                                 CODE OF VIRGINIA

NOTICES REQUIRED BEFORE SALE BY TRUSTEE TO OWNERS, LIENORS, ETC.; IF NOTE LOST
(§ 55.1-321)

A. In addition to the advertisement required by &#xA7; 55.1-322, the trustee or
the party secured shall give written notice of the time, date, and place of any
proposed sale in execution of a deed of trust, and such notice shall include
either (i) the instrument number or deed book and page numbers of the instrument
of appointment filed pursuant to &#xA7; 55.1-320, or (ii) a copy of the executed
and notarized appointment of substitute trustee by personal delivery or by mail
to (a) the present owner of the property to be sold at his last known address as
such owner and address appear in the records of the party secured; (b) any
subordinate lienholder who holds a note against the property secured by a deed
of trust recorded at least 75 days, in the case of a deed of trust conveying
owner-occupied residential real estate, or 30 days, in the case of all other
deeds of trust, prior to the proposed sale and whose address is recorded with
the deed of trust; (c) any assignee of such a note secured by a deed of trust,
provided that the assignment and address of assignee are likewise recorded at
least 75 days, in the case of a deed of trust conveying owner-occupied
residential real estate, or 30 days, in the case of all other deeds of trust,
prior to the proposed sale; (d) any condominium unit owners&#8217; association
that has filed a lien pursuant to &#xA7; 55.1-1966; (e) any property
owners&#8217; association that has filed a lien pursuant to &#xA7; 55.1-1833;
and (f) any proprietary lessees&#8217; association that has filed a lien
pursuant to &#xA7; 55.1-2148. Written notice shall be given pursuant to clauses
(d), (e), and (f) only if the lien is recorded at least 75 days, in the case of
a deed of trust conveying owner-occupied residential real estate, or 30 days, in
the case of all other deeds of trust, prior to the proposed sale. If the secured
party has received notification that the owner of the property to be sold is
deceased, the notice required by clause (a) shall be given to (1) the last known
address of such owner as such address appears in the records of the party
secured; (2) any personal representative of the deceased&#8217;s estate whose
appointment is recorded among the records of the circuit court where the
property is located, at the address of the personal representative that appears
in such records; and (3) any heirs of the deceased who are listed on the list of
heirs recorded among the records of the circuit court where the property is
located, at the addresses of the heirs that appear in such records. Mailing of a
copy of the advertisement or a notice containing the same information to the
owner by certified or registered mail no less than 60 days prior to such sale,
in the case of a deed of trust conveying owner-occupied residential real estate,
or 14 days prior to such sale, in the case of all other deeds of trust, and to
lienholders, the property owners&#8217; association or proprietary
lessees&#8217; association, their assigns, and the condominium unit
owners&#8217; association, at the address noted in the memorandum of lien, by
ordinary mail no less than 60 days prior to such sale, in the case of a deed of
trust conveying owner-occupied residential real estate, or 14 days prior to such
sale, in the case of all other deeds of trust, shall be a sufficient compliance
with the requirement of notice. The written notice of proposed sale when given
as provided in this subsection shall be deemed an effective exercise of any
right of acceleration contained in such deed of trust or otherwise possessed by
the party secured relative to the indebtedness secured. The inadvertent failure
to give notice as required by this subsection shall not impose liability on
either the trustee or the secured party. The foreclosure sale cannot go forward
unless the trustee has proof that the notice has been sent.

A1. If the proposed sale is initiated due to a default in payment under a
security instrument that (i) was, at the time it was recorded, subordinate to
another security interest encumbering the same real property and (ii) has not
subsequently been elevated to a first priority lien by a recorded voluntary
subordination agreement, such subordinate mortgage lienholder shall submit to
the trustee an affidavit affirming whether monthly statements were sent to the
property owner for each period that any interest, fees, or other charges were
assessed. No such interest, fees, or other charges shall be assessed or charged
for any period during which periodic statements were not sent unless the
subordinate mortgage lienholder identifies a specific exemption pursuant to
applicable law for which such subordinate mortgage lienholder was not required
to send such specific statements for any period of time enumerated in the
affidavit. Such affidavit shall also include an itemized list of the current
amount owed, including any periods in which interest, fees, and other charges
were waived because no monthly statements were sent during such period. The
subordinate mortgage lienholder shall provide a copy of such affidavit to the
person required to pay the instrument with written notice that a request for
sale shall be made of the trustee upon the expiration of 60 days from the day of
mailing such notice. Such notice shall be sent by certified mail, return receipt
requested, to the last known mailing address of such person required to pay the
instrument. Such notice shall advise the person required to pay the instrument
that if such person believes that such interest, fees, or other charges have
been assessed in error, such person may, prior to the sale, petition the circuit
court of the city or county where such property or some part thereof lies for an
accounting and order declaring the proper balance secured by the subordinate
mortgage. If the court determines that charges were assessed in error, such
person shall be entitled to recover attorney fees and costs against the
subordinate mortgage lienholder. The provisions of this subsection shall not
apply to subordinate lienholders who are either (a) the original creditor, (b) a
mortgage servicer acting on behalf of the original creditor, (c) a national or
state chartered bank, or (d) a federal or state chartered credit union.

A2. Any purchaser at a foreclosure sale shall provide certification that such
purchaser shall pay off any priority security instruments no later than 90 days
from the date that the trustee&#8217;s deed conveying the property pursuant to
such sale is recorded in the land records. The person originally required to pay
the instrument shall have the right to petition the circuit court of the city or
county where the property or some part thereof lies to recover from the
purchaser any payments toward such priority lien amounts made by such person
required to pay the instrument after the date of the foreclosure sale, plus any
attorney fees and costs.

B. If a note or other evidence of indebtedness secured by a deed of trust is
lost or for any reason cannot be produced and the beneficiary submits to the
trustee an affidavit to that effect, the trustee may nonetheless proceed to
sale, provided that the beneficiary has given written notice to the person
required to pay the instrument that the instrument is unavailable and a request
for sale will be made of the trustee upon expiration of 60 days from the date of
mailing of the notice, in the case of a deed of trust conveying owner-occupied
residential real estate, or 14 days from the date of mailing of the notice, in
the case of all other deeds of trust. The notice shall be sent by certified
mail, return receipt requested, to the last known address of the person required
to pay the instrument as reflected in the records of the beneficiary and shall
include the name and mailing address of the trustee. The notice shall further
advise the person required to pay the instrument that if he believes he may be
subject to a claim by a person other than the beneficiary to enforce the
instrument, he may petition the circuit court of the county or city where the
property or some part thereof lies for an order requiring the beneficiary to
provide adequate protection against any such claim. If deemed appropriate by the
court, the court may condition the sale on a finding that the person required to
pay the instrument is adequately protected against loss that might occur by
reason of a claim by another person to enforce the instrument. Adequate
protection may be provided by any reasonable means. If the trustee proceeds to
sale, the fact that the instrument is lost or cannot be produced shall not
affect the authority of the trustee to sell or the validity of the sale.

C. When the written notice of proposed sale is given as provided in this
section, there is a rebuttable presumption that the lienholder has complied with
any requirement to provide notice of default contained in a deed of trust.
Failure to comply with the requirements of notice contained in this section
shall not affect the validity of the sale, and a purchaser for value at such
sale shall be under no duty to ascertain whether such notice was validly given.

D. In the event of postponement of sale, which may be done in the discretion of
the trustee, no new or additional notice is required to be given pursuant to
this section.

E. In the case of a deed of trust conveying owner-occupied residential real
estate, the notice to the owner in subsections A and B shall include the website
address of the U.S. Housing and Urban Development&#8217;s (HUD) Office of
Housing Counseling with a listing of HUD-certified housing counseling agencies,
the website address and telephone number of the statewide legal aid center, and
the following language, or language that is substantially similar, in at least
12-point type: &#8220;This is NOT a notice to vacate the premises. You should
consider contacting an attorney or your local legal aid or housing counseling
agency.&#8221;

F. In the case of a deed of trust conveying owner-occupied residential real
estate, the notice to the owner in subsections A and B shall include the date of
the last payment received and the amount received; the total amount of
principal, interest, costs, and fees due in arrears; and the remaining total
principal balance due on the instrument.

HISTORY: 1979, c. 12, § 55-59.1; 1992, c. 739; 1993, c. 597; 1994, c. 143;
2004, c. 1001; 2009, c. 307; 2018, cc. 34, 204; 2019, c. 712; 2021, Sp. Sess. I,
cc. 91, 92; 2024, c. 803.