                                 CODE OF VIRGINIA

NONDISTURBANCE PROVISIONS (§ 59.1-333)

With respect to any property in this Commonwealth acquired and put into
operation by a membership camping operator after July 1, 1985, the membership
camping operator shall neither offer nor execute a membership camping contract
in this Commonwealth granting the right to use such property until:

1. Each person holding an interest in a blanket encumbrance shall have executed
and delivered a nondisturbance agreement which includes the following
provisions: (i) that the rights of the owner or owners of the blanket
encumbrance in the affected campground are subordinate to the rights of
purchasers, and (ii) that any person who acquires the affected campground or any
portion thereof by the exercise of any right of sale or foreclosure contained in
such agreement shall take the same subject to the rights of the purchasers, and
(iii) that the owner or owners of the blanket encumbrance shall not use or cause
the property to be used in any manner which interferes with the right of the
purchasers to use the campground and its facilities in accordance with the terms
and conditions of the membership camping contract. Such agreement shall be
recorded in the clerk&#8217;s office of the circuit court in which the property
is located; and

2. Every financial institution providing a major hypothecation loan to the
membership camping operator (the &#8220;hypothecation lender&#8221;) which has a
lien on, or security interest in the membership camping operator&#8217;s
ownership interest in the campground shall have executed and delivered a
nondisturbance agreement and recorded such agreement in the clerk&#8217;s office
of the circuit court in which the campground is located. In addition, each
person holding an interest in a blanket encumbrance superior to the interest
held by the hypothecation lender shall have executed, delivered and recorded an
instrument stating that such person shall give the hypothecation lender notice
of, and at least thirty days to cure, any default under the blanket encumbrance
before such person commences any foreclosure action affecting the campground.
For the purposes of this provision, a major hypothecation loan to a membership
camping operator is a loan or line of credit secured by substantially all of the
contracts receivable arising from the membership camping operator&#8217;s sale
of membership camping contracts; or

3. There shall have been delivered to and accepted by the Commissioner a surety
bond or letter of credit satisfying the following requirements: The surety bond
or letter of credit shall be issued to the Commissioner for the benefit of
purchasers and shall be in an amount which is not less than 105 percent of the
remaining principal balance of every indebtedness secured by a blanket
encumbrance affecting the campground. Such bond shall be issued by a surety
authorized to do business in this Commonwealth and having sufficient net worth
to satisfy the indebtedness. Such letter of credit shall be irrevocable and
shall be drawn upon a bank, savings and loan, or financial institution and shall
be in form and content acceptable to the Commissioner. The bond or letter of
credit shall provide for payment of all amounts secured by the blanket
encumbrance, including costs, expenses, and legal fees of the lien holder, if
for any reason the blanket encumbrance is enforced. The bond or letter of credit
may be reduced at the option of the membership camping operator periodically in
proportion to the reductions of the amounts secured by the blanket encumbrance.

4. The nondisturbance agreement may be amended provided the provisions of this
section are not diminished or altered by the amendment.

HISTORY: 1985, c. 409.