Code of Virginia § 64.2-535. When sale and conveyance within one year valid against creditors; proceeds paid to special commissioner; bond to obtain proceeds.

357 words·~2 min read·/va/title-64-2/chapter-5/64-2-535

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A. For purposes of this section:

"Net proceeds" means the purchase price for the real estate, including money, deferred purchase money obligations, and other securities, remaining after the payment of the expenses of sale ordinarily paid by the seller in sales of such real estate and the discharge of indebtedness and encumbrances that the real estate is primarily liable for by law.

B. Any sale and conveyance of real estate that is an asset for the payment of a decedent's debts or lawful demands against his estate pursuant to § 64.2-532 made within one year after the death of the decedent is valid against creditors of such decedent, if such real estate is sold and conveyed pursuant to a decree of a court of competent jurisdiction in an action for partition, sale of lands of persons under a disability, or other judicial sale, and the net proceeds of sale are paid to a special commissioner appointed by the court.

C. The special commissioner shall hold the net proceeds paid to him in lieu of the real estate subject to the claims of the decedent's creditors in the same manner and to the same extent as such real estate would have been if not sold until at least one year after the death of the decedent. If no claim has been asserted against the net proceeds, the special commissioner shall distribute the net proceeds to those creditors entitled thereto in proportion to their interest in the real estate upon

(i)the expiration of the one-year period or

(ii)at any time within the one-year period upon posting bond with such surety as may be prescribed by the court to secure any claims against the real estate or net proceeds.

D. A purchaser of any real estate sold and conveyed in accordance with this section is not required to see to the application of the purchase money.

E. The special commissioner who receives and holds such net proceeds or refunding bond shall give such bond as required by the court appointing him.

Code 1950, § 64-173.1; 1968, c. 656, § 64.1-184; 1996, c. 65 ; 2012, c. 614 .