55-59 - How deed of trust construed; duties, rights, etc., of parties. - Virginia Statutes

§ 55-59. How deed of trust construed; duties, rights, etc., of parties.

Every deed of trust to secure debts or indemnify sureties is in the nature ofa contract and shall be construed according to its terms to the extent not inconflict with the requirements of law. Unless otherwise provided therein, itshall be construed to impose and confer upon the parties thereto, and thebeneficiaries thereunder, the following duties, rights and obligations inlike manner as if the same were expressly provided for by such deed of trust:

1. The deed shall be construed as given to secure the performance of each ofthe covenants entered into by the grantor as well as the payment of theprimary obligation.

2. The grantor shall be deemed to covenant that he will pay all taxes,levies, assessments and charges upon the property, including the fees andcharges of such agents or attorneys as the trustee may deem advisable toemploy at any time for the purpose of the trust, so long as any obligationupon the grantor under the deed of trust remains undischarged.

3. The grantor shall be deemed to covenant that he will keep the improvementson the property in tenantable condition, whether such improvements were onthe property when the deed of trust was given or were thereafter placedthereon.

4. The grantor shall be deemed to covenant that no waste shall be committedor suffered upon the property.

5. The grantor shall be deemed to covenant that in the event of his failureto meet any obligations imposed upon him then the trustee or any beneficiarymay, at his option, satisfy the same. The money so advanced, with interestthereon as provided in the deed of trust, shall be a part of the debt securedby the deed of trust, in the event of sale to be paid next after the expensesof executing the trust, and shall be otherwise recoverable from the grantoras a debt. In addition, to the extent not otherwise covered, the grantorshall be deemed to covenant that amount advanced or incurred by the trusteeor any beneficiary under a deed of trust (i) with respect to an obligationsecured by a lien or encumbrance prior to the lien of the deed of trust or(ii) for the protection of the lien secured by the deed of trust, togetherwith interest as provided in the deed of trust, shall be a part of the debtsecured by the deed of trust, to be paid next after expenses of executing thetrust.

6. A covenant to pay interest shall be deemed a covenant to pay interest onthe principal balance as such rate may vary or be modified from time to timeby the parties under the original instruments or agreements or a writtenagreement of modification, whether or not recorded, and all the interest onthe principal secured by the deed of trust shall be on an equal priority withthe principal debt secured by the deed of trust, in the event of sale to bepaid next after the expenses of executing the trust.

Any covenant, otherwise authorized by law, that the lender shall be entitledto share in the gross income or the net income, or the gross rent orrevenues, or net rents or revenues of the property, or in any portion of theproceeds or appreciation upon sale or appraisal or similar event, shall be onan equal priority with the principal debt secured by the deed of trust, inthe event of sale to be paid next after the expenses of executing the trust,and shall be specified in the recorded deed of trust or other recordeddocument in order to be notice of record as against subsequent parties.

7. In the event of default in the payment of the debt secured, or any partthereof, at maturity, or in the payment of interest when due, or of thebreach of any of the covenants entered into or imposed upon the grantor, thenat the request of any beneficiary the trustee shall forthwith declare all thedebts and obligations secured by the deed of trust at once due and payableand may take possession of the property and proceed to sell the same atauction at the premises or in the front of the circuit court building or atsuch other place in the city or county in which the property or the greaterpart thereof lies, or in the corporate limits of any city surrounded by orcontiguous to such county, or in the case of annexed land, in the county ofwhich the land was formerly a part, as the trustee may select upon such termsand conditions as the trustee may deem best.

8. If the sale is upon credit terms, the deferred purchase money shall bearinterest from the day of sale and shall be secured by a deed of trust uponthe property contemporaneous with the trustee's deed to the purchaser.

9. The party secured by the deed of trust, or the holders of greater thanfifty percent of the monetary obligations secured thereby, shall have theright and power to appoint a substitute trustee or trustees for any reasonand, regardless of whether such right and power is expressly granted in suchdeed of trust, by executing and acknowledging an instrument designating andappointing a substitute. When the instrument of appointment has beenexecuted, the substitute trustee or trustees named therein shall be vestedwith all the powers, rights, authority and duties vested in the trustee ortrustees in the original deed of trust. The instrument of appointment shallbe recorded in the office of the clerk wherein the original deed of trust isrecorded prior to or at the time of recordation of any instrument in which apower, right, authority or duty conferred by the original deed of trust isexercised.

(Code 1919, § 5167; 1922, p. 364; 1926, p. 591; 1940, p. 879; 1944, p. 481;1952, c. 370; 1954, c. 557; 1956, c. 674; 1960, c. 5; 1964, c. 501; 1968, c.786; 1970, c. 12; 1973, c. 341; 1976, c. 257; 1977, cc. 151, 314, 660; 1979,c. 12; 1980, c. 709; 1981, c. 591; 1992, cc. 87, 193; 1993, c. 426; 1994, c.551.)