of property of one or more of the associations<\/span> to which the subject common interest community<\/span> manager<\/span> provides management services<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> In any proceeding under subsection D, any person or entity known to the Board<\/span> to be indebted to or having in his possession<\/span> property, real or personal, belonging to or subject to the control of the subject common interest community<\/span> manager<\/span>’s business and which property the Board<\/span> reasonably believes may become part of the receivership assets<\/span> shall be served with a copy of the petition<\/span> and notice of the time and place of the hearing<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> The court<\/span> shall describe the powers and duties of the receiver in its appointing order<\/span>, which may be amended from time to time. The receiver shall, unless otherwise ordered by the court<\/span> in the appointing order<\/span>, (i) prepare and file with the Board<\/span> a list of all associations<\/span> managed by the subject common interest community<\/span> manager<\/span>; (ii) notify in writing all of the associations<\/span> to which the subject common interest community<\/span> manager<\/span> provides management services<\/span> of the appointment and take whatever action the receiver deems appropriate to protect the interests of the associations<\/span> until such time as the associations<\/span> have had an opportunity to obtain a successor common interest community<\/span> manager<\/span>; (iii) facilitate the transfer of records and information to such successor common interest community<\/span> manager<\/span>; (iv) identify and take control of all bank accounts, including without limitation trust and operating accounts, over which the subject common interest community<\/span> manager<\/span> had signatory authority in connection with its management business; (v) prepare and submit an accounting of receipts and disbursements and account balances of all funds under the receiver’s control for submission to the court<\/span> within four months of the appointment and annually thereafter until the receivership is terminated by the court<\/span>; (vi) attempt to collect any accounts receivable related to the subject common interest community<\/span> manager<\/span>’s business; (vii) identify and attempt to recover any assets<\/span> wrongfully diverted from the subject common interest community<\/span> manager<\/span>’s business, or assets<\/span> acquired with funds wrongfully diverted from the subject common interest community<\/span> manager<\/span>’s business; (viii) terminate the subject common interest community<\/span> manager<\/span>’s business; (ix) reduce to cash all of the assets<\/span> of the subject common interest community<\/span> manager<\/span>; (x) determine the nature and amount of all claims of creditors<\/span> of the subject common interest community<\/span> manager<\/span>, including associations<\/span> to which the subject common interest community<\/span> manager<\/span> provided management services<\/span>; and (xi) prepare and file with the court<\/span> a report of such assets<\/span> and claims proposing a plan for the distribution of funds in the receivership to such creditors<\/span> in accordance with the provisions of subsection G. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> Upon the court<\/span>’s approval of the receiver’s report referenced in subsection F, at a hearing<\/span> after such notice as the court<\/span> may require to creditors<\/span>, the receiver shall distribute the assets<\/span> of the common interest community<\/span> manager<\/span> and funds in the receivership first to clients whose funds were or ought to have been held in a fiduciary capacity by the subject common interest community<\/span> manager<\/span>, then to the receiver for fees, costs, and expenses awarded pursuant to subsection H, and thereafter to the creditors<\/span> of the subject common interest community<\/span> manager<\/span>, and then to the subject common interest community<\/span> manager<\/span> or its successors in interest. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> A receiver appointed pursuant to this section shall be entitled, upon proper application to the court<\/span> in which the appointment was made, to recover an award of reasonable fees, costs, and expenses. If there are not sufficient nonfiduciary funds to pay the award, then the shortfall shall be paid by the Common Interest Community<\/span> Management Recovery Fund as a cost of administering the Fund pursuant to § 54.1-2354.5<\/a>, to the extent that the said Fund has funds available. The Fund shall have a claim against the subject common interest community<\/span> manager<\/span> for the amount paid. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

I.<\/span> The court<\/span> may determine whether any assets<\/span> under the receiver’s control should be returned to the subject common interest community<\/span> manager<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

J.<\/span> If the Board<\/span> shall find that any common interest community<\/span> manager<\/span> is insolvent, that its merger into another common interest community<\/span> manager<\/span> is desirable for the protection of the associations<\/span> to which such common interest community<\/span> manager<\/span> provides management services<\/span>, and that an emergency exists, and, if the board<\/span> of directors of such insolvent common interest community<\/span> manager<\/span> shall approve a plan of merger of such common interest community<\/span> manager<\/span> into another common interest community<\/span> manager<\/span>, compliance with the requirements of § 13.1-718<\/a> shall be dispensed with as to such insolvent common interest community<\/span> manager<\/span> and the approval by the Board<\/span> of such plan of merger shall be the equivalent of approval by the holders of more than two-thirds of the outstanding shares of such insolvent common interest community<\/span> manager<\/span> for all purposes of Article 12 (§ 13.1-715.1<\/a> et seq.) of Chapter 9 of Title 13.1. If the Board<\/span> finds that a common interest community<\/span> manager<\/span> is insolvent, that the acquisition of its assets<\/span> by another common interest community<\/span> manager<\/span> is in the best interests of the associations<\/span> to which such common interest community<\/span> manager<\/span> provides management services<\/span>, and that an emergency exists, it may, with the consent of the boards<\/span> of directors of both common interest community<\/span> managers<\/span> as to the terms and conditions of such transfer, including the assumption of all or certain liabilities, enter an order<\/span> transferring some or all of the assets<\/span> of such insolvent common interest community<\/span> manager<\/span> to such other common interest community<\/span> manager<\/span>, and no compliance with the provisions of §§ 13.1-723<\/a> and 13.1-724<\/a> shall be required, nor shall §§ 13.1-730<\/a> through 13.1-741<\/a> be applicable to such transfer. In the case either of such a merger or of such a sale of assets<\/span>, the Board<\/span> shall provide that prompt notice of its finding<\/span> of insolvency and of the merger or sale of assets<\/span> be sent to the stockholders of record of the insolvent common interest community<\/span> manager<\/span> for the purpose of providing such shareholders an opportunity to challenge the finding<\/span> that the common interest community<\/span> manager<\/span> is insolvent. The relevant books and records of such insolvent common interest community<\/span> manager<\/span> shall remain intact and be made available to such shareholders for a period of 30 days after such notice is sent. The Board<\/span>’s finding<\/span> of insolvency shall become final if a hearing<\/span> before the Board<\/span> is not requested by any such shareholder within such 30-day period. If, after such hearing<\/span>, the Board<\/span> finds that such common interest community<\/span> manager<\/span> was solvent, it shall rescind its order<\/span> entered pursuant to this subsection and the merger or transfer of assets<\/span> shall be rescinded. But if, after such hearing<\/span>, the Board<\/span> finds that such common interest community<\/span> manager<\/span> was insolvent, its order<\/span> shall be final. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

K.<\/span> The provisions of this article are declared to be remedial. The purpose of this article is to protect the interests of associations<\/span> adversely affected by common interest community<\/span> managers<\/span> who have breached their fiduciary duty. The provisions of this article shall be liberally administered in order<\/span> to protect those interests and thereby the public’s interest in the quality of management services<\/span> provided by Virginia common interest community<\/span> managers<\/span>. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nPROTECTION OF THE INTERESTS OF ASSOCIATIONS; APPOINTMENT OF RECEIVER FOR COMMON\nINTEREST COMMUNITY MANAGER (\u00a7 54.1-2353)\n\nA. A common interest community manager owes a fiduciary duty to the associations\nto which it provides management services with respect to the manager’s\nhandling the funds or the records of each association. All funds deposited with\nthe common interest community manager shall be handled in a fiduciary capacity\nand shall be kept in a separate fiduciary trust account or accounts in an\nFDIC-insured financial institution separate from the assets of the common\ninterest community manager. The funds shall be the property of the association\nand shall be segregated for each depository in the records of the common\ninterest community manager in a manner that permits the funds to be identified\non an association basis. The common interest community manager shall transfer\nand release all funds and close bank accounts maintained on behalf of an\nassociation within a reasonable time after termination of the contract for\nmanagement services without additional cost to the association.\n\nB. All records having administrative or fiscal value to the association that a\ncommon interest community manager holds, maintains, compiles, or generates on\nbehalf of a common interest community are the property of the association. A\ncommon interest community manager may retain and dispose of association records\nin accordance with a policy contained in the contract between the common\ninterest community manager and the association. Within a reasonable time after a\nwritten request for any such records, the common interest community manager\nshall provide copies of the requested records to the association at the\nassociation’s expense. The common interest community manager shall return\nall association records that it retains and any originals of legal instruments\nor official documents that are in the possession of the common interest\ncommunity manager to the association within a reasonable time after termination\nof the contract for management services without additional cost to the\nassociation. Records maintained in electronic format may be returned in such\nformat.\n\nC. If the Board has reasonable cause to believe that a common interest community\nmanager is unable to properly discharge its fiduciary responsibilities to an\nassociation to which it provides management services, the Board may submit an ex\nparte petition to the circuit court of the city or county wherein the common\ninterest community manager maintains an office or is doing business for the\nissuance of an order authorizing the immediate inspection by and production to\nrepresentatives of the petitioner of any records, documents, and physical or\nother evidence belonging to the subject common interest community manager. The\ncourt may issue such order without notice to the common interest community\nmanager if the petition, supported by affidavit of the petitioner and such other\nevidence as the court may require, shows reasonable cause to believe that such\naction is required to prevent immediate loss of property of one or more of the\nassociations to which the subject common interest community manager provides\nmanagement services. The court may also temporarily enjoin further activity by\nthe common interest community manager and take such further action as shall be\nnecessary to conserve, protect, and disburse the funds involved, including the\nappointment of a receiver. The papers filed with the court pursuant to this\nsubsection shall be placed under seal.\n\nD. If the Board has reasonable cause to believe that a common interest community\nmanager is unable to properly discharge its fiduciary responsibilities to an\nassociation to which it provides management services, the Board may file a\npetition with the circuit court of the county or city wherein the subject common\ninterest community manager maintains an office or is doing business. The\npetition may seek the following relief: (i) an injunction prohibiting the\nwithdrawal of any bank deposits or the disposition of any other assets belonging\nto or subject to the control of the subject common interest community manager\nand (ii) the appointment of a receiver for all or part of the funds or property\nof the subject common interest community manager. The subject common interest\ncommunity manager shall be given notice of the time and place of the hearing on\nthe petition and an opportunity to offer evidence. The court, in its discretion,\nmay require a receiver appointed pursuant to this section to post bond, with or\nwithout surety. The papers filed with the court under this subsection shall be\nplaced under seal until such time as the court grants an injunction or appoints\na receiver. The court may issue an injunction, appoint a receiver, or provide\nsuch other relief as the court may consider proper if, after a hearing, the\ncourt finds that such relief is necessary or appropriate to prevent loss of\nproperty of one or more of the associations to which the subject common interest\ncommunity manager provides management services.\n\nE. In any proceeding under subsection D, any person or entity known to the Board\nto be indebted to or having in his possession property, real or personal,\nbelonging to or subject to the control of the subject common interest community\nmanager’s business and which property the Board reasonably believes may\nbecome part of the receivership assets shall be served with a copy of the\npetition and notice of the time and place of the hearing.\n\nF. The court shall describe the powers and duties of the receiver in its\nappointing order, which may be amended from time to time. The receiver shall,\nunless otherwise ordered by the court in the appointing order, (i) prepare and\nfile with the Board a list of all associations managed by the subject common\ninterest community manager; (ii) notify in writing all of the associations to\nwhich the subject common interest community manager provides management services\nof the appointment and take whatever action the receiver deems appropriate to\nprotect the interests of the associations until such time as the associations\nhave had an opportunity to obtain a successor common interest community manager;\n(iii) facilitate the transfer of records and information to such successor\ncommon interest community manager; (iv) identify and take control of all bank\naccounts, including without limitation trust and operating accounts, over which\nthe subject common interest community manager had signatory authority in\nconnection with its management business; (v) prepare and submit an accounting of\nreceipts and disbursements and account balances of all funds under the\nreceiver’s control for submission to the court within four months of the\nappointment and annually thereafter until the receivership is terminated by the\ncourt; (vi) attempt to collect any accounts receivable related to the subject\ncommon interest community manager’s business; (vii) identify and attempt\nto recover any assets wrongfully diverted from the subject common interest\ncommunity manager’s business, or assets acquired with funds wrongfully\ndiverted from the subject common interest community manager’s business;\n(viii) terminate the subject common interest community manager’s business;\n(ix) reduce to cash all of the assets of the subject common interest community\nmanager; (x) determine the nature and amount of all claims of creditors of the\nsubject common interest community manager, including associations to which the\nsubject common interest community manager provided management services; and (xi)\nprepare and file with the court a report of such assets and claims proposing a\nplan for the distribution of funds in the receivership to such creditors in\naccordance with the provisions of subsection G.\n\nG. Upon the court’s approval of the receiver’s report referenced in\nsubsection F, at a hearing after such notice as the court may require to\ncreditors, the receiver shall distribute the assets of the common interest\ncommunity manager and funds in the receivership first to clients whose funds\nwere or ought to have been held in a fiduciary capacity by the subject common\ninterest community manager, then to the receiver for fees, costs, and expenses\nawarded pursuant to subsection H, and thereafter to the creditors of the subject\ncommon interest community manager, and then to the subject common interest\ncommunity manager or its successors in interest.\n\nH. A receiver appointed pursuant to this section shall be entitled, upon proper\napplication to the court in which the appointment was made, to recover an award\nof reasonable fees, costs, and expenses. If there are not sufficient\nnonfiduciary funds to pay the award, then the shortfall shall be paid by the\nCommon Interest Community Management Recovery Fund as a cost of administering\nthe Fund pursuant to § 54.1-2354.5, to the extent that the said Fund has\nfunds available. The Fund shall have a claim against the subject common interest\ncommunity manager for the amount paid.\n\nI. The court may determine whether any assets under the receiver’s control\nshould be returned to the subject common interest community manager.\n\nJ. If the Board shall find that any common interest community manager is\ninsolvent, that its merger into another common interest community manager is\ndesirable for the protection of the associations to which such common interest\ncommunity manager provides management services, and that an emergency exists,\nand, if the board of directors of such insolvent common interest community\nmanager shall approve a plan of merger of such common interest community manager\ninto another common interest community manager, compliance with the requirements\nof § 13.1-718 shall be dispensed with as to such insolvent common interest\ncommunity manager and the approval by the Board of such plan of merger shall be\nthe equivalent of approval by the holders of more than two-thirds of the\noutstanding shares of such insolvent common interest community manager for all\npurposes of Article 12 (§ 13.1-715.1 et seq.) of Chapter 9 of Title 13.1.\nIf the Board finds that a common interest community manager is insolvent, that\nthe acquisition of its assets by another common interest community manager is in\nthe best interests of the associations to which such common interest community\nmanager provides management services, and that an emergency exists, it may, with\nthe consent of the boards of directors of both common interest community\nmanagers as to the terms and conditions of such transfer, including the\nassumption of all or certain liabilities, enter an order transferring some or\nall of the assets of such insolvent common interest community manager to such\nother common interest community manager, and no compliance with the provisions\nof §§ 13.1-723 and 13.1-724 shall be required, nor shall §§\n13.1-730 through 13.1-741 be applicable to such transfer. In the case either of\nsuch a merger or of such a sale of assets, the Board shall provide that prompt\nnotice of its finding of insolvency and of the merger or sale of assets be sent\nto the stockholders of record of the insolvent common interest community manager\nfor the purpose of providing such shareholders an opportunity to challenge the\nfinding that the common interest community manager is insolvent. The relevant\nbooks and records of such insolvent common interest community manager shall\nremain intact and be made available to such shareholders for a period of 30 days\nafter such notice is sent. The Board’s finding of insolvency shall become\nfinal if a hearing before the Board is not requested by any such shareholder\nwithin such 30-day period. If, after such hearing, the Board finds that such\ncommon interest community manager was solvent, it shall rescind its order\nentered pursuant to this subsection and the merger or transfer of assets shall\nbe rescinded. But if, after such hearing, the Board finds that such common\ninterest community manager was insolvent, its order shall be final.\n\nK. The provisions of this article are declared to be remedial. The purpose of\nthis article is to protect the interests of associations adversely affected by\ncommon interest community managers who have breached their fiduciary duty. The\nprovisions of this article shall be liberally administered in order to protect\nthose interests and thereby the public’s interest in the quality of\nmanagement services provided by Virginia common interest community managers.\n\nHISTORY: 2008, cc. 851, 871; 2011, cc. 334, 605; 2019, c. 712; 2025, c. 105.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}