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2002 SESSION
Be it enacted by the General Assembly of Virginia:
1. That § 55-66.3 of the Code of Virginia is amended and reenacted as follows:
§ 55-66.3. Release of deed of trust or other lien.
A. 1. When payment or satisfaction is made of a debt secured by mortgage, deed
of trust, vendor's lien, or other lien, or when any one or more of the
obligations representing at least twenty-five percent of the whole amount
secured by any such lien, but less than the whole number of the obligations so
secured, when the debt secured thereby is evidenced by two or more separate
written obligations sufficiently described in the instrument creating the lien,
have been fully paid, the lien creditor, unless he has delivered a proper
release deed, unless a proper release deed has been recorded, shall, within
ninety days after notice that the full or partial payment or satisfaction has been
made, cause such payment and release of lien to be recorded reflected on a
certificate of satisfaction or certificate of partial satisfaction in form
sufficient for recordation in the clerk's office. A lien creditor may satisfy
this requirement by mailing such certificate. If the notice of full or partial
payment or satisfaction includes a current name and address of the person to
whom the certificate of satisfaction or certificate of partial satisfaction
should be sent, the lien creditor shall deliver the certificate to such name
and address; however, if the settlement agent or obligor fails to provide a
name and address for delivery to the lien creditor, the lien creditor shall deliver the certificate
of satisfaction to the appropriate clerk’s office with the clerk's fee
necessary for recording by certified mail, return receipt requested, or by hand
delivery, when there is written proof of receipt from the clerk's office; or by
courier hand delivery, when there is written proof of receipt from the clerk’s
office. Any lien creditor who fails to satisfy this requirement as set forth
above or to cause such recordation as set forth in § 17.1-223 or to mail or
deliver to the obligor or the obligor's designee an executed certificate of
satisfaction within the ninety-day period the requirements of this subsection
shall forfeit $500 to the lien obligor. Following the ninety-day period,
if the amount forfeited is not paid within ten business days after demand for
payment, the lien creditor shall pay any court costs and reasonable attorney's
fees incurred by the obligor in collecting the forfeiture.
2. If the note, bond or other evidence of debt secured by such mortgage, deed
of trust, vendor's lien or other lien referred to in subdivision 1 of this
subsection or any interest therein, has been assigned or transferred to a party
other than the original lien creditor, and such subsequent holder is
responsible for a failure to record a certificate of satisfaction or certificate of
partial satisfaction or for a failure to mail or deliver to the appropriate clerk's
office the obligor or the obligor's designee an executed certificate of
satisfaction, the subsequent holder shall be liable to the lien obligor for the
$500 penalty, court costs and attorney's fees specified subject to the same
requirements as a lien creditor for failure to comply with this subsection, as set
forth in subdivision 1 of this subsection. It shall be the responsibility
of the obligor or owner to provide the note holder with a current name and address of the
person to whom the certificate of satisfaction or certificate of partial satisfaction should be
sent.
B. The certificate of satisfaction shall be signed by the creditor or his duly authorized agent, attorney or attorney-in-fact, or any person to whom the instrument evidencing the indebtedness has been endorsed or assigned for the purpose of effecting such release. An affidavit shall be filed or recorded with the certificate of satisfaction, by the creditor, or his duly authorized agent, attorney or attorney-in-fact, with such clerk, stating that the debt therein secured and intended to be released or discharged has been paid to such creditor, his agent, attorney or attorney-in-fact, who was, when the debt was satisfied, entitled and authorized to receive the same.
C. And when so signed and the affidavit hereinbefore required has been duly filed or recorded with the certificate of satisfaction with such clerk, the certificate of satisfaction shall operate as a release of the encumbrance as to which such payment or satisfaction is entered and, if the encumbrance be by deed of trust or mortgage, as a reconveyance of the legal title as fully and effectually as if such certificate of satisfaction were a formal deed of release duly executed and recorded.
D. As used in this section, the terms "lien creditor" and "creditor" shall be construed as synonymous and shall embrace the lien creditor or his successor in interest as evidenced by proper endorsement or assignment, general or restrictive, upon the note, bond or other evidence of debt. As used in this section, the term "obligor's designee" shall include an attorney or other settlement agent closing a transaction which results in the obligor's loan being paid off.