                                 CODE OF VIRGINIA

LIMITATION ON CERTAIN CONTRACTS AND LEASES BY DECLARANT (§ 55.1-1803)

A. If entered into any time prior to the expiration of the period of declarant
control contemplated by the declaration, no contract or lease entered into with
the declarant or any entity controlled by the declarant, management contract, or
employment contract that is directly or indirectly made by or on behalf of the
association, its board of directors, or the lot owners as a group shall be
entered into for a period in excess of five years. Any such contract or
agreement may be terminated without penalty by the association or its board of
directors upon not less than 90 days&#8217; written notice to the other party
given no later than 60 days after the expiration of the period of declarant
control contemplated by the declaration.

B. If entered into any time prior to the expiration of the period of declarant
control contemplated by the declaration, any contract or lease entered into with
the declarant or any entity controlled by the declarant, management contract, or
employment contract that is directly or indirectly made by or on behalf of the
association, its board of directors, or the lot owners as a group may be renewed
for periods not in excess of five years; however, at the end of any five-year
period, the association or its board of directors may terminate any further
renewals or extensions of such contract or lease.

C. If entered into at any time prior to the expiration of the period of
declarant control contemplated by the declaration, any contract, lease, or
agreement, other than those subject to the provisions of subsection A or B, may
be entered into by or on behalf of the association, its board of directors, or
the lot owners as a group if such contract, lease, or agreement is bona fide and
is commercially reasonable to the association at the time entered into under the
circumstances.

D. This section shall be strictly construed to protect the rights of the lot
owners.

HISTORY: 2012, c. 671, § 55-509.1:1; 2019, c. 712.