                                 CODE OF VIRGINIA

EFFECT OF OPTION; RECORDING (§ 55.1-315)

A. Any option to purchase real estate, and any memorandum, renewal, or extension
of such option, shall be void as to (i) all purchasers for valuable
consideration without notice who are not parties to such instrument and (ii)
lien creditors, until such instrument is recorded in the county or city in which
the property embraced in the option, memorandum, renewal, or extension is
located.

B. Notwithstanding any rule of law or equity denominated
&#8220;fettering,&#8221; &#8220;clogging the equity of redemption&#8221; or
&#8220;claiming a collateral advantage&#8221; or any similar rule:

   1. A party secured by a mortgage or deed of trust, without adversely affecting
   his security interest, may acquire from a borrower any direct or indirect
   present or future ownership interest in the collateral encumbered thereby,
   including rights to any income, proceeds, or increase in value derived from
   such collateral; and

   2. An option to acquire an interest in real estate granted to a party secured
   by a mortgage or deed of trust, other than an option granted to such party in
   connection with a mortgage loan as defined in &#xA7; 6.2-1600, is effective
   according to its terms and takes priority as provided in subsection A if the
   right to exercise the option is not dependent upon the occurrence of a default
   under the mortgage or deed of trust.

HISTORY: 1989, c. 596, § 55-57.2; 2019, c. 712.