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2022 SESSION
22100638DBe it enacted by the General Assembly of Virginia:
1. That § 58.1-3970.1 of the Code of Virginia is amended and reenacted as follows:
§ 58.1-3970.1. Appointment of special commissioner to execute title to certain real estate with delinquent taxes or liens to localities.
A. Except as provided in subsection B, in any proceedings
under this article for the sale of a parcel or parcels of real estate which that
meet all of the following: (i) each parcel has delinquent real estate taxes or
the locality has a lien against the parcel for removal, repair or securing of a
building or structure; removal of trash, garbage, refuse, litter; or the
cutting of grass, weeds or other foreign growth, (ii) each parcel has an
assessed value of $75,000 or less, and (iii)
(a) such taxes and liens, together, including penalty and accumulated
interest, exceed 50 percent of the assessed value of the parcel or,
(b) such taxes alone exceed 25 percent of the assessed
value of the parcel, or (c)
for parcels containing a
structure that is a derelict
building, as that term is defined in § 15.2-907.1, such
taxes and liens, together, including penalty and accumulated interest, exceed
10 percent of the assessed value of the parcel, the
locality may petition the circuit court to appoint a special commissioner to
execute the necessary deed or deeds to convey the real estate to the locality in lieu of the sale at public
auction, in lieu of the sale
at public auction, to the locality, to the locality's land bank entity, or to
an existing nonprofit entity designated by the locality to carry out the functions
of a land bank entity pursuant to § 15.2-7512. After notice
as required by this article, service of process, and upon answer filed by the
owner or other parties in interest to the bill in equity, the court shall allow
the parties to present evidence and arguments, ore tenus, prior to the
appointment of the special commissioner. Any surplusage accruing to a locality, land bank entity, or
existing nonprofit entity as a result of the sale of the
parcel or parcels after the receipt of the deed shall be payable to the
beneficiaries of any liens against the property and to the former owner, his
heirs or assigns in accordance with § 58.1-3967. No deficiency shall be charged
against the owner after conveyance to the locality,
land bank entity, or existing nonprofit entity. For purposes of this section,
"land bank entity" and "existing nonprofit entity" mean the
same as those terms are defined in § 15.2-7500.
B. For a parcel or parcels of real estate in a locality with a
score of 100 or higher on the fiscal stress index, as published by the
Department of Housing and Community Development in July 2020, all of the
provisions of subsection A shall apply except (i) that the percentage of taxes
and liens, together, including penalty and accumulated interest, and the
percentage of taxes alone set forth in clause clauses (iii) (a) and (b)
of subsection A shall exceed 35 percent and 15 percent, respectively, of the
assessed value of the parcel or parcels or (ii) that the percentage of taxes and
liens, together, including penalty and accumulated interest, and the percentage
of taxes alone set forth in clause clauses (iii) (a) and (b)
of subsection A shall exceed 20 percent and 10 percent, respectively, of the
assessed value of the parcel or parcels, and each parcel has an assessed value
of $150,000 or less, provided that under this clause the property is not an
occupied dwelling, and the locality enters into an agreement for sale of the
parcel to a nonprofit organization to renovate or construct a single-family
dwelling on the parcel for sale to a person or persons to reside in the
dwelling whose income is below the area median income.
C. For sales by a nonprofit organization pursuant to subsection B, such sales may include either (i) both the land and the structural improvements on a property or (ii) only the structural improvements of a property and not the land the structural improvements are located on. A sale of only the structural improvements is permissible only if (a) the structural improvements are subject to a ground lease with a community land trust, as that term is defined in § 55.1-1200; (b) the structural improvements are subject to a ground lease that has a term of at least 90 years; and (c) the community land trust retains a preemptive option to purchase such structural improvements at a price determined by a formula that is designed to ensure that the improvements remain affordable in perpetuity to low-income and moderate-income families earning less than 120 percent of the area median income, adjusted for family size.