{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/55.1-2220.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/55.1-2220.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/55.1-2220.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/55.1-2220.html"}],"law_id":65782,"edition_id":1,"section_id":65782,"structure_id":14946,"section_number":"55.1-2220","catch_line":"Escrow of deposits; use of corporate surety bond or irrevocable letter of credit","history":"1981, c. 462, \u00a7 55-375; 1984, c. 429; 1985, c. 517; 1994, c. 580; 1998, c. 460; 2006, c. 653; 2008, cc. 851, 871; 2018, cc. 33, 133; 2019, c. 712.","full_text":"A\n\nAny deposit made in connection with the purchase or reservation of a product shall be held in escrow. All deposits shall be held in escrow until (i) delivered to the developer upon expiration of the purchaser’s cancellation period provided the purchaser’s right of cancellation has not been exercised, (ii) delivered to the developer because of the purchaser’s default under a contract to purchase a time-share, or (iii) refunded to the purchaser. Such funds shall be deposited in a separate account designated for this purpose that is federally insured and located in the Commonwealth; except where such deposits are being held by a real estate broker or attorney licensed under the laws of the Commonwealth, such funds may be placed in that broker’s or attorney’s regular escrow account and need not be placed in a separate designated account. Such escrow funds shall not be subject to attachment by the creditors of either the purchaser or the developer.B\n\nIn lieu of escrowing deposits as provided in subsection A, the developer of a time-share project consisting of more than 25 units may:1\n\nObtain and maintain a corporate surety bond issued by a surety authorized to do business in the Commonwealth, in the form and amount set forth in subsection C; or2\n\nObtain and maintain an irrevocable letter of credit issued by a financial institution whose accounts are insured by the FDIC, in the form and amount set forth in subsection D.\n\t\t\t\tThe surety bond or letter of credit shall be maintained until (i) the expiration of the purchaser’s cancellation period, (ii) the purchaser’s default under a purchase contract for the time-share estate entitling the developer to retain the deposit, or (iii) the refund of the deposit to the time-share purchaser, whichever occurs first.C\n\nThe surety bond shall be payable to the Commonwealth for the use and benefit of every person protected under the provisions of this chapter. The developer shall file the bond with the Board. The surety bond may be either in the form of an individual bond for each deposit accepted by the developer or, if the total amount of the deposits accepted by the developer under this chapter exceeds $10,000, it may be in the form of a blanket bond. If the bond is a blanket bond, the amount shall be as follows. If the amount of such deposits is:1\n\nMore than $10,000 but not more than $75,000, the blanket bond shall be $75,000;2\n\nMore than $75,000 but less than $200,000, the blanket bond shall be $200,000;3\n\n$200,000 or more but less than $500,000, the blanket bond shall be $500,000;4\n\n$500,000 or more but less than $1 million, the blanket bond shall be $1 million; and5\n\n$1 million or more, the blanket bond shall be 100 percent of the amount of such deposits.D\n\nThe letter of credit shall be payable to the Commonwealth for the use and benefit of every person protected under this chapter. The developer shall file the letter of credit with the Board. The letter of credit may be either in the form of an individual letter of credit for each deposit accepted by the developer or, if the total amount of the deposits accepted by the developer under this chapter exceeds $10,000, it may be in the form of a blanket letter of credit. If the letter of credit is a blanket letter of credit, the amount shall be as follows. If the amount of such deposits is:1\n\nMore than $10,000 but not more than $75,000, the blanket letter of credit shall be $75,000;2\n\nMore than $75,000 but less than $200,000, the blanket letter of credit shall be $200,000;3\n\n$200,000 or more but less than $500,000, the blanket letter of credit shall be $500,000;4\n\n$500,000 or more but less than $1 million, the blanket letter of credit shall be $1 million; and5\n\n$1 million or more, the blanket letter of credit shall be 100 percent of the amount of such deposits.\n\t\t\t\tFor the purposes of determining the amount of any blanket letter of credit that a developer maintains in any calendar year, the total amount of deposits considered held by the developer shall be determined as of May 31 in each calendar year and the amount of the letter of credit shall be in accordance with the amount of deposits held as of May 31.E\n\nThe developer shall disclose in the contract or in the public offering that the deposit may not be held in escrow or protected by a surety bond or letter of credit after expiration of the cancellation period and that such deposit is not protected as an escrow after expiration of the cancellation period. This disclosure shall include a statement of whether or not the developer reserves the option to sell or assign any promissory note given by a purchaser to another entity, whether or not such entity is affiliated with the developer. Both disclosures shall appear in boldface type of a minimum size of 10 points.","order_by":null,"text":{"0":{"id":239077,"text":"Any deposit made in connection with the purchase or reservation of a product shall be held in escrow. All deposits shall be held in escrow until (i) delivered to the developer upon expiration of the purchaser’s cancellation period provided the purchaser’s right of cancellation has not been exercised, (ii) delivered to the developer because of the purchaser’s default under a contract to purchase a time-share, or (iii) refunded to the purchaser. Such funds shall be deposited in a separate account designated for this purpose that is federally insured and located in the Commonwealth; except where such deposits are being held by a real estate broker or attorney licensed under the laws of the Commonwealth, such funds may be placed in that broker’s or attorney’s regular escrow account and need not be placed in a separate designated account. Such escrow funds shall not be subject to attachment by the creditors of either the purchaser or the developer.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":239078,"text":"In lieu of escrowing deposits as provided in subsection A, the developer of a time-share project consisting of more than 25 units may:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"B1"},"2":{"id":239079,"text":"Obtain and maintain a corporate surety bond issued by a surety authorized to do business in the Commonwealth, in the form and amount set forth in subsection C; or","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"3":{"id":239080,"text":"Obtain and maintain an irrevocable letter of credit issued by a financial institution whose accounts are insured by the FDIC, in the form and amount set forth in subsection D.\n\t\t\t\tThe surety bond or letter of credit shall be maintained until (i) the expiration of the purchaser’s cancellation period, (ii) the purchaser’s default under a purchase contract for the time-share estate entitling the developer to retain the deposit, or (iii) the refund of the deposit to the time-share purchaser, whichever occurs first.","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"C"},"4":{"id":239081,"text":"The surety bond shall be payable to the Commonwealth for the use and benefit of every person protected under the provisions of this chapter. The developer shall file the bond with the Board. The surety bond may be either in the form of an individual bond for each deposit accepted by the developer or, if the total amount of the deposits accepted by the developer under this chapter exceeds $10,000, it may be in the form of a blanket bond. If the bond is a blanket bond, the amount shall be as follows. If the amount of such deposits is:","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B2","next_prefix":"C1"},"5":{"id":239082,"text":"More than $10,000 but not more than $75,000, the blanket bond shall be $75,000;","type":"section","prefixes":["C","1"],"prefix":"1","entire_prefix":"C1","prefix_anchor":"C1","level":2,"prior_prefix":"C","next_prefix":"C2"},"6":{"id":239083,"text":"More than $75,000 but less than $200,000, the blanket bond shall be $200,000;","type":"section","prefixes":["C","2"],"prefix":"2","entire_prefix":"C2","prefix_anchor":"C2","level":2,"prior_prefix":"C1","next_prefix":"C3"},"7":{"id":239084,"text":"$200,000 or more but less than $500,000, the blanket bond shall be $500,000;","type":"section","prefixes":["C","3"],"prefix":"3","entire_prefix":"C3","prefix_anchor":"C3","level":2,"prior_prefix":"C2","next_prefix":"C4"},"8":{"id":239085,"text":"$500,000 or more but less than $1 million, the blanket bond shall be $1 million; and","type":"section","prefixes":["C","4"],"prefix":"4","entire_prefix":"C4","prefix_anchor":"C4","level":2,"prior_prefix":"C3","next_prefix":"C5"},"9":{"id":239086,"text":"$1 million or more, the blanket bond shall be 100 percent of the amount of such deposits.","type":"section","prefixes":["C","5"],"prefix":"5","entire_prefix":"C5","prefix_anchor":"C5","level":2,"prior_prefix":"C4","next_prefix":"D"},"10":{"id":239087,"text":"The letter of credit shall be payable to the Commonwealth for the use and benefit of every person protected under this chapter. The developer shall file the letter of credit with the Board. The letter of credit may be either in the form of an individual letter of credit for each deposit accepted by the developer or, if the total amount of the deposits accepted by the developer under this chapter exceeds $10,000, it may be in the form of a blanket letter of credit. If the letter of credit is a blanket letter of credit, the amount shall be as follows. If the amount of such deposits is:","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C5","next_prefix":"D1"},"11":{"id":239088,"text":"More than $10,000 but not more than $75,000, the blanket letter of credit shall be $75,000;","type":"section","prefixes":["D","1"],"prefix":"1","entire_prefix":"D1","prefix_anchor":"D1","level":2,"prior_prefix":"D","next_prefix":"D2"},"12":{"id":239089,"text":"More than $75,000 but less than $200,000, the blanket letter of credit shall be $200,000;","type":"section","prefixes":["D","2"],"prefix":"2","entire_prefix":"D2","prefix_anchor":"D2","level":2,"prior_prefix":"D1","next_prefix":"D3"},"13":{"id":239090,"text":"$200,000 or more but less than $500,000, the blanket letter of credit shall be $500,000;","type":"section","prefixes":["D","3"],"prefix":"3","entire_prefix":"D3","prefix_anchor":"D3","level":2,"prior_prefix":"D2","next_prefix":"D4"},"14":{"id":239091,"text":"$500,000 or more but less than $1 million, the blanket letter of credit shall be $1 million; and","type":"section","prefixes":["D","4"],"prefix":"4","entire_prefix":"D4","prefix_anchor":"D4","level":2,"prior_prefix":"D3","next_prefix":"D5"},"15":{"id":239092,"text":"$1 million or more, the blanket letter of credit shall be 100 percent of the amount of such deposits.\n\t\t\t\tFor the purposes of determining the amount of any blanket letter of credit that a developer maintains in any calendar year, the total amount of deposits considered held by the developer shall be determined as of May 31 in each calendar year and the amount of the letter of credit shall be in accordance with the amount of deposits held as of May 31.","type":"section","prefixes":["D","5"],"prefix":"5","entire_prefix":"D5","prefix_anchor":"D5","level":2,"prior_prefix":"D4","next_prefix":"E"},"16":{"id":239093,"text":"The developer shall disclose in the contract or in the public offering that the deposit may not be held in escrow or protected by a surety bond or letter of credit after expiration of the cancellation period and that such deposit is not protected as an escrow after expiration of the cancellation period. This disclosure shall include a statement of whether or not the developer reserves the option to sell or assign any promissory note given by a purchaser to another entity, whether or not such entity is affiliated with the developer. Both disclosures shall appear in boldface type of a minimum size of 10 points.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D5"}},"ancestry":[{"id":14946,"edition_id":1,"name":"Protection of Purchasers","identifier":"3","label":"article","depth":4,"order_by":1,"parent_id":13543,"metadata":{},"date_created":"2026-06-26 03:50:59","date_modified":"2026-06-26 03:50:59","permalink":{"id":247543,"object_type":"structure","relational_id":14946,"identifier":"3","token":"55.1\/IV\/22\/3","url":"\/55.1\/IV\/22\/3\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13543,"edition_id":1,"name":"Virginia Real Estate Time-Share Act","identifier":"22","label":"chapter","depth":3,"order_by":1,"parent_id":12914,"metadata":{},"date_created":"2026-06-26 03:45:10","date_modified":"2026-06-26 03:45:10","permalink":{"id":247469,"object_type":"structure","relational_id":13543,"identifier":"22","token":"55.1\/IV\/22","url":"\/55.1\/IV\/22\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12914,"edition_id":1,"name":"Common Interest Communities","identifier":"IV","label":"subtitle","depth":2,"order_by":1,"parent_id":12707,"metadata":{},"date_created":"2026-06-26 03:44:01","date_modified":"2026-06-26 03:44:01","permalink":{"id":246473,"object_type":"structure","relational_id":12914,"identifier":"IV","token":"55.1\/IV","url":"\/55.1\/IV\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12707,"edition_id":1,"name":"Property and Conveyances","identifier":"55.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":244769,"object_type":"structure","relational_id":12707,"identifier":"55.1","token":"55.1","url":"\/55.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":64589,"structure_id":14946,"section_number":"55.1-2217","catch_line":"Public offering statement","url":"\/55.1-2217\/","token":"55.1\/IV\/22\/3\/55.1-2217","metadata":false},{"id":70516,"structure_id":14946,"section_number":"55.1-2218","catch_line":"Certain advertising practices regulated","url":"\/55.1-2218\/","token":"55.1\/IV\/22\/3\/55.1-2218","metadata":false},{"id":82622,"structure_id":14946,"section_number":"55.1-2219","catch_line":"Exchange programs","url":"\/55.1-2219\/","token":"55.1\/IV\/22\/3\/55.1-2219","metadata":false},{"id":65782,"structure_id":14946,"section_number":"55.1-2220","catch_line":"Escrow of deposits; use of corporate surety bond or irrevocable letter of credit","url":"\/55.1-2220\/","token":"55.1\/IV\/22\/3\/55.1-2220","metadata":false},{"id":57032,"structure_id":14946,"section_number":"55.1-2221","catch_line":"Purchaser's rights of cancellation","url":"\/55.1-2221\/","token":"55.1\/IV\/22\/3\/55.1-2221","metadata":false},{"id":58820,"structure_id":14946,"section_number":"55.1-2222","catch_line":"Possibility of reverter","url":"\/55.1-2222\/","token":"55.1\/IV\/22\/3\/55.1-2222","metadata":false},{"id":64333,"structure_id":14946,"section_number":"55.1-2223","catch_line":"Recording and delivery of deed","url":"\/55.1-2223\/","token":"55.1\/IV\/22\/3\/55.1-2223","metadata":false},{"id":57283,"structure_id":14946,"section_number":"55.1-2224","catch_line":"Liability limited; liability actions prohibited","url":"\/55.1-2224\/","token":"55.1\/IV\/22\/3\/55.1-2224","metadata":false},{"id":67991,"structure_id":14946,"section_number":"55.1-2225","catch_line":"Warning required","url":"\/55.1-2225\/","token":"55.1\/IV\/22\/3\/55.1-2225","metadata":false},{"id":70835,"structure_id":14946,"section_number":"55.1-2226","catch_line":"Buyer's Acknowledgment","url":"\/55.1-2226\/","token":"55.1\/IV\/22\/3\/55.1-2226","metadata":false},{"id":80782,"structure_id":14946,"section_number":"55.1-2227","catch_line":"Resale of time-shares","url":"\/55.1-2227\/","token":"55.1\/IV\/22\/3\/55.1-2227","metadata":false},{"id":81261,"structure_id":14946,"section_number":"55.1-2228","catch_line":"Required resale disclosures","url":"\/55.1-2228\/","token":"55.1\/IV\/22\/3\/55.1-2228","metadata":false},{"id":60659,"structure_id":14946,"section_number":"55.1-2229","catch_line":"Liens","url":"\/55.1-2229\/","token":"55.1\/IV\/22\/3\/55.1-2229","metadata":false},{"id":80677,"structure_id":14946,"section_number":"55.1-2230","catch_line":"Effect of violations on rights of action; attorney fees; prior determination of Common Interest Community Board required for certain violations","url":"\/55.1-2230\/","token":"55.1\/IV\/22\/3\/55.1-2230","metadata":false},{"id":85586,"structure_id":14946,"section_number":"55.1-2231","catch_line":"Statute of limitations; actions; limitation on rescission rights","url":"\/55.1-2231\/","token":"55.1\/IV\/22\/3\/55.1-2231","metadata":false},{"id":75281,"structure_id":14946,"section_number":"55.1-2232","catch_line":"Class actions","url":"\/55.1-2232\/","token":"55.1\/IV\/22\/3\/55.1-2232","metadata":false},{"id":62762,"structure_id":14946,"section_number":"55.1-2233","catch_line":"Financial records","url":"\/55.1-2233\/","token":"55.1\/IV\/22\/3\/55.1-2233","metadata":false},{"id":64251,"structure_id":14946,"section_number":"55.1-2234","catch_line":"Developer's obligation to complete","url":"\/55.1-2234\/","token":"55.1\/IV\/22\/3\/55.1-2234","metadata":false}],"previous_section":{"id":82622,"structure_id":14946,"section_number":"55.1-2219","catch_line":"Exchange programs","url":"\/55.1-2219\/","token":"55.1\/IV\/22\/3\/55.1-2219","metadata":false},"next_section":{"id":57032,"structure_id":14946,"section_number":"55.1-2221","catch_line":"Purchaser's rights of cancellation","url":"\/55.1-2221\/","token":"55.1\/IV\/22\/3\/55.1-2221","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/55.1-2220\/","history_text":"

This law was first created in 1981. The record of its establishment is cataloged in chapter 462 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. Unfortunately, the 1981 \u201cActs\u201d aren\u2019t available online. It has been modified 8 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 1984, chapter 429; in 1985, chapter 517; in 1994, chapter 580<\/a>; in 1998, chapter 460<\/a>; in 2006, chapter 653<\/a>; in 2008, chapters 851<\/a> and 871<\/a>; in 2018, chapters 33<\/a> and 133<\/a>; in 2019, chapter 712<\/a>.<\/p>","references":[{"id":61697,"section_number":"55.1-2201","catch_line":"Applicability","order_by":null,"url":"\/55.1-2201\/"},{"id":80677,"section_number":"55.1-2230","catch_line":"Effect of violations on rights of action; attorney fees; prior determination of Common Interest Community Board required for certain violations","order_by":null,"url":"\/55.1-2230\/"},{"id":69214,"section_number":"55.1-2246","catch_line":"Alternative purchase; registration","order_by":null,"url":"\/55.1-2246\/"},{"id":55034,"section_number":"55.1-2247","catch_line":"General powers and duties of Board","order_by":null,"url":"\/55.1-2247\/"},{"id":54508,"section_number":"55.1-2252","catch_line":"Penalties","order_by":null,"url":"\/55.1-2252\/"}],"refers_to":false,"permalink":{"id":247557,"object_type":"law","relational_id":65782,"identifier":"55.1-2220","token":"55.1\/IV\/22\/3\/55.1-2220","url":"\/55.1-2220\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/55.1-2220\/","token":"55.1\/IV\/22\/3\/55.1-2220","dublin_core":{"Title":"Escrow of deposits; use of corporate surety bond or irrevocable letter of credit","Type":"Text","Format":"text\/html","Identifier":"\u00a7 55.1-2220","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> Any deposit made in connection with the purchase or reservation of a product<\/span> shall be held in escrow. All deposits shall be held in escrow until (i) delivered to the developer<\/span> upon expiration of the purchaser<\/span>’s cancellation period provided the purchaser<\/span>’s right of cancellation has not been exercised, (ii) delivered to the developer<\/span> because of the purchaser<\/span>’s default<\/span> under a contract<\/span> to purchase a time-share<\/span>, or (iii) refunded to the purchaser<\/span>. Such funds shall be deposited in a separate account designated for this purpose that is federally insured and located in the Commonwealth; except where such deposits are being held by a real estate broker or attorney licensed under the laws<\/span> of the Commonwealth, such funds may be placed in that broker’s or attorney’s regular escrow account and need not be placed in a separate designated account. Such escrow funds shall not be subject to attachment<\/span> by the creditors<\/span> of either the purchaser<\/span> or the developer<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> In lieu of escrowing deposits as provided in subsection A, the developer<\/span> of a time-share project<\/span> consisting of more than 25 units<\/span> may: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Obtain and maintain a corporate surety<\/span> bond<\/span> issued by a surety<\/span> authorized to do business in the Commonwealth, in the form and amount set forth in subsection C; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Obtain and maintain an irrevocable letter of credit issued by a financial institution whose accounts are insured by the FDIC, in the form and amount set forth in subsection D.\n\t\t\t\tThe surety<\/span> bond<\/span> or letter of credit shall be maintained until (i) the expiration of the purchaser<\/span>’s cancellation period, (ii) the purchaser<\/span>’s default<\/span> under a purchase contract<\/span> for the time-share estate<\/span> entitling the developer<\/span> to retain the deposit, or (iii) the refund of the deposit to the time-share purchaser<\/span>, whichever occurs first. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> The surety<\/span> bond<\/span> shall be payable to the Commonwealth for the use and benefit of every person<\/span> protected under the provisions of this chapter. The developer<\/span> shall file the bond<\/span> with the Board<\/span>. The surety<\/span> bond<\/span> may be either in the form of an individual bond<\/span> for each deposit accepted by the developer<\/span> or, if the total amount of the deposits accepted by the developer<\/span> under this chapter exceeds $10,000, it may be in the form of a blanket bond<\/span>. If the bond<\/span> is a blanket bond<\/span>, the amount shall be as follows. If the amount of such deposits is: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> More than $10,000 but not more than $75,000, the blanket bond<\/span> shall be $75,000; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> More than $75,000 but less than $200,000, the blanket bond<\/span> shall be $200,000; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> $200,000 or more but less than $500,000, the blanket bond<\/span> shall be $500,000; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> $500,000 or more but less than $1 million, the blanket bond<\/span> shall be $1 million; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> $1 million or more, the blanket bond<\/span> shall be 100 percent of the amount of such deposits. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The letter of credit shall be payable to the Commonwealth for the use and benefit of every person<\/span> protected under this chapter. The developer<\/span> shall file the letter of credit with the Board<\/span>. The letter of credit may be either in the form of an individual letter of credit for each deposit accepted by the developer<\/span> or, if the total amount of the deposits accepted by the developer<\/span> under this chapter exceeds $10,000, it may be in the form of a blanket letter of credit. If the letter of credit is a blanket letter of credit, the amount shall be as follows. If the amount of such deposits is: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> More than $10,000 but not more than $75,000, the blanket letter of credit shall be $75,000; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> More than $75,000 but less than $200,000, the blanket letter of credit shall be $200,000; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> $200,000 or more but less than $500,000, the blanket letter of credit shall be $500,000; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> $500,000 or more but less than $1 million, the blanket letter of credit shall be $1 million; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> $1 million or more, the blanket letter of credit shall be 100 percent of the amount of such deposits.\n\t\t\t\tFor the purposes of determining the amount of any blanket letter of credit that a developer<\/span> maintains in any calendar year, the total amount of deposits considered held by the developer<\/span> shall be determined as of May 31 in each calendar year and the amount of the letter of credit shall be in accordance with the amount of deposits held as of May 31. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> The developer<\/span> shall disclose in the contract<\/span> or in the public offering<\/span> that the deposit may not be held in escrow or protected by a surety<\/span> bond<\/span> or letter of credit after expiration of the cancellation period and that such deposit is not protected as an escrow after expiration of the cancellation period. This disclosure shall include a statement of whether or not the developer<\/span> reserves the option to sell or assign any promissory note<\/span> given by a purchaser<\/span> to another entity, whether or not such entity is affiliated with the developer<\/span>. Both disclosures shall appear in boldface type of a minimum size of 10 points. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nESCROW OF DEPOSITS; USE OF CORPORATE SURETY BOND OR IRREVOCABLE LETTER OF CREDIT\n(\u00a7 55.1-2220)\n\nA. Any deposit made in connection with the purchase or reservation of a product\nshall be held in escrow. All deposits shall be held in escrow until (i)\ndelivered to the developer upon expiration of the purchaser’s cancellation\nperiod provided the purchaser’s right of cancellation has not been\nexercised, (ii) delivered to the developer because of the purchaser’s\ndefault under a contract to purchase a time-share, or (iii) refunded to the\npurchaser. Such funds shall be deposited in a separate account designated for\nthis purpose that is federally insured and located in the Commonwealth; except\nwhere such deposits are being held by a real estate broker or attorney licensed\nunder the laws of the Commonwealth, such funds may be placed in that\nbroker’s or attorney’s regular escrow account and need not be placed\nin a separate designated account. Such escrow funds shall not be subject to\nattachment by the creditors of either the purchaser or the developer.\n\nB. In lieu of escrowing deposits as provided in subsection A, the developer of a\ntime-share project consisting of more than 25 units may:\n\n 1. Obtain and maintain a corporate surety bond issued by a surety authorized\n to do business in the Commonwealth, in the form and amount set forth in\n subsection C; or\n\n 2. Obtain and maintain an irrevocable letter of credit issued by a financial\n institution whose accounts are insured by the FDIC, in the form and amount set\n forth in subsection D.\n \t\t\t\tThe surety bond or letter of credit shall be maintained until (i) the\n expiration of the purchaser’s cancellation period, (ii) the\n purchaser’s default under a purchase contract for the time-share estate\n entitling the developer to retain the deposit, or (iii) the refund of the\n deposit to the time-share purchaser, whichever occurs first.\n\nC. The surety bond shall be payable to the Commonwealth for the use and benefit\nof every person protected under the provisions of this chapter. The developer\nshall file the bond with the Board. The surety bond may be either in the form of\nan individual bond for each deposit accepted by the developer or, if the total\namount of the deposits accepted by the developer under this chapter exceeds\n$10,000, it may be in the form of a blanket bond. If the bond is a blanket bond,\nthe amount shall be as follows. If the amount of such deposits is:\n\n 1. More than $10,000 but not more than $75,000, the blanket bond shall be\n $75,000;\n\n 2. More than $75,000 but less than $200,000, the blanket bond shall be\n $200,000;\n\n 3. $200,000 or more but less than $500,000, the blanket bond shall be\n $500,000;\n\n 4. $500,000 or more but less than $1 million, the blanket bond shall be $1\n million; and\n\n 5. $1 million or more, the blanket bond shall be 100 percent of the amount of\n such deposits.\n\nD. The letter of credit shall be payable to the Commonwealth for the use and\nbenefit of every person protected under this chapter. The developer shall file\nthe letter of credit with the Board. The letter of credit may be either in the\nform of an individual letter of credit for each deposit accepted by the\ndeveloper or, if the total amount of the deposits accepted by the developer\nunder this chapter exceeds $10,000, it may be in the form of a blanket letter of\ncredit. If the letter of credit is a blanket letter of credit, the amount shall\nbe as follows. If the amount of such deposits is:\n\n 1. More than $10,000 but not more than $75,000, the blanket letter of credit\n shall be $75,000;\n\n 2. More than $75,000 but less than $200,000, the blanket letter of credit\n shall be $200,000;\n\n 3. $200,000 or more but less than $500,000, the blanket letter of credit shall\n be $500,000;\n\n 4. $500,000 or more but less than $1 million, the blanket letter of credit\n shall be $1 million; and\n\n 5. $1 million or more, the blanket letter of credit shall be 100 percent of\n the amount of such deposits.\n \t\t\t\tFor the purposes of determining the amount of any blanket letter of credit\n that a developer maintains in any calendar year, the total amount of deposits\n considered held by the developer shall be determined as of May 31 in each\n calendar year and the amount of the letter of credit shall be in accordance\n with the amount of deposits held as of May 31.\n\nE. The developer shall disclose in the contract or in the public offering that\nthe deposit may not be held in escrow or protected by a surety bond or letter of\ncredit after expiration of the cancellation period and that such deposit is not\nprotected as an escrow after expiration of the cancellation period. This\ndisclosure shall include a statement of whether or not the developer reserves\nthe option to sell or assign any promissory note given by a purchaser to another\nentity, whether or not such entity is affiliated with the developer. Both\ndisclosures shall appear in boldface type of a minimum size of 10 points.\n\nHISTORY: 1981, c. 462, \u00a7 55-375; 1984, c. 429; 1985, c. 517; 1994, c. 580;\n1998, c. 460; 2006, c. 653; 2008, cc. 851, 871; 2018, cc. 33, 133; 2019, c. 712.","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}}