The Virginia Common Interest Community Board adopted revised regulations to implement a new law that changed the existing bond and escrow account requirements for developers for time share projects. Previously, the developer had to maintain an escrow account and post a surety bond or other security equal to $25,000 or the total amount of the deposits, whichever is greater.
The new law provides that a bond or letter of credit is optional as an alternative to escrow deposits and only applies if the time share project has more than 25 units. An individual bond or LOC will be posted if the deposit total is less than $10,000, otherwise a blanket bond may be furnished in an amount based on the total of the deposits, ranging from $75,000 to $1 million. If the amount of the deposits exceeds $1 million, the bond must be equal to the deposits.
The revised regulations provide for the submission of a blanket bond and require compliance with the revised bonding requirements in the new law. The revised regulations were adopted without a proposal so that there was no opportunity to comment.
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