The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
(Cite as: 27A V.S.A. § 2-119)
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§ 2-119. Rights of secured lenders
(a) The declaration may require that all or a specified number or percentage of the lenders
who hold security interests in the units or common elements approve specified actions
of the unit owners or the association as a condition to the effectiveness of those
actions, but lack of approval will not have the effect of:
(1) denying or delegating control over the general administrative affairs of the association
by the unit owners or the executive board;
(2) preventing the association or the executive board from participating in any litigation
or proceeding; or
(3) preventing an insurance trustee or the association from receiving and distributing
insurance proceeds except pursuant to section 3-113 of this title.
(b) A lender who has extended credit to an association secured by an assignment of income
(subdivision 3-102(a)(14) of this title) or an encumbrance on the common elements (section 3-112) may enforce its security
agreement in accordance with its terms, subject to the requirements of this title
and other law. Requirements that the association must deposit its periodic common
charges before default with the lender to which the association’s income has been
assigned, or increase its common charges at the lender’s direction by amounts reasonably
necessary to amortize the loan in accordance with its terms, do not violate the prohibitions
on lender approval contained in subsection (a) of this section. (Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.)