                                 CODE OF VIRGINIA

LIEN FOR ASSESSMENTS; FORECLOSURE (§ 55.1-1833)

A. The association shall have a lien, once perfected, on every lot for unpaid
assessments levied against that lot in accordance with the provisions of this
chapter and all lawful provisions of the declaration. The lien, once perfected,
shall be prior to all other subsequent liens and encumbrances except (i) real
estate tax liens on that lot, (ii) liens and encumbrances recorded prior to the
recordation of the declaration, and (iii) sums unpaid on and owing under any
mortgage or deed of trust recorded prior to the perfection of such lien. The
provisions of this subsection shall not affect the priority of mechanics&#8217;
and materialmen&#8217;s liens. Notice of a memorandum of lien to a holder of a
credit line deed of trust under &#xA7; 55.1-318 shall be given in the same
fashion as if the association&#8217;s lien were a judgment.

B. The association, in order to perfect the lien given by this section, shall
file, before the expiration of 12 months from the time the first such assessment
became due and payable in the clerk&#8217;s office of the circuit court in the
county or city in which such development is situated, a memorandum, verified by
the oath of the principal officer of the association or such other officer or
officers as the declaration may specify, which contains the following:

   1. The name of the development;

   2. A description of the lot;

   3. The name or names of the persons constituting the owners of that lot;

   4. The amount of unpaid assessments currently due or past due relative to such
   lot together with the date when each fell due;

   5. The date of issuance of the memorandum;

   6. The name of the association and the name and current address of the person
   to contact to arrange for payment or release of the lien; and

   7. A statement that the association is obtaining a lien in accordance with the
   provisions of the Property Owners&#8217; Association Act as set forth in
   Chapter 18 (&#xA7; 55.1-1800 et seq.) of Title 55.1.
   				It shall be the duty of the clerk in whose office such memorandum is filed
   as provided in this section to record and index the same as provided in
   subsection D, in the names of the persons identified in such memorandum as
   well as in the name of the association. The cost of recording and releasing
   the memorandum shall be taxed against the person found liable in any judgment
   or order enforcing such lien.

C. Prior to filing a memorandum of lien, a written notice shall be sent to the
property owner by certified mail, at the property owner&#8217;s last known
address, informing the property owner that a memorandum of lien will be filed in
the circuit court clerk&#8217;s office of the applicable county or city. The
notice shall be sent at least 10 days before the actual filing date of the
memorandum of lien.

D. Notwithstanding any other provision of this section or any other provision of
law requiring documents to be recorded in the miscellaneous lien books or the
deed books in the clerk&#8217;s office of any court, on or after July 1, 1989,
all memoranda of liens arising under this section shall be recorded in the deed
books in the clerk&#8217;s office. Any memorandum shall be indexed in the
general index to deeds, and the general index shall identify the lien as a lien
for lot assessments.

E. Any lien perfected pursuant to subsection B may be enforced by filing a civil
action to conduct a judicial foreclosure in the circuit court in the county or
city where the lot is located or by nonjudicial foreclosure pursuant to
subsections I and J. No foreclosure of any lien perfected under this section
shall be initiated after 120 months from the time when the memorandum of lien
was recorded. The filing of a civil action to enforce any such lien by
foreclosure through judicial means or issuance of notice of nonjudicial
foreclosure under subdivision J 1 shall be regarded as the institution of an
action under this section. Nothing in this subsection shall extend the time
within which any such lien may be perfected.

F. The judgment or order in an action brought pursuant to this section shall
include reimbursement for costs and reasonable attorney fees of the prevailing
party. If the association prevails, it may also recover interest at the legal
rate for the sums secured by the lien from the time each such sum became due and
payable.

G. When payment or satisfaction is made of a debt secured by any lien perfected
pursuant to subsection B, such lien shall be released in accordance with the
provisions of &#xA7; 55.1-339. Any lien that is not so released shall subject
the lien creditor to the penalty set forth in subdivision B 1 of &#xA7;
55.1-339. For the purposes of &#xA7; 55.1-339, the principal officer of the
association, or any other officer or officers as the declaration may specify,
shall be deemed the duly authorized agent of the lien creditor.

H. Nothing in this section shall be construed to prohibit actions at law to
recover sums for which subsection A creates a lien, maintainable pursuant to
&#xA7; 55.1-1828.

I. The association may conduct a judicial or nonjudicial foreclosure sale upon a
lot against which the association has perfected one or more liens pursuant to
this section if the total sums secured are in excess of $5,000, exclusive of
attorney fees and costs. For purposes of this section, the association shall
have the power both to sell and convey the lot and shall be deemed the lot
owner&#8217;s statutory agent for the purpose of transferring title to the lot.

J. A nonjudicial foreclosure sale shall be conducted in compliance with the
following:

   1. The association shall give notice to the lot owner prior to advertisement
   required by subdivision 4. The notice shall specify (i) the debt secured by
   the perfected lien; (ii) the action required to satisfy the debt secured by
   the perfected lien; (iii) the date, not less than 60 days from the date the
   notice is given to the lot owner, by which the debt secured by the lien must
   be satisfied; and (iv) that failure to satisfy the debt secured by the lien on
   or before the date specified in the notice may result in the sale of the lot.
   The notice shall further inform the lot owner of the right to bring a court
   action in the circuit court of the county or city where the lot is located to
   assert the nonexistence of a debt or any other defense of the lot owner to the
   sale.

   2. After expiration of the 60-day notice period specified in subdivision 1,
   the association may appoint a trustee to conduct the sale. The appointment of
   the trustee shall be filed in the clerk&#8217;s office of the circuit court in
   the county or city in which such development is situated. It shall be the duty
   of the clerk in whose office such appointment is filed to record and index the
   same as provided in subsection D, in the names of the persons identified in
   such appointment as well as in the name of the association. The association,
   at its option, may from time to time remove the trustee and appoint a
   successor trustee.

   3. If the lot owner meets the conditions specified in this subdivision prior
   to the date of the foreclosure sale, the lot owner shall have the right to
   have enforcement of the perfected lien discontinued prior to the sale of the
   lot. Those conditions are that the lot owner (i) satisfy the debt secured by
   lien that is the subject of the nonjudicial foreclosure sale and (ii) pay all
   expenses and costs incurred in perfecting and enforcing the lien, including
   advertising costs and reasonable attorney fees.

   4. In addition to the advertisement required by subdivision 5, the association
   shall give written notice of the time, date, and place of any proposed sale in
   execution of the lien, including the name, address, and telephone number of
   the trustee, by hand delivery or by mail to (i) the present owner of the
   property to be sold at his last known address as such owner and address appear
   in the records of the association, (ii) any lienholder who holds a note
   against the property secured by a deed of trust recorded at least 30 days
   prior to the proposed sale and whose address is recorded with the deed of
   trust, and (iii) any assignee of such a note secured by a deed of trust,
   provided that the assignment and address of the assignee are likewise recorded
   at least 30 days prior to the proposed sale. Mailing a copy of the
   advertisement or the notice containing the same information to the owner by
   certified or registered mail no less than 14 days prior to such sale and to
   lienholders and their assigns, at the addresses noted in the memorandum of
   lien, by United States mail, postage prepaid, no less than 14 days prior to
   such sale, shall be a sufficient compliance with the requirement of notice.

   5. The advertisement of sale by the association shall be in a newspaper having
   a general circulation in the county or city in which the property to be sold,
   or any portion of such property, is located pursuant to the following
   provisions:
   				a. The association shall advertise once a week for four successive weeks;
   however, if the property or some portion of such property is located in a city
   or in a county immediately contiguous to a city, publication of the
   advertisement on five different days, which may be consecutive days, shall be
   deemed adequate. The sale shall be held on any day following the day of the
   last advertisement that is no earlier than eight days following the first
   advertisement nor more than 30 days following the last advertisement.
   				b. Such advertisement shall be placed in that section of the newspaper
   where legal notices appear or where the type of property being sold is
   generally advertised for sale. The advertisement of sale, in addition to such
   other matters as the association finds appropriate, shall set forth a
   description of the property to be sold, which description need not be as
   extensive as that contained in the deed of trust but shall identify the
   property by street address, if any, or, if none, shall give the general
   location of the property with reference to streets, routes, or known
   landmarks. Where available, tax map identification may be used but is not
   required. The advertisement shall also include the date, time, place, and
   terms of sale and the name of the association. It shall set forth the name,
   address, and telephone number of the representative, agent, or attorney who
   may be able to respond to inquiries concerning the sale.
   				c. In addition to the advertisement required by subdivisions a and b, the
   association may further advertise as the association finds appropriate.

   6. In the event of postponement of sale, which postponement shall be at the
   discretion of the association, advertisement of such postponed sale shall be
   in the same manner as the original advertisement of sale.

   7. Failure to comply with the requirements for advertisement contained in this
   section shall, upon petition, render a sale of the property voidable by the
   court.

   8. The association shall have the following powers and duties upon a sale:
   				a. Written one-price bids may be made and shall be received by the trustee
   from the association or any person for entry by announcement at the sale. Any
   person other than the trustee may bid at the foreclosure sale, including a
   person who has submitted a written one-price bid. Upon request to the trustee,
   any other bidder in attendance at a foreclosure sale shall be permitted to
   inspect written bids. Unless otherwise provided in the declaration, the
   association may bid to purchase the lot at a foreclosure sale. The association
   may own, lease, encumber, exchange, sell, or convey the lot. Whenever the
   written bid of the association is the highest bid submitted at the sale, such
   written bid shall be filed by the trustee with his account of sale required
   under subdivision J 10 and &#xA7; 64.2-1309. The written bid submitted
   pursuant to this subsection may be prepared by the association, its agent, or
   its attorney.
   				b. The association may require any bidder at any sale to post a cash
   deposit of as much as 10 percent of the sale price before his bid is received,
   which shall be refunded to him if the property is not sold to him. The deposit
   of the successful bidder shall be applied to his credit at settlement, or, if
   such bidder fails to complete his purchase promptly, the deposit shall be
   applied to pay the costs and expenses of the sale, and the balance, if any,
   shall be retained by the association in connection with that sale.
   				c. The association shall receive and receipt for the proceeds of sale, no
   purchaser being required to see to the application of the proceeds, and apply
   the same in the following order: first, to the reasonable expenses of sale,
   including attorney fees; second, to the satisfaction of all taxes, levies, and
   assessments, with costs and interest; third, to the satisfaction of the lien
   for the owners&#8217; assessments; fourth, to the satisfaction in the order of
   priority of any remaining inferior claims of record; and fifth, to pay the
   residue of the proceeds to the owner or his assigns, provided, however, that,
   as to the payment of such residue, the association shall not be bound by any
   inheritance, devise, conveyance, assignment, or lien of or upon the
   owner&#8217;s equity, without actual notice thereof prior to distribution.

   9. The trustee shall deliver to the purchaser a trustee&#8217;s deed conveying
   the lot with special warranty of title. The trustee shall not be required to
   take possession of the property prior to the sale of such property or to
   deliver possession of the lot to the purchaser at the sale.

   10. The trustee shall file an accounting of the sale with the commissioner of
   accounts pursuant to &#xA7; 64.2-1309, and every account of a sale shall be
   recorded pursuant to &#xA7; 64.2-1310. In addition, the accounting shall be
   made available for inspection and copying pursuant to &#xA7; 55.1-1815 upon
   the written request of the prior lot owner, the current lot owner, or any
   holder of a recorded lien against the lot at the time of the sale. The
   association shall maintain a copy of the accounting for at least 12 months
   following the foreclosure sale.

   11. If the sale of a lot is made pursuant to subsection I and the accounting
   is made by the trustee, the title of the purchaser at such sale shall not be
   disturbed unless within 12 months from the confirmation of the accounting by
   the commissioner of accounts the sale is set aside by the court or an appeal
   is filed in the Court of Appeals or granted by the Supreme Court and an order
   is entered requiring such sale to be set aside.

HISTORY: 1989, c. 679, § 55-516; 1991, c. 667; 1997, cc. 760, 766; 2000, c.
905; 2004, cc. 778, 779, 786; 2019, c. 712; 2021, Sp. Sess. I, c. 489; 2024, cc.
55, 349.