Vermont § 2-118 - Termination of common interest community

§ 2-118. Termination of common interest community

• (a) Except in the case of a taking of all the units by eminent domain or in the circumstances
  described in section 2-124 of this title, a common interest community may be terminated only by agreement of unit owners of
  units to which at least 80 percent of the votes in the association is allocated or
  any larger percentage the declaration specifies, and with any other approvals required
  by the declaration. The declaration may specify a smaller percentage only if all the
  units are restricted exclusively to nonresidential uses. (b) An agreement to terminate shall be executed or ratified in the same manner as a deed
  by the requisite number of unit owners. The termination agreement shall specify a
  date after which the agreement is void unless it is recorded. A termination agreement
  and all ratifications of it shall be recorded in each town in which a portion of the
  common interest community is situated. (c) In the case of a common interest community containing only units having horizontal
  boundaries described in the declaration, a termination agreement may provide that
  all the common elements and units of the common interest community shall be sold following
  termination. If, pursuant to the agreement, any real estate in the common interest
  community is to be sold following termination, the termination agreement shall set
  forth the minimum terms of the sale. (d) In the case of a common interest community containing any units not having horizontal
  boundaries described in the declaration, a termination agreement may provide for sale
  of the common elements, but may not require that the units be sold following termination,
  unless the declaration as originally recorded provided otherwise or unless all the
  unit owners consent to the sale. (e) The association on behalf of the unit owners may contract for the sale of real estate
  in a common interest community, but the contract is not binding on the unit owners
  until approved pursuant to subsections (a) and (b) of this section. If any real estate
  is to be sold following termination, title to that real estate upon termination vests
  in the association as trustee for the holders of all interests in the units. Thereafter,
  the association has all powers necessary and appropriate to effect the sale. Until
  the sale has been concluded and the proceeds distributed, the association continues
  in existence with all powers it had before termination. Proceeds of the sale shall
  be distributed to unit owners and lienholders as their interests appear, in accordance
  with subsections (h), (i), and (j) of this section. Unless otherwise specified in
  the termination agreement, while the association holds title to the real estate, each
  unit owner and the unit owner’s successors in interest have an exclusive right to
  occupy the portion of the real estate that formerly constituted his or her unit. During
  the period of that occupancy, each unit owner and the unit owner’s successors in interest
  remain liable for all assessments and other obligations imposed on unit owners by
  this title or the declaration. (f) If the real estate constituting the common interest community is not to be sold following
  termination, title to the common elements and, in a common interest community containing
  only units having horizontal boundaries described in the declaration, title to all
  the real estate in the common interest community vests in the unit owners upon termination
  as tenants in common in proportion to their respective interests as provided in subsection
  (j) of this section and liens on the units shift accordingly. While the tenancy in
  common exists, each unit owner and the unit owner’s successors in interest have an
  exclusive right to occupy the portion of the real estate that formerly constituted
  his or her unit. (g) Following termination of the common interest community, the proceeds from the sale
  of real estate and assets of the association are held by the association as trustee
  for unit owners and holders of liens on the units as their interests may appear. (h) Following termination of the common interest community, creditors of the association
  holding liens on the units that were recorded pursuant to 12 V.S.A. § 2904 before termination may enforce those liens in the same manner as any lienholder.
  All other creditors of the association shall be treated as if they had perfected liens
  on the units immediately before termination. (i) The respective interests of unit owners referred to in subsections (e), (f), (g),
  and (h) of this section are as follows: (1) Except as otherwise provided in subdivision (2) of this subsection, the respective
  interests of unit owners are the fair market values of their units, allocated interests,
  and any limited common elements immediately before the termination as determined by
  one or more independent appraisers selected by the association. The independent appraisals
  shall be distributed to the unit owners and become final unless the unit owners to
  whom 25 percent or more of the votes in the association are allocated disapprove the
  appraisal. A unit owner’s interest is determined by dividing the fair market value
  of that unit owner’s unit and its allocated interests by the total fair market value
  of all the units and their allocated interests. (2) If any unit or any limited common element is destroyed to the extent that an appraisal
  of its fair market value before destruction cannot be made, the interests of all unit
  owners are: (A) in a condominium, their respective common element interests immediately before the
  termination; (B) in a planned community, their respective common expense liabilities immediately before
  the termination. (j) Except as provided in subdivision (i)(1) of this section, foreclosure or enforcement
  of a lien or encumbrance against the entire common interest community does not terminate
  the common interest community, and foreclosure or enforcement of a lien or encumbrance
  against a portion of the common interest community, other than withdrawable real estate,
  does not withdraw that portion from the common interest community. Foreclosure or
  enforcement of a lien or encumbrance against withdrawable real estate does not, of
  itself, withdraw that real estate from the common interest community, but the person
  taking title to it has the right to request from the association an amendment excluding
  the real estate from the common interest community. (k) If a lien or encumbrance against a portion of the real estate comprising the common
  interest community has priority over the declaration and the lien or encumbrance has
  not been partially released, the parties foreclosing the lien or encumbrance may,
  upon foreclosure, record an instrument excluding the real estate subject to that lien
  or encumbrance from the common interest community. (Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999; amended 2009, No. 155 (Adj. Sess.), § 21, eff. Jan. 1, 2012.)