59.1-333 - Nondisturbance provisions.
§ 59.1-333. Nondisturbance provisions.
With respect to any property in this Commonwealth acquired and put intooperation by a membership camping operator after July 1, 1985, the membershipcamping operator shall neither offer nor execute a membership campingcontract in this Commonwealth granting the right to use such property until:
1. Each person holding an interest in a blanket encumbrance shall haveexecuted and delivered a nondisturbance agreement which includes thefollowing provisions: (i) that the rights of the owner or owners of theblanket encumbrance in the affected campground are subordinate to the rightsof purchasers, and (ii) that any person who acquires the affected campgroundor any portion thereof by the exercise of any right of sale or foreclosurecontained in such agreement shall take the same subject to the rights of thepurchasers, and (iii) that the owner or owners of the blanket encumbranceshall not use or cause the property to be used in any manner which interfereswith the right of the purchasers to use the campground and its facilities inaccordance with the terms and conditions of the membership camping contract.Such agreement shall be recorded in the clerk's office of the circuit courtin which the property is located; and
2. Every financial institution providing a major hypothecation loan to themembership camping operator (the "hypothecation lender") which has a lienon, or security interest in the membership camping operator's ownershipinterest in the campground shall have executed and delivered a nondisturbanceagreement and recorded such agreement in the clerk's office of the circuitcourt in which the campground is located. In addition, each person holding aninterest in a blanket encumbrance superior to the interest held by thehypothecation lender shall have executed, delivered and recorded aninstrument stating that such person shall give the hypothecation lendernotice of, and at least thirty days to cure, any default under the blanketencumbrance before such person commences any foreclosure action affecting thecampground. For the purposes of this provision, a major hypothecation loan toa membership camping operator is a loan or line of credit secured bysubstantially all of the contracts receivable arising from the membershipcamping operator's sale of membership camping contracts; or
3. There shall have been delivered to and accepted by the Commissioner asurety bond or letter of credit satisfying the following requirements: Thesurety bond or letter of credit shall be issued to the Commissioner for thebenefit of purchasers and shall be in an amount which is not less than 105percent of the remaining principal balance of every indebtedness secured by ablanket encumbrance affecting the campground. Such bond shall be issued by asurety authorized to do business in this Commonwealth and having sufficientnet worth to satisfy the indebtedness. Such letter of credit shall beirrevocable and shall be drawn upon a bank, savings and loan, or financialinstitution and shall be in form and content acceptable to the Commissioner.The bond or letter of credit shall provide for payment of all amounts securedby the blanket encumbrance, including costs, expenses, and legal fees of thelien holder, if for any reason the blanket encumbrance is enforced. The bondor letter of credit may be reduced at the option of the membership campingoperator periodically in proportion to the reductions of the amounts securedby the blanket encumbrance.
4. The nondisturbance agreement may be amended provided the provisions ofthis section are not diminished or altered by the amendment.
(1985, c. 409.)