                                 CODE OF VIRGINIA

APPOINTMENT OF SPECIAL COMMISSIONER TO EXECUTE TITLE TO CERTAIN REAL ESTATE WITH
DELINQUENT TAXES OR LIENS TO LOCALITIES (§ 58.1-3970.1)

A. 1. Except as provided in subsection B, in any proceedings under this article
for the sale of a parcel or parcels of real estate that meet all of the
following: (i) each parcel has delinquent real estate taxes or the locality has
a lien against the parcel for removal, repair, or securing of a building or
structure; removal of trash, garbage, refuse, or litter; or the cutting of
grass, weeds, or other foreign growth; (ii) each parcel has an assessed value of
$75,000 or less; and (iii) (a) such taxes and liens, together, including penalty
and accumulated interest, exceed 50 percent of the assessed value of the parcel,
(b) such taxes alone exceed 25 percent of the assessed value of the parcel, or
(c) for parcels containing a structure that is a derelict building, as that term
is defined in § 15.2-907.1, such taxes and liens, together, including penalty
and accumulated interest, exceed 25 percent of the assessed value of the parcel,
the locality may petition the circuit court to appoint a special commissioner to
execute the necessary deed or deeds to convey the real estate, in lieu of the
sale at public auction, to the locality, to the locality&#8217;s land bank
entity, or to an existing nonprofit entity designated by the locality to carry
out the functions of a land bank entity pursuant to § 15.2-7512. After notice
as required by this article, service of process, and upon answer filed by the
owner or other parties in interest to the complaint, the court shall allow the
parties to present evidence and arguments, ore tenus, prior to the appointment
of the special commissioner. Any surplusage accruing to a locality, land bank
entity, or existing nonprofit entity as a result of the sale of the parcel or
parcels after the receipt of the deed shall be payable to the beneficiaries of
any liens against the property and to the former owner or his heirs, devisees,
successors, or assigns in accordance with § 58.1-3967. No deficiency shall be
charged against the owner after conveyance to the locality, land bank entity, or
existing nonprofit entity.

   2. A land bank entity or existing nonprofit entity receiving any parcel
   pursuant to this section shall either (i) sell the property to a third party
   in an arms-length transaction or, if the land bank entity or existing
   nonprofit entity develops the property before selling it, make such sale
   within a reasonable period of time after completing such development or (ii)
   if the land bank entity or existing nonprofit entity does not intend to sell
   the property, pay to the beneficiaries of any liens against the property and
   to the former owner or his heirs, devisees, successors, or assigns any amount
   of surplusage, if any, that would result if the property were sold and the
   proceeds distributed in accordance with &#xA7; 58.1-3967. For purposes of this
   section, &#8220;existing nonprofit entity&#8221; and &#8220;land bank
   entity&#8221; have the same meaning as those terms are defined in &#xA7;
   15.2-7500.

B. For a parcel or parcels of real estate in a locality with a score of 100 or
higher on the fiscal stress index, as published by the Department of Housing and
Community Development in July 2020, all of the provisions of subsection A shall
apply except (i) that the percentage of taxes and liens, together, including
penalty and accumulated interest, and the percentage of taxes alone set forth in
clauses (iii) (a) and (b) of subdivision A 1 shall exceed 35 percent and 15
percent, respectively, of the assessed value of the parcel or parcels or (ii)
that the percentage of taxes and liens, together, including penalty and
accumulated interest, and the percentage of taxes alone set forth in clauses
(iii) (a) and (b) of subdivision A 1 shall exceed 20 percent and 10 percent,
respectively, of the assessed value of the parcel or parcels, and each parcel
has an assessed value of $150,000 or less, provided that under this clause the
property is not an occupied dwelling, and the locality enters into an agreement
for sale of the parcel to a nonprofit organization to renovate or construct a
single-family dwelling on the parcel for sale to a person or persons to reside
in the dwelling whose income is below the area median income.

C. For sales by a nonprofit organization pursuant to subsection B, such sales
may include either (i) both the land and the structural improvements on a
property or (ii) only the structural improvements of a property and not the land
the structural improvements are located on. A sale of only the structural
improvements is permissible only if (a) the structural improvements are subject
to a ground lease with a community land trust, as that term is defined in &#xA7;
55.1-1200; (b) the structural improvements are subject to a ground lease that
has a term of at least 90 years; and (c) the community land trust retains a
preemptive option to purchase such structural improvements at a price determined
by a formula that is designed to ensure that the improvements remain affordable
in perpetuity to low-income and moderate-income families earning less than 120
percent of the area median income, adjusted for family size.

HISTORY: 1999, c. 869; 2003, cc. 16, 156; 2004, c. 968; 2011, c. 688; 2012, cc.
87, 610; 2014, c. 519; 2015, c. 379; 2019, cc. 159, 541; 2020, c. 244; 2021, Sp.
Sess. I, c. 408; 2022, cc. 15, 713; 2025, c. 267.