Code of Virginia

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Code of Virginia
Title 55.1. Property and Conveyances
Subtitle I. Property Conveyances
Chapter 4. Fraudulent and Voluntary Conveyances; Writings Necessary to Be Recorded
1/30/2023

Chapter 4. Fraudulent and Voluntary Conveyances; Writings Necessary to Be Recorded.

§ 55.1-400. Void fraudulent acts; bona fide purchasers not affected.

Every (i) gift, conveyance, assignment, or transfer of, or charge upon, any estate, real or personal, (ii) action commenced or order, judgment, or execution suffered or obtained, and (iii) bond or other writing given with intent to delay, hinder, or defraud creditors, purchasers, or other persons of or from what they are or may be lawfully entitled to shall, as to such creditors, purchasers, or other persons or their representatives or assigns, be void. This section shall not affect the title of a purchaser for valuable consideration, unless it appears that he had notice of the fraudulent intent of his immediate grantor or of the fraud rendering void the title of such grantor.

Code 1919, § 5184; Code 1950, § 55-80; 2019, c. 712.

§ 55.1-401. Voluntary gifts, conveyances, assignments, transfers, or charges; void as to prior creditors.

Every gift, conveyance, assignment, transfer, or charge that is not upon consideration deemed valuable in law, or that is upon consideration of marriage by an insolvent transferor or by a transferor who is thereby rendered insolvent, shall be void as to creditors whose debts were contracted at the time such gift, conveyance, assignment, transfer, or charge was made but shall not, on that account merely, be void as to creditors whose debts have been contracted, or as to purchasers who have purchased, after such gift, conveyance, assignment, transfer, or charge was made. Even though it is decreed to be void as to a prior creditor, because voluntary or upon consideration of marriage, it shall not, for that cause, be decreed to be void as to subsequent creditors or purchasers.

Code 1919, § 5185; Code 1950, § 55-81; 1988, c. 512; 2019, c. 712.

§ 55.1-402. Creditor's action to avoid such gifts, conveyances, assignments, transfers, or charges.

Before obtaining a judgment for his claim, a creditor may, whether such claim is due and payable or not, institute any action that he may institute after obtaining such judgment to avoid a gift, conveyance, assignment, or transfer of, or charge upon, the estate of his debtor declared void by either § 55.1-400 or 55.1-401. Such creditor may, in such action, have all the relief with respect to such estate to which he would be entitled after obtaining a judgment for the claim for which he may be entitled to recover. A creditor availing himself of this section shall have a lien from the time of bringing his action on all the estate, real and personal, and a petitioning creditor shall also be entitled to a lien from the time of filing his petition in the court in which the action is brought. If the proceeds of sale are insufficient to satisfy the claims of all the creditors whose liens were acquired at the same time, they shall be applied proportionately to such claims, and the court may issue an order against the debtor for any deficiency remaining on the claim of any creditor after applying his share of the proceeds of sale, or, if any creditor is not entitled to share in such proceeds, may issue an order against the debtor for the full amount of the creditor's claim. This section is subject to the provisions of §§ 8.01-268 and 8.01-269.

Code 1919, § 5186; Code 1950, § 55-82; 1926, p. 874; 2009, c. 593; 2019, c. 712.

§ 55.1-403. Creditor's action; attorney fees.

In any action brought by a creditor pursuant to § 55.1-400, 55.1-401, or 55.1-402, where a (i) gift; (ii) deed; (iii) conveyance, assignment, or transfer of or charge upon the estate of a debtor; (iv) action commenced or judgment or execution suffered or obtained; or (v) bond or other writing is declared void, the court shall award counsel for the creditor reasonable attorney fees against the debtor. Upon a finding of fraudulent conveyance pursuant to § 55.1-400, the court may assess sanctions, including such attorney fees, against all parties over which it has jurisdiction who, with the intent to defraud and having knowledge of the judgment, participated in the conveyance. Should there be a resulting judicial sale, any award of attorney fees shall be paid out of the proceeds of the sale, as other costs are paid, provided that the award of attorney fees does not affect a prior lien creditor not represented by the attorney.

2009, c. 593, § 55-82.1; 2012, c. 810; 2019, c. 712.

§ 55.1-404. Authority of court to set aside.

The court may set aside a fraudulent conveyance or voluntary transfer pursuant to § 55.1-400 or 55.1-401 during an action brought by a creditor to execute on a judgment, either on motion of the creditor or on its own motion, provided that all parties who have an interest in the property subject to the conveyance or transfer are given notice of the proceeding. The court, by order, may direct the clerk to issue the proper process against such parties and, upon the maturing of the case, proceed to make such orders as would have been proper if the new parties had been made parties at the commencement of the action.

2012, c. 810, § 55-82.2; 2019, c. 712.

§ 55.1-405. Loans and reservations of a use or property to be recorded.

When any loan of personal property is pretended to have been made to any person with whom, or with those claiming under him, possession has remained five years without demand made and pursued by due process of law on the part of the pretended lender, or when any reservation or limitation is pretended to have been made of a use or property by way of condition, reversion, remainder, or otherwise in personal property, the possession of which has so remained in another as aforesaid, the absolute property shall be taken to be with the possession and such loan, reservation, or limitation void as to creditors of, and purchasers from, the person so remaining in possession, unless such loan, reservation, or limitation is declared by will which, or a copy of which, or by deed or other writing which, is duly recorded within a period of five years in the circuit court of the county or city in which the personal property is located.

Code 1919, § 5188; Code 1950, § 55-87; 2019, c. 712.

§ 55.1-406. Certain recorded contracts as valid as deeds.

Any such contract or bill of sale as is mentioned in § 11-1, if in writing and signed by the owner of the property, shall, from the time it is duly recorded, be, as against creditors and purchasers, as valid, so far as it affects real estate, as if the contract were a deed conveying the estate or interest embraced in the contract and, so far as it affects goods and chattels, as if possession had completely passed at the time of such recording, provided that, as to goods whose possession is retained by a merchant-seller, the provisions of subsection (2) of § 8.2-402 of the Uniform Commercial Code shall be controlling and provided further that, if any such contract or bill of sale as is mentioned in § 11-1 creates a security interest as defined in the Uniform Commercial Code, its validity and enforceability shall be governed by the provisions of that Code.

Code 1919, § 5193; Code 1950, § 55-95; 1964, c. 314; 1966, c. 399; 2019, c. 712.

§ 55.1-407. Contracts, etc., void as to creditors and purchasers until recorded; priority of credit line deed of trust.

A. 1. Every (i) contract in writing; (ii) deed conveying any estate or term; (iii) deed of gift, or deed of trust, or mortgage conveying real estate or personal property; and (iv) bill of sale, or contract for the sale of personal property, when the possession is allowed to remain with the grantor, shall be void as to all purchasers for valuable consideration without notice not parties thereto and lien creditors, until and except from the time it is recorded in the county or city in which the property subject to such contract, deed, or bill of sale is located. The fact that any such instrument is in the form of or contains the terms of a quit-claim or release shall not prevent the grantee from being a purchaser for valuable consideration without notice, nor be of itself notice to such grantee of any unrecorded conveyance of or encumbrance upon such real estate or personal property. The mere possession of real estate shall not, of itself, be notice to purchasers for value of any interest or estate therein of the person in possession. As to personal property whose possession is retained by a merchant-seller, the provisions of subsection (2) of § 8.2-402 of the Uniform Commercial Code shall control. This section shall not apply to any security interest in personal property under the Uniform Commercial Code. Any bill of sale or contract for the sale of personal property when possession is allowed to remain with the grantor shall be deemed to be duly recorded when it is filed in the same manner as Uniform Commercial Code financing statements are filed under the criteria and in the places established by § 8.9A-501 as if the grantor were a debtor and the grantee a secured party. A recordation under the provisions of this section shall, when any real estate subject to the lien of any such contract has been annexed to or merged with an adjoining city subsequent to such docketing, be deemed to have been recorded in the proper clerk's office of such city.

2. The clerk of each court in which any such instrument is by law required to be recorded shall keep a daily index of all such instruments admitted to record in his office, and, immediately upon recording such instrument, the clerk shall index the same either in the daily index or the appropriate general index of his office. All instruments indexed in the daily index shall be indexed by the clerk in the appropriate general index within 90 days after recording. During the period permitted for transfer from the daily index to the general index, indexing in the daily index shall be a sufficient compliance with the requirements of this section as to indexing.

3. a. In any circuit court in which any such instrument required to be recorded is not recorded on the same day as delivered, the clerk shall install a time stamp machine. The time stamp machine shall affix the current date and time of each delivery of any instrument delivered to the clerk for recording that is not immediately recorded and entered into the general or daily index.

b. In the event that a time stamp machine has not been installed or is not functioning, the clerk shall designate an employee to affix the current date and time of each delivery of any instrument delivered to the clerk for recording.

c. In any circuit court in which instruments required to be recorded are not recorded on the same day as delivered, for purposes of subdivision 1, the term "from the time it is recorded" shall be presumed to be the date and time affixed upon the instrument by the time stamp machine or affixed by the clerk in accordance with subdivision b unless the clerk determines that the applicable requirements for recordation of the instrument have not been satisfied.

d. The provisions of subdivision 3 shall not apply to certificates of satisfaction or partial satisfaction or assignments of deeds of trust delivered to the clerk's office other than by hand.

B. A credit line deed of trust, recorded pursuant to § 55.1-318, is valid and has priority over any (i) contract in writing, deed, conveyance, or other instrument conveying any such estate or term subsequently recorded or (ii) judgment subsequently docketed as to all advances made under such credit line deed of trust from the date of recordation of such credit line deed of trust, whether or not the particular advance or extension of credit has been made or unconditionally committed at the time of delivery or recordation of such contract in writing, deed, or other instrument or the docketing of such judgment. Any judgment creditor shall have the right to give the notice contemplated by § 55.1-318 and, from the day following receipt of such notice, the judgment as docketed shall have priority over all subsequent advances made pursuant to the credit line deed of trust except those that have been unconditionally and irrevocably committed prior to such date. Mechanics' liens created under Title 43 shall continue to have the same priority as created by that title. Purchase money security interests in goods and fixtures shall have the same priority as provided in Part 3 of Title 8.9A (§ 8.9A-317 et seq.).

Code 1919, § 5194; 1922, p. 474; 1944, p. 356; Code 1950, § 55-96; 1964, cc. 219, 309, 314; 1966, c. 400; 1974, c. 522; 1982, c. 230; 1984, c. 19; 1988, c. 51; 2003, c. 776; 2014, c. 267; 2019, c. 712.

§ 55.1-408. Where to be recorded.

Notwithstanding that any writing is recorded in one county or city in which there is real estate or personal property, it nevertheless is void as to such creditors and purchasers in respect to other real estate or personal property without such recording until it is duly recorded in the county or city in which such other real estate or personal property may be located, but it shall be sufficient to record a deed releasing the lien of a deed of trust, in whole or in part, either in the county or city in which the property thereby released is located or in the county or city in which the property so released was situated at the time of the recordation of the deed of trust, and any recordation thereof so made of any such release is hereby validated.

Code 1919, § 5195; Code 1950, § 55-97; 2019, c. 712.

§ 55.1-409. Recordation of instruments affecting civil aircraft of United States.

No instrument that affects the title to or interest in any civil aircraft of the United States, as defined by federal law, or any portion of such aircraft, shall be valid in respect of such aircraft or portion of such aircraft against any person other than the person by whom the instrument is made or to whom the instrument is given, his heir or devisee, and any person having actual notice of such instrument, until such instrument is recorded in the office of the Administrator of the Federal Aviation Administration of the United States, or such other office as is designated by the laws of the United States as the one in which such instruments should be filed. Every such instrument so recorded in such office shall be valid as to all persons without further recordation in any office in the Commonwealth, the provisions of any other recordation statute to the contrary notwithstanding. Any instrument for which recordation is required by the provisions of this section shall take effect from the date of its recordation and not from the date of its execution.

1946, p. 387; Michie Suppl. 1946, § 5194a; Code 1950, § 55-100; 2019, c. 712.

§ 55.1-410. Priority of writings when admitted to record same day.

Unless otherwise provided for in this chapter, when two or more writings pertaining to the same property are recorded in the same county or city on the same day and stamped with the identical time, the instrument number shall determine the writing that was first recorded. The instrument that was first recorded shall have priority with respect to the property in such county or city.

Code 1919, § 5198; Code 1950, § 55-101; 1987, c. 104; 2019, c. 712.

§ 55.1-411. When writings to be recorded in county, and when in city.

The provisions of this and any other chapter of the Code or of any subsequent statute, by virtue of which a writing is to be or may be recorded in the county or city in which the property embraced in such writing is located, shall be construed, in respect to the county, as relating only to property within the county and outside the corporate limits of the city having a court in which writings may be lawfully recorded, and, in respect to the city, as relating only to property within the corporate limits of such city having such a court.

Code 1919, § 5199; Code 1950, § 55-102; 2019, c. 712.

§ 55.1-412. Words "creditors" and "purchasers," how construed.

The words "creditors" and "purchasers," when used in any previous section of this chapter, shall not be restricted to the protection of creditors of and purchasers from the grantor, but shall also extend to and embrace all creditors and purchasers who, but for the deed or writing, would have had title to the property conveyed or a right to subject it to their debts.

Code 1919, § 5200; Code 1950, § 55-103; 2019, c. 712.

§ 55.1-413. Lien of subsequent purchaser for purchase money paid before notice.

As against any person claiming under the deed or other writing that has not been recorded before payment by a subsequent purchaser for valuable consideration of the whole or a part of his purchase money, such subsequent purchaser, notwithstanding such deed or other writing recorded before he becomes a complete purchaser, shall have a lien on the property purchased by him for so much of his purchase money as he may have paid before notice of such lien.

Code 1919, § 5200; Code 1950, § 55-104; 2019, c. 712.

§ 55.1-414. When purchaser not affected by record of deed or contract.

A purchaser shall not, under this chapter, be affected by the record of a deed or contract made by a person under whom his title is not derived, nor by the record of a deed or contract made by any person under whom the title of such purchaser is derived, if it was made by such person before he acquired the legal title of record.

Code 1919, § 5201; Code 1950, § 55-105; 2019, c. 712.