                                 CODE OF VIRGINIA

LIMITATION OF ASSUMPTION OF DEBT AND ENCUMBRANCES (§ 55.1-2150)

Unless approved by persons entitled to cast at least 80 percent of the votes in
the association, including a simple majority of the votes allocated to
cooperative interests not owned by a declarant or any larger percentage the
declaration specifies, (i) the association shall not assume or take subject to
any debt, inclusive of any principal and interest accrued thereon, incurred in
the original acquisition, development, or construction of or the conversion of
the cooperative in excess of the amounts disclosed in the public offering
statement pursuant to § 55.1-2155 or 55.1-2156, nor shall the cooperative or
any proprietary lessee&#8217;s interest be encumbered by a security interest for
any greater amount incurred for such purposes, and (ii) the declarant shall not
amend the public offering statement to change the amounts disclosed after
conveyance of the first unit to a proprietary lessee. However, the amounts
disclosed shall not be subject to adjustment such that the association or the
proprietary lessees are subjected to the construction or market risks of the
declarant.

HISTORY: 2004, c. 242, § 55-473.1; 2019, c. 712.