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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, 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.