Chap. 426.—An ACT to amend and re-enact Section 5167 of the Code of Virginia,
as heretofore amended, relating to deeds of trusts. [H B 107]

Approved April 2, 1940

1. Be it enacted by the General Assembly of Virginia, That
section fifty-one hundred and sixty-seven of the Code of Virginia, as
since amended, be amended and re-enacted so as to read as
ollows:

Section 5167. How such deed of trust construed and effect of
certain words therein; duties, rights and obligations of the parties
ind beneficiaries; duties of clerks upon recordation.—Every deed of
‘rust to secure debts or indemnify sureties, except so far as may be
therein otherwise provided, shall be construed to impose and confer
upon the parties thereto, and the beneficiaries thereunder, the following
duties, rights and obligations, in like manner as if the same were
expressly provided for by such deed of trust, namely: |

(1) The deed shall be construed as given to secure the perform-
ance of each of the covenants entered into the grantor as well as the
payment of the primary obligation.

(2) The grantor shall be deemed to covenant that he will pay
all taxes, levies, assessments and charges upon the property, including
the fees and charges of such agents or attorneys as the trustee may
deem advisable to employ at any time for the purpose of the trust,
so long as any obligation upon the grantor under the deed of trust
remains undischarged.

(3) The grantor shall be deemed to covenant that he will keep
the improvements on the property in tenantable condition, whether
such improvements were on the property when the deed of trust was
given or were thereafter placed thereon.

(4) The grantor shall be deemed to covenant that no waste shall
be committed or suffered upon the property.

(5) The grantor shall be deemed to covenant that in the event
of his failure to meet any obligations imposed upon him that the
trustee or any beneficiary may, at his option, satisfy the same; and
the money so advanced with interest thereon shall be a part of the
debt secured by the deed, in the event of sale to be paid next after
the expenses of executing the trust, and shall be otherwise recoverable
from the grantor as a debt.

(6) In the event of default in the payment of the debt secured,
or any part thereof, at maturity, or in the payment of interest when
due, or of the breach on any of the covenants entered into or imposec
upon the grantor, then at the request of any beneficiary the trustee
shall forthwith declare all the debts and obligations secured by the
deed of trust at once due and payable, shall take possession of the
property and proceed to sell the same at auction at the premises (01
at such other place as the trustee may select) upon such terms anc
conditions as the trustee may deem best, after first advertising the
time, place and terms of sale in such manner as the deed may provide
or, if none be provided, after first advertising the time, place anc
terms of sale once a week for four successive weeks in a newspape
published or having general circulation in the county, should th
amount secured in said deed of trust exclusive of interest exceed th
sum of five hundred dollars no notice to the grantor or his successo
in title being required.

(7) If the property is located in a city, or in a county in which <
city or a part thereof is located, publication of the advertisement five
times in a newspaper published in such city (the last insertion if de
sired on the day of sale) shall be deemed adequate; it not being in.
tended, however, to declare that other and different advertisemen:
may not in any case be deemed reasonable, nor to prevent the trustees
from giving the sale such additional advertisement as he may deer
advisable.

(8) If the deed of trust itself provides a method of advertising
which may be done by using the words ‘‘advertisement required’’, o1
words of like purport, followed by the method agreed on, then nc
other or different advertisement shall be necessary, beyond what the
deed calls for, though the trustee may, in his discretion, give further
advertisement.

(9) The trustee may postpone the sale at his discretion, in such
case giving such notice of advertisement of such postponement as he
may deem reasonable, without meaning to declare any other method
unreasonable, when the advertisement is by publication in a news-
paper the continuation thereof in the subsequent issues of such news-
paper with a note of such adjournment appended shall be deemed
adequate in the absence of contrary provision in the deed of trust.

(10) The trustee may require of any bidder at any sale a cash
deposit of not exceeding one hundred dollars, (unless the deed of trust
specifies a different maximum, which may be done by the words,
““bidder’s deposit of not more than............ dollars may be re-
quired,’’ or words of like purport), before his bid is received, which
shall be refunded to the bidder unless the property is sold to him,
otherwise to be applied to his credit in settlement, or should he fail
to complete his purchase promptly to be applied to pay the costs and
expenses of sale and the balance, if any, to be retained by the trustee
as his compensation in connection with that sale.

(11) If the sale be upon credit terms the deferred purchase money
shall bear interest from the day of sale and shall be secured by a deed
of trust upon the property contemporaneous with the trustee’s deed
to the purchaser. The clerk of the court upon admitting to record
the deed of such trustee conveying property held in trust shall note
a reference to same on the margin of the deed book where the deed
or other writing conveying the property to such trustee in trust is
recorded, if the same can be found in his office.

(12) The trustee shall receive and receipt for the proceeds of
sale, no purchaser being required to see to the application of the
proceeds, and apply the same, first, to discharge the expenses of
executing the trust, including a commission to the trustee of five per
centum of the gross proceeds of sale; secondly, to discharge all taxes,
levies, and assessments, with costs and interest, including the due
pro-rata thereof for the current year; thirdly, to discharge in the
order of their priority, if any, the remaining debts and obligations
secured by the deed, with lawful interest; and, fourthly, the residue
of the proceeds shall be paid to the grantor or his assigns; provided,
however, that the trustee as to such residue shall not be bound by
any inheritance, devise, conveyance, assignment or lien of or upon
the grantor’s equity, without actual notice thereof prior to distribu-
tion.

(13) Upon discharge of all the debts, duties and obligations im-
posed by the deed upon the grantor, including any expenses incurred
preparatory to sale, then upon the grantor’s request the trustee shall
execute and deliver a good and sufficient deed of release at the grantor’s
own proper costs and charges.

The following provisions may be incorporated in any such deed
of trust in the respective short forms indicated, namely:

(a) The words ‘identified by trustee’s signature,’’ or words of
like purport, shall be construed as if the deed set forth: “All of which
said notes (or other obligations) bear the marginal signature of the
trustee for the purpose of identification but for no other purpose
whatever.”

(b) The words ‘‘deferred purchase money,” or words of like pur-
port, shall be construed as if the deed set forth: ‘This deed of trust is
a contemporaneous purchase money deed of trust and secures the
payment of deferred purchase money due by the grantor upon the
property hereby conveyed.”

(c) The words “exemptions waived,” or words of like purport,
shall be construed as if the deed set forth: ‘The grantor hereby
waives the benefit of his exemptions as to the debt hereby secured
and as to all other obligations which may be imposed upon him by
the provisions of this deed of trust.”’

(d) The words ‘‘subject to all upon default,’ or words of like
purport, shall be construed as if the deed set forth: “Should default
be made in the payment of any payment of any part of the debt
hereby secured, prinicipal or interest, at the maturity of such part, or
in the event of the breach of any of the covenants entered into or
imposed upon the grantor, then the entire obligation of this deed of
trust and the whole debt hereby secured shall, at the option of the
beneficiaries, become forthwith due and payable.”’

(e) The words “renewal or extension permitted,’’ or words of
like purport, shall be construed as if the deed set forth: “The grantor
hereby consents and agrees that the debt hereby secured, or any
part thereof, may be renewed or extended beyond maturity as often
as may be desired by agreement between the creditor and any sub-
sequent owner of the property, and no such renewal or extension shall
in any way affect the grantor’s responsibility, whether as surety or
otherwise.”’

(f) The words “right of anticipation reserved”, or words of like
purport, shall be construed as if the deed set forth: ‘“The grantor re-
serves the right to anticipate the payment of the debt hereby secured,
or any part thereof which is represented by a separate note (or other
obligation) at any interest period by the payment of principal and
interest to the date of such anticipated payment only.”

(g) The words “priority in direct order of maturity,” or words
of like purport, shall be construed as if the deed set forth: ‘“The notes
(or other obligations) hereby secured have priority amongst them-
selves in the direct order of their maturities, each having priority
over all others falling due after its maturity.”’ And the words, ‘‘priority
in inverse order of maturity,’’ or words of like purport, shall be con-
strued as if the deed set forth: ‘‘The notes (or other obligations) hereby
secured have priority amongst themselves in the inverse order of their
maturities, each having priority over all others falling due before its
maturity.’

(h) The words ‘‘insurance required................... dollars,”’
or words of similar purport, shall be construed as if the deed set forth:
“The grantor covenants that he will keep the improvements on the
property insured against fire in some solvent insurance company ap-
proved by the trustee for the benefit of the beneficiaries hereunder in
the sum of at least................ dollars, and will deposit with the
trustee the policies, with standard loss payable clauses with full con-
tribution in favor of the trustee as his interest may appear; and the
grantor further covenants that in the event of his failure to keep the
property so insured and the policies so deposited, then the trustee or
any beneficiary may, at his option, effect such insurance and pay the
premium thereon, and the money so paid, with interest thereon, shall
become a part of the debt hereby secured, in the event of sale to be
paid next after the expenses of executing this trust, and shall be other-
wise recoverable from the grantor as a debt, but there shall be no
obligation upon the trustee or beneficiary to effect such insurance.’