TITLE 55. PROPERTY AND CONVEYANCES.

§ 55-58.3 amended.
Property; subordinate mortgages. Includes in the definition of "subordinate mortgage" a mortgage that is subordinate in priority as the result of a previous refinancing. SB 549; CH. 172.

§ 55-66.3 amended.
Release of deed of trust or other lien. Authorizes a settlement agent who has paid the obligation secured by a mortgage or deed of trust to release the lien by executing and filing a certificate of satisfaction. This procedure is available only if the settlement agent has delivered a notice of intent to release the mortgage and a copy of the payoff letter to the lien creditor and the lien creditor does not within 90 days notify the settlement agent that (i) another release has been recorded, (ii) the obligation secured by the mortgage has not been paid, or (iii) the lien creditor otherwise objects to the release of the mortgage. This optional procedure applies only to transactions involving not more than four residential dwelling units. The bill also clarifies that a release of a deed of trust may be delivered by courier. HB 302; CH. 862.

§ 55-66.3 amended.
Property; release of liens. Clarifies that the obligor may provide the lien creditor with the name and address of the person to whom a certificate of satisfaction or of partial satisfaction shall be sent, and that if no such notice is provided, the certificate shall be delivered to the appropriate clerk's office. The bill provides that courier hand delivery with written proof of receipt from the clerk's office is an additional method of delivery for certificates of satisfaction. The bill also conforms the procedures applicable to the filing of such certificates when releases are made by original lien creditors or by subsequent note holders. SB 527; CH. 845.

§ 55-66.4:2. See § 17.1-213; SB 153.

§ 55-70.1 amended.
New home breach of warranty. Provides that in the event of a breach of warranty on a new home for any defect discovered after July 1, 2002, such vendee shall first provide the vendor, at his last known address, a notice sent by registered or certified mail stating the nature of the warranty claim. After such notice, the vendor shall have a reasonable period of time, not to exceed one year, to cure the defect, which is the subject of the warranty claim. Under current law there is no statutory opportunity to cure; there is only a cause of action created on behalf of the purchaser. HB 150; CH. 795.

§§ 55-79.41, 55-79.97, 55-509, and 55-512 amended; §§ 55-79.83:1 and 55-514.1 added.
Condominium and Property Owners' Association Acts; reserves for capital components. Provides that except to the extent otherwise provided in the governing document for condominiums or property owners' associations and unless such governing documents impose more stringent requirements, these associations are required to (i) conduct at least once every five years a study to determine the necessity and amount of reserves required to repair, replace and restore the capital components; (ii) review the results of that study at least annually to determine if reserves are sufficient; and (iii) make any adjustments the executive organ deems necessary to maintain reserves, as appropriate. The bill also requires these associations to provide a copy or summary of the reserve study report to prospective purchasers. "Capital components" are defined as items, whether or not a part of the common elements, for which the unit owners' association has the obligation for repair, replacement or restoration and for which the executive organ determines funding is necessary. The bill is a recommendation of the Housing Study Commission. SB 523; CH. 459.

§ 55-79.78 amended.
Virginia Condominium Act; officers. Provides that if the condominium instruments provide that any officer or officers of the executive organ of a unit owners' association must be unit owners, an officer may be disqualified from serving unless he disposes of all of his units in fee. Under current law such officer may be disqualified if his units are disposed of in fee and/or for a term or terms of six months or more. HB 198; CH. 520.

§§ 55-79.80:2, 55-79.97, 55-511, 55-512, and 55-513 amended.
Condominium and Property Owners' Associations; preparation of disclosure information, rule enforcement, and resale by purchasers. Allows, with the consent of the purchaser, the electronic delivery of the resale certificate in the case of a condominium, and the disclosure package for property owners' associations. The bill also (i) allows these associations to provide the required disclosures by electronic means with the consent of the seller and purchaser and (ii) authorizes these associations to charge certain additional costs for providing the required disclosures. The bill further provides for the settlement agent, when transmitting funds to an association to provide either the HUD-1 settlement statement or the name of the seller, the name and address of the purchaser, the address of the subject property, the date of settlement, and a brief explanation of the application of any funds transmitted. SB 519; CH. 509.

§ 55-106.4. See 13.1-1200; SB 512.

§§ 55-210.31 through 55-210.37 added.
Property loaned to museums. Establishes a procedure for museums to acquire title to property loaned to the museum on and after July 1, 2002, if, unless otherwise provided by written agreement, more than five years have passed from the receipt by the museum of written communication concerning the loaned property and the lender has not displayed any interest in the property. Loaned property shall be deemed to have been donated to the museum if no action to recover the property is initiated within one year after the museum gave notice of termination of the loan of the property. Museums are required to inform lenders of this provision. Notice of termination of a loan of property may be given at any time if the property was loaned to the museum for an indefinite time. If the property was loaned to the museum for a specified term, the museum may give notice of termination of the loan at any time after the expiration of the specified term. The museum shall mail a notice to the lender at the most recent address. If no address is available, notice shall be published once a week for three weeks. After publishing the required notices, the museum may acquire clear and unrestricted legal title to undocumented property if the museum can verify through written records that it has held such property for five years or longer, during which period no valid claim to the property has been asserted and no person has contacted the museum regarding the property. HB 1066; CH. 883.

§§ 55-248.4 and 55-248.9 amended; § 55-248.7:1 added.
Virginia Residential Landlord and Tenant Act; definitions; prepaid rent. Allows a tenant to offer and a landlord to accept prepaid rent and requires such prepaid rent to be placed in an escrow account by the end of the fifth business day following receipt and remain in that account until such time as the rent becomes due. The bill also provides that a bond or commercial insurance policy purchased by a tenant to secure the performance of the terms or conditions of a rental agreement shall not be considered as a security deposit as defined by the Act. In addition, the bill adds prepaid rent and nonrefundable pet fees to the definition of rent and provides that the definition of "tenant" does not include (i) an authorized occupant, (ii) a guest or invitee, or (iii) any person who guarantees or cosigns the payment of the financial obligations of a rental agreement but has no right to occupy a dwelling unit. "Authorized occupant" is defined as a person entitled to occupy a dwelling unit with the consent of a landlord under a rental agreement with a tenant. HB 502; CH. 531.

§ 55-248.21:1 amended.
Virginia Residential Landlord Tenant Act; early termination of rental agreements by military personnel. Prohibits a landlord from requiring a tenant to pay liquidated damages if the tenant has resided in the property for more than 12 months. HB 243; CH. 760.

§ 55-248.33 amended.
Virginia Residential Landlord Tenant Act; abandonment. Establishes a process to be followed by the landlord if he is unable to determine whether a tenant has abandoned the premises. HB 245; CH. 761.

§ 55-248.38:1 amended.
Virginia Residential Landlord Tenant Act; disposal of property abandoned by tenants. Allows a landlord to dispose of abandoned personal property after the rental agreement has terminated and delivery of possession has occurred provided the landlord gives certain notice to the tenant. HB 246; CH. 762.

§ 55-428 amended.
Virginia Real Estate Cooperative Act; taxation. Provides that a residential cooperative association shall not be deemed to be a business for certain state and local taxation purposes. Also, the bill requires that any tangible personal property owned by such associations that would be considered household goods and personal effects if owned by an individual to be considered as such for local property tax purposes. The bill also classifies certain tangible personal property of residential cooperative associations as household goods and personal effects making such property eligible for exemption from local tangible personal property taxes. HB 647; CH. 34.

§§ 55-511 and 55-512 amended.
Virginia Property Owners' Association Act; association disclosure packet. Provides that the contents of the association disclosure packet include the fully completed one-page form the Real Estate Board is required to develop containing certain information about property owners' associations. HB 478; CH. 399.

§§ 55-531 and 55-532 amended.
Property of nonprofit health care entities. Provides that the conversion of a nonprofit entity to a for-profit entity constitutes a disposition of assets that must be reported to the Attorney General. The measure also provides that a "nonprofit entity" includes any foreign or domestic nonstock corporation licensed and subject to regulation under Chapter 42 of Title 38.2, which generally refers to health services plans, i.e., "Blue Shield" plans. SB 680; CH. 516.

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