                                 CODE OF VIRGINIA

COMMON INTEREST COMMUNITY MANAGEMENT RECOVERY FUND (§ 54.1-2354.5)

A. There is hereby created the Common Interest Community Management Recovery
Fund, referred to in this section as &#8220;the Fund,&#8221; to be used in the
discretion of the Board to protect the interests of associations.

B. Each common interest community manager, at the time of initial application
for licensure, and each association filing its first annual report after the
effective date shall be assessed $25, which shall be specifically assigned to
the Fund. Initial payments may be incorporated in any application fee payment or
annual filing fee and transferred to the Fund by the Director within 30 days.
			All assessments, except initial assessments, for the Fund shall be deposited
within three business days after their receipt by the Director, in one or more
federally insured banks, savings and loan associations, or savings banks located
in the Commonwealth. Funds deposited in banks, savings institutions, or savings
banks in excess of insurance afforded by the Federal Deposit Insurance
Corporation or other federal insurance agency shall be secured under the
Virginia Security for Public Deposits Act (&#xA7; 2.2-4400 et seq.). The deposit
of these funds in federally insured banks, savings and loan associations, or
savings banks located in the Commonwealth shall not be considered investment of
such funds for purposes of this section. Funds maintained by the Director may be
invested in securities that are legal investments for fiduciaries under the
provisions of &#xA7; 64.2-1502.
			Interest earned on the deposits constituting the Fund shall be used for
administering the Fund. The remainder of this interest, at the discretion of the
Board, may be transferred to the Common Interest Community Management
Information Fund, established pursuant to &#xA7; 54.1-2354.2, or accrue to the
Fund.

C. On and after July 1, 2011, the minimum balance of the Fund shall be $150,000.
Whenever the Director determines that the principal balance of the Fund is or
will be less than such minimum principal balance, the Director shall immediately
inform the Board. At the same time, the Director may recommend that the Board
transfer a fixed amount from the Common Interest Community Management
Information Fund to the Fund to bring the principal balance of the Fund to the
amount required by this subsection. Such transfer shall be considered by the
Board within 30 days of the notification of the Director.

D. If any such transfer of funds is insufficient to bring the principal balance
of the Fund to the minimum amount required by this section, or if a transfer to
the Fund has not occurred, the Board shall assess each association and each
common interest community manager, within 30 days of notification by the
Director, a sum sufficient to bring the principal balance of the Fund to the
required minimum amount. The amount of such assessment shall be allocated among
the associations and common interest community managers in proportion to each
payor&#8217;s most recently paid annual assessment, or if an association or
common interest community manager has not paid an annual assessment previously,
in proportion to the average annual assessment most recently paid by
associations or common interest community managers, respectively. The Board may
order an assessment at any time in addition to any required assessment.
Assessments made pursuant to this subsection may be issued by the Board (i)
after a determination made by it or (ii) at the time of license renewal.
			Notice to common interest community managers and the governing boards of
associations of these assessments shall be by first-class mail, and payment of
such assessments shall be made by first-class mail addressed to the Director
within 45 days after the mailing of such notice.

E. If any common interest community manager fails to remit the required payment
within 45 days of the mailing, the Director shall notify the common interest
community manager by first-class mail at the latest address of record filed with
the Board. If no payment has been received by the Director within 30 days after
mailing the second notice, the license shall be automatically suspended. The
license shall be restored only upon the actual receipt by the Director of the
delinquent assessment.

F. If any association fails to remit the required payment within 45 days of the
mailing, the Director shall notify the association by first-class mail at the
latest address of record filed with the Board. If no payment has been received
by the Director within 30 days after mailing the second notice, it shall be
deemed a knowing and willful violation of this section by the governing board of
the association.

G. At the close of each fiscal year, whenever the balance of the Fund exceeds $5
million, the amount in excess of $5 million shall be transferred to the Virginia
Housing Trust Fund established pursuant to Chapter 9 (&#xA7; 36-141 et seq.) of
Title 36. Except for payments of costs as set forth in this article and
transfers pursuant to this subsection, there shall be no transfers out of the
Fund, including transfers to the general fund, regardless of the balance of the
Fund.

H. A claimant may seek recovery from the Fund subject to the following
conditions:

   1. A claimant may file a verified claim in writing to the Director for a
   recovery from the Fund.

   2. Upon proper application to the Director, in those cases in which there are
   not sufficient funds to pay an award of reasonable fees, costs, and expenses
   to the receiver or to restore all funds that were or ought to have been held
   in a fiduciary capacity by the subject common interest community manager, the
   Director shall report to the Board the amount of any shortfall to the extent
   that there are not sufficient funds (i) to pay any award of fees, costs, and
   expenses pursuant to subsection H of &#xA7; 54.1-2353 by the court appointing
   the receiver; or (ii) to restore all funds that were or ought to have been
   held in a fiduciary capacity by the subject common interest community manager,
   as certified by the court appointing the receiver.

   3. If the Board finds there has been compliance with the required conditions,
   the Board shall issue a directive ordering payment of the amount of such
   shortfall to the claimant from the Fund, provided that in no event shall such
   payment exceed the balance in the Fund. When the Fund balance is not
   sufficient to pay the aggregate amount of such shortfall, the Board shall
   direct that payment be applied first in satisfaction of any award of
   reasonable fees, costs, and expenses to the receiver and second to restore the
   funds that were or ought to have been held in a fiduciary capacity by the
   subject common interest community manager. If the Board has reason to believe
   that there may be additional claims against the Fund, the Board may withhold
   any payment from the Fund for a period of not more than one year. After such
   one-year period, if the aggregate of claims received exceeds the Fund balance,
   the Fund balance shall be prorated by the Board among the claimants and paid
   in the above payment order from the Fund in proportion to the amounts of
   claims remaining unpaid.

   4. The Director shall, subject to the limitations set forth in this
   subsection, pay to the claimant from the Fund such amount as shall be directed
   by the Board upon the execution and delivery to the Director by such claimant
   of an assignment to the Board of the claimant&#8217;s rights on its behalf and
   on behalf of the associations receiving distributions from the Fund against
   the common interest community manager to the extent that such rights were
   satisfied from the Fund.

   5. The claimant shall be notified in writing of the findings of the Board. The
   Board&#8217;s findings shall be considered a case decision as defined in
   &#xA7; 2.2-4001, and judicial review of these findings shall be in accordance
   with &#xA7; 2.2-4025 of the Administrative Process Act (&#xA7; 2.2-4000 et
   seq.).

   6. Notwithstanding any other provision of law, the Board shall have the right
   to appeal a decision of any court that is contrary to any distribution
   recommended or authorized by it.

   7. Upon payment by the Director to a claimant from the Fund as provided in
   this subsection, the Board shall immediately revoke the license of the common
   interest community manager whose actions resulted in payment from the Fund.
   The common interest community manager whose license was so revoked shall not
   be eligible to apply for a license as a common interest community manager
   until he has repaid in full the amount paid from the Fund on his account, plus
   interest at the judgment rate of interest from the date of payment from the
   Fund.

   8. Nothing contained in this subsection shall limit the authority of the Board
   to take disciplinary action against any common interest community manager for
   any violation of statute or regulation, nor shall the repayment in full by a
   common interest community manager of the amount paid from the Fund on such
   common interest community manager&#8217;s account nullify or modify the effect
   of any disciplinary proceeding against such common interest community manager
   for any such violation.

HISTORY: 2008, cc. 851, 871, § 55-530.1; 2009, c. 557; 2013, c. 754; 2019, c.
712; 2025, c. 105.