55-473.1 - Limitation of assumption of debt and encumbrances. - Virginia Statutes

§ 55-473.1. Limitation of assumption of debt and encumbrances.

Unless approved by persons entitled to cast at least 80 percent of the votesin the association, including a simple majority of the votes allocated tocooperative interests not owned by a declarant or any larger percentage thedeclaration specifies: (i) the association shall not assume or take subjectto any debt, inclusive of any principal and interest accrued thereon,incurred in the original acquisition, development or construction of or theconversion of the cooperative in excess of the amounts disclosed in thepublic offering statement pursuant to § 55-478 or § 55-479, nor shall thecooperative or any proprietary lessee's interest be encumbered by a securityinterest for any greater amount incurred for such purposes and (ii) thedeclarant may not amend the public offering statement to change the amountsdisclosed after conveyance of the first unit to a proprietary lessee.Notwithstanding the foregoing, the amounts disclosed may not be subject toadjustment such that the association or the proprietary lessees are subjectedto the construction or market risks of the declarant.

(2004, c. 242.)