                                 CODE OF VIRGINIA

TERMINATION OF CONDOMINIUM (§ 55.1-1937)

A. If there is no unit owner other than the declarant, the declarant may
unilaterally terminate the condominium. An instrument terminating a condominium
signed by the declarant is effective upon recordation of such instrument. But
this section shall not be construed to nullify, limit, or otherwise affect the
validity or enforceability of any agreement renouncing or to renounce, in whole
or in part, the right hereby conferred.

B. Except in the case of a taking of all the units by eminent domain, if any of
the units in the condominium is restricted exclusively to residential use and
there is any unit owner other than the declarant, the condominium may be
terminated only by the agreement of unit owners of units to which four-fifths of
the votes in the unit owners&#8217; association appertain, or such larger
majority as the condominium instruments may specify. If none of the units in the
condominium is restricted exclusively to residential use, the condominium
instruments may specify a majority smaller than the minimum specified in this
subsection.

C. Agreement of the required majority of unit owners to termination of the
condominium shall be evidenced by their execution of a termination agreement, or
ratifications of such agreement, and such agreement is effective when a copy of
the termination agreement is recorded together with a certification, signed by
the principal officer of the unit owners&#8217; association or by such other
officer as the condominium instruments may specify, that the requisite majority
of the unit owners signed the termination agreement or ratifications. Unless the
termination agreement otherwise provides, prior to recordation of the
termination agreement, a unit owner&#8217;s prior agreement to terminate the
condominium may be revoked only with the approval of unit owners of units to
which a majority of the votes in the unit owners&#8217; association appertain.
Any unit owner acquiring a unit subsequent to approval of a termination
agreement but prior to recordation of the termination agreement shall be deemed
to have consented to the termination agreement. Upon approval of a termination
agreement and until recordation of the termination agreement, a copy of the
termination agreement shall be included with the resale certificate required by
&#xA7; 55.1-2309. The termination agreement shall specify a date after which the
termination agreement is void if the termination agreement is not recorded. For
the purposes of this section, an instrument terminating a condominium and any
ratification of such instrument shall be deemed a condominium instrument subject
to the provisions of &#xA7; 55.1-1911.

D. A termination agreement may provide that all of the common elements and units
of the condominium shall be sold or otherwise disposed of following termination.
If, pursuant to the termination agreement, any property in the condominium is
sold or disposed of following termination, the termination agreement shall set
forth the minimum terms of the sale or disposition.

E. In the case of a master condominium that contains a unit that is a part of
another condominium, a termination agreement for the master condominium shall
not terminate the other condominium.

F. On behalf of the unit owners, the unit owners&#8217; association may contract
for the disposition of property in the condominium, but the contract shall not
be binding on the unit owners until approved pursuant to subsections B and C. If
the termination agreement requires that any property in the condominium be sold
or otherwise disposed of following termination, title to the property, upon
termination, shall vest in the unit owners&#8217; association as trustee for the
holders of all interest in the units. Thereafter, the unit owners&#8217;
association shall have powers necessary and appropriate to effect the sale or
disposition. Until the termination has been concluded and the proceeds have been
distributed, the unit owners&#8217; association shall continue in existence with
all the powers the unit owners&#8217; association had before termination.
Proceeds of the sale shall be distributed to unit owners and lien holders as
their interests may appear, in proportion to the respective interests of the
unit owners as provided in subsection I. Unless otherwise specified in the
termination agreement, for as long as the unit owners&#8217; association holds
title to the property, each unit owner or his successor in interest shall have
an exclusive right to occupancy of the portion of the property that formerly
constituted his unit. During the period that the unit owner or his successor in
interest has the right to occupancy, each unit owner or his successor in
interest shall remain liable for any assessment or other obligation imposed on
the unit owner by this chapter or the condominium instruments.

G. If the property that constitutes the condominium is not sold or otherwise
disposed of following termination, title to all the property in the condominium
shall vest in the unit owners, upon termination, as tenants in common in
proportion to the unit owners&#8217; respective interests as provided in
subsection I. In such an event, any liens on a unit shall shift accordingly, and
a lien may be enforced only against a unit owner&#8217;s tenancy in common
interest, but the lien shall not encumber the entire property formerly
constituting the condominium. While the tenancy in common exists, each unit
owner or his successor in interest shall have the exclusive right to occupancy
of the portion of the property that formerly constituted the unit owner&#8217;s
unit.

H. Following termination of the condominium, the proceeds of any sale of
property, together with the assets of the unit owners&#8217; association, shall
be held by the unit owners&#8217; association as trustee for unit owners or lien
holders on the units as their interests may appear. Following termination, any
creditor of the unit owners&#8217; association who holds a lien on the unit that
was recorded before termination may enforce the lien in the same manner as any
lien holder. Any other creditor of the unit owners&#8217; association shall be
treated as if he had perfected a lien on the units immediately before
termination.

I. Unless the condominium instruments as originally recorded or as amended by
100 percent of the unit owners provide otherwise, the respective interests of
unit owners referred to in subsections F, G, and H shall be as follows:

   1. Except as provided in subdivision 3, the respective interests of the unit
   owners shall be as set forth in the termination agreement.

   2. Except as provided in subdivision 3, if the respective interests of the
   unit owners are based on the respective fair market values of their units,
   limited common elements, and common element interests immediately before the
   termination, the fair market values shall be determined by one or more
   independent appraisers selected by the unit owners&#8217; association. The
   decision of the independent appraisers shall be distributed to the unit owners
   and become final unless disapproved within 30 days after distribution by unit
   owners of units to which one quarter of the votes in the unit owners&#8217;
   association appertain. The proportion of any unit owner&#8217;s interest to
   the interest of all unit owners is determined by dividing the fair market
   value of that unit owner&#8217;s unit and common element interest by the total
   fair market values of all the units and their common element interests.

   3. If the method of determining the respective interests of the unit owners in
   the proceeds of sale or disposition is other than the fair market values, then
   the association shall provide each unit owner with a notice stating the result
   of that method for his unit and, no later than 30 days after transmission of
   that notice, if 10 percent of the unit owners dispute the interest to be
   distributed to their units, those unit owners may require the association to
   obtain an independent appraisal of the condominium units. If the fair market
   value of the units of the objecting unit owners is at least 10 percent more
   than the amount that the unit owners would have received using the method
   agreed upon by the membership, then the association shall adjust the
   respective interests of the unit owners so that each unit owner&#8217;s share
   is based on the fair market value for each unit. If the fair market value is
   less than 10 percent more than the amount that the objecting unit owners would
   have received using the agreed-upon method, then the agreed-upon method shall
   be implemented and the objecting unit owners shall receive the distribution
   less their pro rata share of the cost of their appraisal.

   4. If the method of determining the respective interests of the unit owners
   cannot be implemented because any unit or limited common element is destroyed,
   the interests of all unit owners are the unit owners&#8217; respective common
   element interests immediately before the termination.

   5. Unless the termination agreement provides otherwise, each unit owner shall
   satisfy and cause the release of any mortgage, deed of trust, lease, or other
   lien or encumbrance on his unit at the time required by the termination
   agreement.

J. Except as provided in subsection K, foreclosure of any mortgage, deed of
trust, or other lien, or enforcement of a mortgage, deed of trust, or other lien
or encumbrance against the entire condominium, shall not alone terminate the
condominium, and foreclosure or enforcement of a lien or encumbrance against a
portion of the condominium, other than withdrawable land, shall not withdraw
that portion from the condominium. Foreclosure or enforcement of a lien or
encumbrance against withdrawable land shall not alone withdraw the land from the
condominium, but the person who takes title to the withdrawable land shall have
the right to require from the unit owners&#8217; association, upon request, an
amendment that excludes the land from the condominium.

K. If a lien or encumbrance against a portion of the property that comprises the
condominium has priority over the condominium instruments and the lien or
encumbrance has not been partially released, upon foreclosure, the parties
foreclosing the lien or encumbrance may record an instrument that excludes the
property subject to the lien or encumbrance from the condominium.

HISTORY: 1993, c. 667, § 55-79.72:1; 2019, c. 712; 2020, cc. 592, 817; 2023,
cc. 387, 388.