                                 CODE OF VIRGINIA

TERMINATION OF CERTAIN TIME-SHARES (§ 55.1-2216)

A. This section applies to all time-share estate programs and, when provided by
the time-share instrument, to time-share use programs.

B. A time-share project may be terminated in whole or in part by the developer
or the association:

   1. At any time and for any reason if such developer or association is the sole
   owner of all time-shares within the time-share project, or in the case of a
   partial termination, is the sole owner of all time-shares within the phase,
   building, or other independent division being terminated and if the developer
   or association, or its managing agent, certifies in the partial termination
   agreement that such partial termination will not materially and adversely
   affect the rights of the remaining time-share owners, nor reduce the
   time-share program&#8217;s ability to satisfy the occupancy rights of the
   remaining time-share owners using the units in the phases, buildings, or other
   interdependent divisions of the project that are not subject to termination
   and describes any amendment to the time-share instrument necessary for the
   developer or association, or its managing agent, to make such certification.
   Any such termination shall be accomplished by the developer or the association
   executing and recording a termination agreement or partial termination
   agreement where the time-share instrument is recorded, along with any
   amendment to the time-share instrument necessary to accurately describe the
   surviving time-share project and satisfy therefrom the occupancy rights of the
   remaining time-share owners.

   2. By written termination agreement or by vote of the time-share owners having
   at least 51 percent of the time-shares or by a written termination agreement
   or vote of such larger percentage of the time-share owners as may otherwise be
   provided in the time-share instrument. The termination agreement shall specify
   a date upon which it shall become void, unless it is recorded before that date
   in the clerk&#8217;s office of the appropriate court where the time-share
   project is located.

C. 1. If the termination agreement, or association vote authorizing the same,
sets forth the material terms of a contract or proposed contract under which an
estate or interests equal to the sum of the time-shares are to be sold and
designates a trustee to effect the sale, the termination agreement becomes
effective upon recordation, and title to that estate or interest vests upon such
recordation in the trustee for the benefit of the affected time-share owners, to
be transferred by the trustee to the purchaser pursuant to the contract. In a
partial termination, the termination agreement shall also (i) include an
explanation of the purpose of the partial termination to establish the manner in
which it supports the enforcement and protection of existing interests and
rights; (ii) identify the units and common areas that will survive the partial
termination; (iii) provide that such units and common areas remain in the
time-share form of ownership pursuant to an amendment to the time-share
instrument or an amended and restated time-share instrument; and (iv) in the
event that the terminated property will continue to have access, use rights,
parking rights, or other rights in the remaining time-share project, provide the
circumstances and details regarding such use and access, including how costs
will be shared. If the termination agreement requires that any property in the
time-share project be sold or otherwise disposed of following termination, title
to the property, upon recordation of the termination agreement, shall vest in
the association as trustee for the benefit of the affected time-share owners.
Thereafter, the association shall have all powers necessary and appropriate to
effect the sale or disposition of such property. In a partial termination, title
to the surviving units and common areas that remain part of the time-share
project specified in the termination agreement shall remain vested in the
ownership shown in the public records and shall not vest in the termination
trustee.

   2. If the termination agreement does not set forth the material terms of a
   contract or proposed contract under which an estate or interests equal to the
   sum of the time-shares are to be sold, the termination agreement becomes
   effective upon recordation, and title to an estate or interests equal to the
   sum of the time-shares therein vests upon recordation in the affected
   time-share owners in proportion to their respective interests as provided in
   subsection F. Liens on the time-shares shall accordingly encumber the
   respective interests; and in this instance, any co-owner of that estate or
   interest may maintain an action for partition or for allotment or sale in lieu
   of partition pursuant to the laws of the Commonwealth.

D. 1. Except as otherwise specified in the termination agreement, so long as the
former time-share owners or their trustee holds title to the estate or interests
equal to the sum of the time-shares, each former time-share owner and his
successor in interest have the same rights with respect to the use, enjoyment,
and occupancy in the former time-share unit that such former time-share owner
and his successor in interest would have had if termination had not occurred,
together with the same liabilities and other obligations imposed by this act or
the time-share instrument.

   2. The approval of a plan of termination shall not terminate the association.
   Until the termination has been concluded and the proceeds of any sale have
   been distributed, the association shall continue in existence with all of the
   powers that the association had prior to termination. In a partial
   termination, the association shall continue in the performance of its duties
   as the time-share association for the property that remains subject to the
   time-share program. The termination or partial termination of a time-share
   project shall not bar the filing of a new time-share instrument by the
   association, the termination trustee, or a successor in interest for the
   terminated property or any portion thereof.

E. After termination of all or a part of the time-shares in a time-share project
and adequate provision for payment of the claims of the creditors for time-share
expenses, distribution shall be made, in proportion to their respective
interests as provided in subsection F, to the former time-share owners and their
successors in interest of (i) the proceeds of any sale pursuant to this section,
(ii) the proceeds of any sale of personalty held for the use and benefit of the
former time-share owners, and (iii) any other funds held for the use and benefit
of the former time-share owners.

F. The time-share instrument may specify the respective fractional or percentage
interest that will be owned by each former time-share owner after termination,
in accordance with the provisions of this section. Otherwise, not more than 180
days prior to the termination, an appraisal shall be made of the fair market
value of each time-share by one or more impartial qualified appraisers selected
either by the trustee designated in the termination agreement or by the managing
entity if no trustee was so designated. The appraisal shall also state the
corresponding fractional or percentage interests calculated in proportion to
those values and in accordance with this subsection. A notice stating all of
those values and corresponding interests and the return address of the sender
shall be sent by certified or registered mail, by the managing entity or the
trustee designated in the termination agreements, to all of the time-share
owners. The appraisal governs the magnitude of each interest unless (i) at least
25 percent of the time-share owners deliver, within 60 days after the date the
notices were mailed, written disapprovals to the return address of the sender of
the notice or (ii) the final judgment of a court of competent jurisdiction,
entered during or after that period, holds that the appraisal should be set
aside. The appraisal and the calculation of interests shall be made in
accordance with the following:

   1. If the termination agreement sets forth the material terms of a contract or
   proposed contract for the sale of the estate or interests equal to the sum of
   the time-shares, each time-share conferring a right of occupancy during a
   limited number of time periods shall be appraised as if the time until the
   date specified for the conveyance of the property had already elapsed.
   Otherwise, each time-share of that kind shall be appraised as if the time
   until the date specified pursuant to subsection B had already elapsed.

   2. The interest of each time-share owner is the value of the time-share he
   owned divided by the sum of the values of all time-shares in the unit or units
   to which his time-share applies.

G. Foreclosure or enforcement of a lien or encumbrance against all of the
time-shares in a time-share project does not of itself terminate those
time-shares.

H. Any legal challenge or action for damages or equitable relief arising out of
any termination, in whole or in part, of a time-share project or program
pursuant to this section shall be commenced within one year of the recordation
of the termination agreement.

HISTORY: 1981, c. 462, § 55-373; 1985, c. 517; 2006, c. 653; 2019, c. 712;
2024, cc. 546, 602.