                                 CODE OF VIRGINIA

TRANSFER OF SPECIAL DECLARANT RIGHTS (§ 55.1-2135)

A. No special declarant rights created or reserved under this chapter may be
transferred except by an instrument evidencing the transfer recorded in every
county or city in which any portion of the cooperative is located. The
instrument is not effective unless executed by the transferee.

B. Upon transfer of any special declarant right, the liability of a transferor
declarant is as follows:

   1. A transferor is not relieved of any obligation or liability arising before
   the transfer and remains liable for warranty obligations imposed upon him by
   this chapter. Lack of privity does not deprive any proprietary lessee of
   standing to maintain an action to enforce any obligation of the transferor.

   2. If a successor to any special declarant right is an affiliate of a
   declarant, the transferor is jointly and severally liable with the successor
   for any obligations or liabilities of the successor relating to the
   cooperative.

   3. If a transferor retains any special declarant rights, but transfers other
   special declarant rights to a successor who is not an affiliate of the
   declarant, the transferor is liable for any obligations or liabilities imposed
   on a declarant by this chapter or by the declaration relating to the retained
   special declarant rights and arising after the transfer.

   4. A transferor has no liability for any act or omission or any breach of a
   contractual or warranty obligation arising from the exercise of a special
   declarant right by a successor declarant who is not an affiliate of the
   transferor.

C. Unless otherwise provided in a security agreement, in case of foreclosure of
a security agreement, tax sale, judicial sale, sale by a trustee under a
security agreement or sale under receivership proceedings or the Bankruptcy Code
as codified in Title 11 of the United States Code, of any cooperative interests
owned by a declarant or of real estate in a cooperative subject to development
rights:

   1. A person acquiring all the cooperative interests or real estate being
   foreclosed or sold shall succeed, but only upon his request, to all special
   declarant rights related to that property held by that declarant or only to
   any rights reserved in the declaration pursuant to &#xA7; 55.1-2125 and held
   by that declarant to maintain models, sales offices, and signs.

   2. The judgment or instrument conveying title shall provide for transfer of
   only the special declarant rights requested.

D. Upon foreclosure, tax sale, judicial sale, sale by a trustee under a security
agreement, or sale under receivership proceedings or the Bankruptcy Code as
codified in Title 11 of the United States Code, of all cooperative interests or
real estate in a cooperative owned by a declarant:

   1. The declarant ceases to have any special declarant rights, and

   2. The period of declarant control as provided in subsection D of &#xA7;
   55.1-2134 terminates unless the judgment or instrument conveying title
   provides for transfer of all special declarant rights held by that declarant
   to a successor declarant.

E. The liabilities and obligations of a person who succeeds to special declarant
rights are as follows:

   1. A successor to any special declarant right who is an affiliate of a
   declarant is subject to all obligations and liabilities imposed on the
   transferor by this chapter or by the declaration.

   2. A successor to any special declarant right, other than a successor
   described in subdivision 3 or 4, who is not an affiliate of a declarant is
   subject to all obligations and liabilities imposed by this chapter or the
   declaration:
   				a. On a declarant that relate to his exercise or non-exercise of special
   declarant rights; or
   				b. On his transferor, other than:

      1. Misrepresentations by any previous declarant;

      2. Warranty obligations on improvements made by any previous declarant or
      made before the cooperative was created;

      3. Breach of any fiduciary obligation by any previous declarant or his
      appointees to the executive board; or

      4. Any liability or obligation imposed on the transferor as a result of the
      transferor&#8217;s acts or omissions after the transfer.

   3. A successor to only a right reserved in the declaration to maintain models,
   sales offices, and signs pursuant to &#xA7; 55.1-2125, if he is not an
   affiliate of a declarant, may not exercise any other special declarant right
   and is not subject to any liability or obligation as a declarant, except the
   obligation to provide a current public offering statement, any liability
   arising as a result of providing a public offering statement, and obligations
   under Article 5 (&#xA7; 55.1-2173 et seq.).

   4. A successor to all special declarant rights held by his transferor who is
   not an affiliate of that declarant and who succeeded to those rights pursuant
   to a deed or other instrument of conveyance in lieu of foreclosure or a
   judgment or instrument conveying title to cooperative interests or real estate
   subject to development rights under subsection C may declare his intention in
   a recorded instrument to hold those rights solely for transfer to another
   person. After declaring such an intention in a recorded instrument, until
   transferring all special declarant rights to any person acquiring title to any
   cooperative interest or real estate subject to development rights owned by the
   successor, or until recording an instrument permitting exercise of all those
   rights, that successor may not exercise any of those rights other than any
   right held by his transferor to control the executive board in accordance with
   the provisions of subsection D of &#xA7; 55.1-2134 for the duration of any
   period of declarant control, and any attempted exercise of those rights is
   void. So long as a successor declarant may not exercise special declarant
   rights under this subsection, he is not subject to any liability or obligation
   as a declarant other than liability for his acts and omissions under
   subsection D of &#xA7; 55.1-2134.

F. Nothing in this section subjects any successor to a special declarant right
to any claims against or other obligations of a transferor declarant, other than
claims and obligations arising under this chapter or the declaration.

HISTORY: 1982, c. 277, § 55-461; 2019, c. 712.