Virginia Code 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.
Terms Used In Virginia Code 55.1-2216
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Appraisal: A determination of property value.
- Association: means the association organized under the provisions of § Virginia Code 55.1-2200
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Developer: means any person or group of persons acting in concert that (i) offers to dispose of a time-share or its interest in a time-share unit for which there has not been a previous disposition or (ii) applies for registration of the time-share program. See Virginia Code 55.1-2200
- disposition: means a transfer of a legal or equitable interest in a time-share, other than a transfer or release of security for a debt. See Virginia Code 55.1-2200
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Managing agent: means a person that undertakes the duties, responsibilities, and obligations of the management of a time-share project. See Virginia Code 55.1-2200
- Managing entity: means the managing agent or, if there is no managing agent, the time-share owners' association in a time-share estate project and the developer in a time-share use project. See Virginia Code 55.1-2200
- owner: means a person that is an owner or co-owner of a time-share other than as security for an obligation. See Virginia Code 55.1-2200
- program: means any arrangement of time-shares in one or more time-share projects by which the use, occupancy, or possession of real property has been made subject to either a time-share estate or time-share use in which such use, occupancy, or possession circulates among owners of the time-shares according to a fixed or floating time schedule on a periodic basis occurring over any period of time in excess of five years. See Virginia Code 55.1-2200
- project: means all of the real property subject to a time-share program created by the execution of a time-share instrument. See Virginia Code 55.1-2200
- Purchaser: means any person other than a developer or lender that owns or acquires a product or that otherwise enters into a contract for the purchase of a product. See Virginia Code 55.1-2200
- State: when applied to a part of the United States, includes any of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, and the United States Virgin Islands. See Virginia Code 1-245
- Time-share: means either a time-share estate or a time-share use plus its incidental benefits. See Virginia Code 55.1-2200
- Time-share use: means a right to occupy a time-share unit or any of several time-share units during five or more separated time periods over a period of at least five years, including renewal options, not coupled with a freehold estate or an estate for years in a time-share project or a specified portion of such time-share project. See Virginia Code 55.1-2200
- Trustee: A person or institution holding and administering property in trust.
- unit: means the real property or real property improvement in a project that is divided into time-shares and designated for separate occupancy and use. See Virginia Code 55.1-2200
B. A time-share project may be terminated in whole or in part by the developer 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. Any such termination shall be accomplished by the developer or the association executing and recording a termination 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.
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 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, 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 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.
1981, c. 462, § 55-373; 1985, c. 517; 2006, c. 653; 2019, c. 712; 2024, cc. 546, 602.