CODE OF VIRGINIA

TERMINATION OF CONTRACTS AND LEASES OF DECLARANT (§ 55-462)

If entered into before the executive board elected by the proprietary lessees
pursuant to subsection F of § 55-460 takes office, (i) any management contract,
employment contract or lease of recreational or parking areas or facilities,
(ii) any other contract or lease between the association and a declarant or an
affiliate of a declarant, or (iii) any contract or lease that is not bona fide
or was unconscionable to the proprietary lessees at the time entered into under
the circumstances then prevailing, may be terminated without penalty by the
association at any time after the executive board elected by the proprietary
lessees pursuant to subsection F of § 55-460 takes office upon not less than 90
days’ notice to the other party. Notwithstanding the foregoing, a
management contract that is not unconscionable between an association directly
or indirectly providing assisted living or nursing services to proprietary
lessees and a declarant or an affiliate of a declarant may not be terminated
while a member of the executive board appointed by the declarant continues to
serve unless such termination is approved by a vote of a majority of the members
of the executive board and a majority vote of the proprietary lessees, other
than the declarant.This section does not apply to any proprietary lease or any
lease the termination of which would terminate the cooperative or reduce its
size, unless the real estate subject to that lease was included in the
cooperative for the purpose of avoiding the right of the association to
terminate a lease under this section. Nor shall this section apply to any
contract, incidental to the disposition of a cooperative interest, to provide to
a proprietary lessee for the duration of such proprietary lessee’s life,
or for any term in excess of one year, nursing services, medical services, other
health-related services, board and lodging and care as necessary, or any
combination of such services. The rule of property law known as the rule
restricting unreasonable restraints on alienation shall not be applied to defeat
any provision of the declaration, bylaws or proprietary leases requiring that
the proprietary lessees be parties to such contracts.

HISTORY: 1982, c. 277; 1985, c. 83; 2004, c. 242.