                                 CODE OF VIRGINIA

HOW DEED OF TRUST CONSTRUED; DUTIES, RIGHTS, ETC., OF PARTIES (§ 55.1-320)

Every deed of trust to secure debts or indemnify sureties is in the nature of a
contract and shall be construed according to its terms to the extent not in
conflict with the requirements of law. Unless the deed of trust provides
otherwise, it shall be construed to impose and confer upon the parties and
beneficiaries the following duties, rights, and obligations in like manner as if
the same were expressly provided for by such deed of trust:

1. The deed shall be construed as given to secure the performance of each of the
covenants entered into by the grantor as well as the payment of the primary
obligation.

2. The grantor shall be deemed to covenant that he will pay all taxes, levies,
assessments, and charges upon the property, including the fees and charges of
such agents or attorneys as the trustee may deem advisable to employ at any time
for the purpose of the trust, so long as any obligation upon the grantor under
the deed of trust remains undischarged.

3. The grantor shall be deemed to covenant that he will keep the improvements on
the property in tenantable condition, whether such improvements were on the
property when the deed of trust was given or were placed there at a later time.

4. The grantor shall be deemed to covenant that no waste shall be committed or
suffered upon the property.

5. The grantor shall be deemed to covenant that in the event of his failure to
meet any obligations imposed upon him, then the trustee or any beneficiary may,
at his option, satisfy such obligations. The money so advanced, with interest as
provided in the deed of trust, shall be a part of the debt secured by the deed
of trust, in the event of sale to be paid next after the expenses of executing
the trust, and shall be otherwise recoverable from the grantor as a debt. In
addition, to the extent not otherwise covered, the grantor shall be deemed to
covenant that amount advanced or incurred by the trustee or any beneficiary
under a deed of trust (i) with respect to an obligation secured by a lien or
encumbrance prior to the lien of the deed of trust or (ii) for the protection of
the lien secured by the deed of trust, together with interest as provided in the
deed of trust, shall be a part of the debt secured by the deed of trust, to be
paid next after expenses of executing the trust.

6. A covenant to pay interest shall be deemed a covenant to pay interest on the
principal balance as such rate may vary or be modified from time to time by the
parties under the original instruments or agreements or a written agreement of
modification, whether or not recorded, and all the interest on the principal
secured by the deed of trust shall be on an equal priority with the principal
debt secured by the deed of trust, in the event of sale to be paid next after
the expenses of executing the trust.
			Any covenant, otherwise authorized by law, that the lender shall be entitled
to share in the gross income or the net income, or the gross rent or revenues,
or net rents or revenues of the property, or in any portion of the proceeds or
appreciation upon sale or appraisal or similar event, shall be on an equal
priority with the principal debt secured by the deed of trust, in the event of
sale to be paid next after the expenses of executing the trust, and shall be
specified in the recorded deed of trust or other recorded document in order to
be notice of record as against subsequent parties.

7. In the event of default in the payment of the debt secured, or any part
thereof, at maturity, or in the payment of interest when due, or of the breach
of any of the covenants entered into or imposed upon the grantor, then at the
request of any beneficiary the trustee shall forthwith declare all the debts and
obligations secured by the deed of trust at once due and payable and may take
possession of the property and proceed to sell the same at auction at the
premises or in the front of the circuit court building or at such other place in
the county or city in which the property or the greater part thereof lies, or in
the corporate limits of any city surrounded by or contiguous to such county, or
in the case of annexed land, in the county of which the land was formerly a
part, as the trustee may select upon such terms and conditions as the trustee
may deem best.

8. If the sale is upon credit terms, the deferred purchase money shall bear
interest from the day of sale and shall be secured by a deed of trust upon the
property contemporaneous with the trustee&#8217;s deed to the purchaser.

9. The party secured by the deed of trust, or the holders of greater than 50
percent of the monetary obligations secured thereby, shall have the right and
power to appoint one or more substitute trustees for any reason and, regardless
of whether such right and power is expressly granted in such deed of trust, by
executing and acknowledging an instrument designating and appointing a
substitute. When the instrument of appointment has been executed, the substitute
trustee named therein shall be vested with all the powers, rights, authority,
and duties vested in the trustee in the original deed of trust. The instrument
of appointment shall be recorded in the office of the clerk in which the
original deed of trust is recorded prior to or at the time of recordation of any
instrument in which a power, right, authority, or duty conferred by the original
deed of trust is exercised.

10. In the case of a deed of trust conveying owner-occupied residential real
estate, the trustee of such deed of trust shall not sell the property secured by
the deed of trust without receiving an affidavit signed by the party that
provided the notice required by &#xA7; 55.1-321 confirming the notice was sent
to the owner, with a copy of such notice attached to the affidavit. Prior to
commencing a foreclosure sale with respect to such real estate, the trustee
shall provide copies of such affidavit and notice, with any personal financial
information redacted, to each potential bidder.

HISTORY: Code 1919, § 5167; 1922, p. 364; 1926, p. 591; 1940, p. 879; 1944, p.
481; Code 1950, § 55-59; 1952, c. 370; 1954, c. 557; 1956, c. 674; 1960, c. 5;
1964, c. 501; 1968, c. 786; 1970, c. 12; 1973, c. 341; 1976, c. 257; 1977, cc.
151, 314, 660; 1979, c. 12; 1980, c. 709; 1981, c. 591; 1992, cc. 87, 193; 1993,
c. 426; 1994, c. 551; 2019, c. 712; 2021, Sp. Sess. I, cc. 91, 92.