55-57.2 - Effect of option; recording. - Virginia Statutes

§ 55-57.2. Effect of option; recording.

A. Any option to purchase real estate, and any memorandum, renewal orextension thereof, shall be void as to (i) all purchasers for valuableconsideration without notice not parties thereto and (ii) lien creditors,until such instrument is recorded in the county or city where the propertyembraced in the option, memorandum, renewal or extension is located.

B. Notwithstanding any rule of law or equity denominated "fettering,""clogging the equity of redemption" or "claiming a collateral advantage"or any similar rule:

1. A party secured by a mortgage or deed of trust, without adverselyaffecting his security interest, may acquire from a borrower any direct orindirect present or future ownership interest in the collateral encumberedthereby, including rights to any income, proceeds or increase in valuederived from such collateral; and

2. An option to acquire an interest in real estate granted to a party securedby a mortgage or deed of trust, other than an option granted to such party inconnection with a mortgage loan as defined in § 6.1-409, is effectiveaccording to its terms and takes priority as provided in subsection A of thissection if the right to exercise the option is not dependent upon theoccurrence of a default under the mortgage or deed of trust.

(1989, c. 596.)