Bill Text: VA SB600 | 2024 | Regular Session | Chaptered
Bill Title: Virginia Real Estate Time-Share Act; partial termination of certain time-shares.
Spectrum: Bipartisan Bill
Status: (Passed) 2024-04-05 - Governor: Acts of Assembly Chapter text (CHAP0602) [SB600 Detail]
Download: Virginia-2024-SB600-Chaptered.html
Be it enacted by the General Assembly of Virginia:
1. That §55.1-2216 of the Code of Virginia is amended and reenacted as follows:
§55.1-2216. Termination of certain time-shares.
A. This section applies to all time-share estate programs and, when provided by the time-share instrument, to time-share use programs.
B. A time-share project may be terminated in whole or in
part by the developer at or the association:
1. At any time and for any reason if such developer
or association is the sole owner of all time-shares within the time-share
project, or in the case of a partial termination, is the sole owner of all
time-shares within the phase, building, or other independent division being
terminated and if the developer or association, or its managing agent,
certifies in the partial termination agreement that such partial termination
will not materially and adversely affect the rights of the remaining time-share
owners, nor reduce the time-share program's ability to satisfy the occupancy
rights of the remaining time-share owners using the units in the phases,
buildings, or other interdependent divisions of the project that are not
subject to termination and describes any amendment to the time-share instrument
necessary for the developer or association, or its managing agent, to make such
certification. Such Any such termination shall be
accomplished by the developer or the association executing and recording
a termination document agreement or partial termination agreement
where the time-share instrument is recorded, along with any amendment to the
time-share instrument necessary to accurately describe the surviving time-share
project and satisfy therefrom the occupancy rights of the remaining time-share
owners.
Time-shares subject to this section also may be terminated
by 2. By written termination agreement or by vote of
the time-share owners having at least 51 percent of the time-shares or by a
written termination agreement or vote of such larger percentage
of the time-share owners as may otherwise be provided in the time-share
instrument. The termination agreement shall specify a date upon which it shall
become void, unless it is recorded before that date in the clerk's office of
the appropriate court where the time-share project is located.
C. 1. If the termination agreement, or association
vote authorizing the same, sets forth the material terms of a contract or
proposed contract under which an estate or interests equal to the sum of the
time-shares are to be sold and designates a trustee to effect the sale, the
termination agreement becomes effective upon recordation, and title to that
estate or interest vests upon termination such recordation in the
trustee for the benefit of the affected time-share owners, to be
transferred by the trustee to the purchaser pursuant to the contract.
In a partial termination, the termination agreement shall also (i) include an
explanation of the purpose of the partial termination to establish the manner
in which it supports the enforcement and protection of existing interests and
rights; (ii) identify the units and common areas that will survive the partial
termination; (iii) provide that such units and common areas remain in the
time-share form of ownership pursuant to an amendment to the time-share
instrument or an amended and restated time-share instrument; and (iv) in the
event that the terminated property will continue to have access, use rights,
parking rights, or other rights in the remaining time-share project, provide
the circumstances and details regarding such use and access, including how
costs will be shared. If the termination agreement requires that any property
in the time-share project be sold or otherwise disposed of following
termination, title to the property, upon recordation of the termination
agreement, shall vest in the association as trustee for the benefit of the
affected time-share owners. Thereafter, the association shall have all powers
necessary and appropriate to effect the sale or disposition of such property.
In a partial termination, title to the surviving units and common areas that
remain part of the time-share project specified in the termination agreement
shall remain vested in the ownership shown in the public records and shall not
vest in the termination trustee.
2. If the termination agreement does not set forth the
material terms of a contract or proposed contract under which an estate or
interests equal to the sum of the time-shares are to be sold and designates
a trustee to effect the sale, the termination agreement becomes effective
upon recordation, and title to an estate or interests equal to the sum of the
time-shares therein vests upon termination recordation in the
affected time-share owners in proportion to their respective interests as
provided in subsection F. Liens on the time-shares shall accordingly encumber
the respective interests; and in this instance, any co-owner of that
estate or interest may maintain an action for partition or for allotment or
sale in lieu of partition pursuant to the laws of the Commonwealth.
D. 1. Except as otherwise specified in the termination agreement, so long as the former time-share owners or their trustee holds title to the estate or interests equal to the sum of the time-shares, each former time-share owner and his successor in interest have the same rights with respect to the use, enjoyment, and occupancy in the former time-share unit that such former time-share owner and his successor in interest would have had if termination had not occurred, together with the same liabilities and other obligations imposed by this act or the time-share instrument.
2. The approval of a plan of termination shall not terminate the association. Until the termination has been concluded and the proceeds of any sale have been distributed, the association shall continue in existence with all of the powers that the association had prior to termination. In a partial termination, the association shall continue in the performance of its duties as the time-share association for the property that remains subject to the time-share program. The termination or partial termination of a time-share project shall not bar the filing of a new time-share instrument by the association, the termination trustee, or a successor in interest for the terminated property or any portion thereof.
E. After termination of all or a part of the time-shares in a time-share project and adequate provision for payment of the claims of the creditors for time-share expenses, distribution shall be made, in proportion to their respective interests as provided in subsection F, to the former time-share owners and their successors in interest of (i) the proceeds of any sale pursuant to this section, (ii) the proceeds of any sale of personalty held for the use and benefit of the former time-share owners, and (iii) any other funds held for the use and benefit of the former time-share owners.
F. The time-share instrument may specify the respective fractional or percentage interest that will be owned by each former time-share owner after termination, in accordance with the provisions of this section. Otherwise, not more than 180 days prior to the termination, an appraisal shall be made of the fair market value of each time-share by one or more impartial qualified appraisers selected either by the trustee designated in the termination agreement or by the managing entity if no trustee was so designated. The appraisal shall also state the corresponding fractional or percentage interests calculated in proportion to those values and in accordance with this subsection. A notice stating all of those values and corresponding interests and the return address of the sender shall be sent by certified or registered mail, by the managing entity or the trustee designated in the termination agreements, to all of the time-share owners. The appraisal governs the magnitude of each interest unless (i) at least 25 percent of the time-share owners deliver, within 60 days after the date the notices were mailed, written disapprovals to the return address of the sender of the notice or (ii) the final judgment of a court of competent jurisdiction, entered during or after that period, holds that the appraisal should be set aside. The appraisal and the calculation of interests shall be made in accordance with the following:
1. If the termination agreement sets forth the material terms of a contract or proposed contract for the sale of the estate or interests equal to the sum of the time-shares, each time-share conferring a right of occupancy during a limited number of time periods shall be appraised as if the time until the date specified for the conveyance of the property had already elapsed. Otherwise, each time-share of that kind shall be appraised as if the time until the date specified pursuant to subsection B had already elapsed.
2. The interest of each time-share owner is the value of the time-share he owned divided by the sum of the values of all time-shares in the unit or units to which his time-share applies.
G. Foreclosure or enforcement of a lien or encumbrance against all of the time-shares in a time-share project does not of itself terminate those time-shares.
H. Any legal challenge or action for damages or equitable relief arising out of any termination, in whole or in part, of a time-share project or program pursuant to this section shall be commenced within one year of the recordation of the termination agreement.
2. That the provisions of this act are effective retroactive in accordance with the provisions of §55.1-2201 of the Code of Virginia.
