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1450.08 RESALE AND NON-JUDICIAL FORECLOSURE SALE OF AN AFFORDABLE DWELLING UNIT (ADU) AFTER INITIAL SALE; ADU SALE CONTROL PRICE AND OTHER RESTRICTIONS; SUBSEQUENT RENTAL OF AN ADU AFTER INITIAL RENTAL; ADU RENTAL CONTROL PRICE AND OTHER RESTRICTIONS. (Applicable to Resale and Non Judicial Foreclosure Sale of ADUs subject to Declarations of Affordable Dwelling Units Covenants recorded in the Loudoun County’s land records on or after January 1, 2025).
(a) Resale and non-judicial foreclosure sale of an ADU.
(1) At the time of the initial sale of an ADU, the owner shall provide in the sales contract and shall record, prior to the deed for each ADU sold, a declaration of ADU covenant (“ADU Covenants”) running with the land in favor of the County. The ADU sale control price of an ADU shall be controlled for a period of thirty years after recordation of the deed from the initial sale of such ADU (“ADU thirty-year control period”). If within the ADU thirty-year control period the individual who initially purchased the ADU resells such ADU to the Board or its designee or to a new certified purchaser, the ADU thirty-year control period for that ADU will automatically renew for a new 30-year period commencing on the date of such resale (“Renewable ADU thirty-year control period”). Every time an ADU is resold within the ADU thirty-year control period or a Renewable ADU thirty-year control period, a new Renewable ADU thirty-year control period will automatically start from the date of the last resale. Each ADU thirty-year control period and each subsequent Renewable ADU thirty-year control period are a sales price control period subject to the adjusted ADU sale control price defined in sub-section (a)(1)(A) below. However, for any ADU that is owned by the same certified purchaser for the entire ADU thirty-year control period or the entire Renewable ADU thirty-year control period, after the termination of the ADU thirty-year control period or the Renewable ADU thirty-year control period, as applicable, the ADU sale control price shall terminate and the ADU may be sold in accordance with sub-section (a)(4) and (a)(5) hereof.
A. During the ADU thirty-year control period and any Renewable ADU thirty-year control period, such ADU shall not be the subject of a resale for an amount that exceeds the ADU sale control price determined by the ADUAB as adjusted in accordance with sub-section (a)(3) hereof (“Adjusted ADU Sale Control Price”).
B. Each time the ADU may be offered for resale, it must first be offered exclusively to certified purchasers through the Board, and then to the Board or its designee who may include a qualified non-profit, at Board’s discretion, for a period of forty-five days in accordance with sub-section (a)(2) hereof. An additional thirty days shall be allowed for settlement.
C. The ADU covenants shall provide that the ADU is subject to the provisions of the ADU Program, as set forth in this chapter and Chapter 9 of the County Zoning Ordinance.
D. The ADU covenants and any lien imposed on the ADU in favor of the County pursuant to this chapter shall be senior to all covenants, liens, mortgages, deeds of trust or other financing instruments secured by such ADU, that may be recorded after the ADU covenants, and shall be binding upon all assignees, lien holders, trustees, mortgagees, purchasers and other successors in interest.
E. Any lender, lien holder, or trustee, as applicable, shall provide to the Board or its designee written notice of any delinquency or other event of default under a mortgage, lien, deed of trust or any other financing instrument secured by such ADU. For a forty-five day period after receipt of such notice, the Board or its designee shall have the right to cure such a default, although the Board shall have no obligation to cure the default.
F. The total aggregate amount of principal of all financing instruments secured by an ADU shall not exceed the adjusted ADU sale control price of such ADU. Any financing in excess of such adjusted ADU sale control price shall not be secured by any interest in the applicable ADU.
(2) At least forty-five days prior to an ADU being offered for resale, such ADU shall first be offered exclusively to certified purchasers through the Board, and then to the Board or its designee who may include a qualified non-profit, at Board’s discretion. The forty-five-day resale period shall begin upon the Board’s receipt of written notice, sent by registered or certified mail that an ADU is available for resale. The written notice shall include the address and the parcel identification number of the ADU. An additional thirty-days shall be allowed for settlement.
A. Repealed.
B. Upon the expiration of the forty-five-day period, if neither a certified purchaser nor the Board or its designee, has elected to purchase the ADU, such ADU may be offered to members of the general public at fair market value, provided that the difference between the actual resale price of the ADU and the adjusted ADU sale control price shall be divided equally between the seller and the County Housing Trust.
(3) Units offered for resale during the ADU thirty-year control period or a Renewable ADU thirty-year control period shall not be offered for a price that exceeds the ADU sale control price determined by the ADUAB plus the following:
A. A percentage of the ADU sale control price determined by the ADUAB equal to the increase in the Consumer Price Index-For All Urban Consumers calculated as of the date of the resale;
B. The current fair market value of those home improvements, as determined to be eligible to be added to the selling price of ADUs by the ADUAB, made to the ADU between the date of the initial sale and the date of resale;
C. An allowance for payment of closing costs, on behalf of the purchaser, which shall be paid by the seller; and
D. An allowance for the payment of up to 1.5 percent sales commission/finder’s fee to be paid to a real estate agent, if any, who secures a purchaser for the ADU. ADUAB may, when necessary due to change in the market conditions in the County, revise the 1.5 percent sales commission/finder’s fee to another reasonable percentage.
(4) After the expiration of the ADU thirty-year control period or the expiration of a Renewable thirty-year control period, but prior to the expiration of twenty years after the expiration of the ADU thirty-year control period or the expiration of the Renewable thirty-year control period, as applicable (“ADU Extended Control Period”), such ADU may be offered for resale to members of the general public, at fair market value, provided that the difference between the actual resale price and the adjusted ADU sale control price shall be divided equally between the seller and the County Housing Trust.
(5) At least forty-five days prior to an ADU being offered to resale after the expiration of the ADU thirty-year control period or the expiration of a Renewable thirty-year control period, but prior to the expiration of the ADU extended control period, such ADU shall first be offered at fair market value exclusively to the Board or its designee. The forty-five-day resale period shall begin upon the Board’s receipt of written notice, sent by registered or certified mail, that an ADU is available for resale. The written notice shall include the address of the ADU as well as its parcel identification number. An additional thirty-days shall be allowed for settlement.
(6) Any amount owed to the County Housing Trust pursuant to sub-sections (a)(1), (a)(2)B. or (a)(4) hereof that remains unpaid after the resale of an ADU shall automatically become a lien on such ADU with priority over any lien recorded after the declaration of ADU covenants on such ADU as provided in sub-section (a)(1)D. hereof, with the exception of the deed(s) of trust that financed the certified owner who is reselling the ADU, up to the amount permitted by sub-section (a)(1)F. hereof. Such lien shall also attach to any proceeds from the resale of such ADU with the same priority as provided herein. Should the proceeds from the resale of the ADU be insufficient to pay the amount owed to the County Housing Trust, the lien for the unpaid balance shall remain on the ADU.
(7) Non-judicial foreclosure sales of ADUs may be conducted at fair market value.
A. Prior to the expiration of the ADU extended control period, the lender, lien holders, or trustee, as applicable, shall provide to the Board or its designee written notice of any delinquency or other event of default under a lien or deed of trust secured by such ADU. For a forty-five day period after receipt of such notice, the Board or its designee shall have the right to cure such default, although the Board shall have no obligation to cure the default.
B. Prior to the expiration of the ADU extended control period, and at least forty-five days prior to an ADU being sold at a non-judicial foreclosure sale, the lender, lien holder, or trustee, as applicable, shall provide to the Board or its designee written notice, including the address and parcel identification number of the ADU, that such ADU will be subject to a non-judicial foreclosure sale. For a forty-five day period after receipt of such notice, such ADU may first be offered by the ADU owner at fair market value exclusively to the Board or its designee, with additional thirty-days allowed for settlement. The Board or its designee may bid on the ADU at any non-judicial foreclosure sale.
C. The trustee foreclosing an ADU may use the proceeds from the non-judicial foreclosure sale of such ADU to pay the costs/expenses of such foreclosure and to satisfy those deed(s) of trust that encumber the ADU up to the amount permitted by sub-section (a)(1)F. hereof, even if such deed(s) of trust were recorded after the ADU covenants. Thereafter, out of the surplus funds, an amount equal to half of the difference between the actual non-judicial foreclosure sale price of the ADU and the ADU sale control price adjusted as provided in sub-section (a)(3) hereof as of the date of the non-judicial foreclosure sale shall be paid by the foreclosing trustee to the County Hosing Trust. Any amount owed to the County Housing Trust that remains unpaid shall automatically become a lien on the ADU, which shall attach to the surplus funds from the non-judicial foreclosure sale of such ADU, with priority over any lien recorded after the declaration of ADU covenants on such ADU as provided in sub-section (a)(1)D. hereof. Should the surplus funds be insufficient to pay to the County Housing Trust such amount, the trustee shall pay the entirety of the surplus funds to the County Housing Trust, and no lien shall remain on the ADU for the balance.
D. Upon the non-judicial foreclosure sale of an ADU, all restrictions imposed by the ADU covenants and this chapter will automatically and permanently terminate with respect to the foreclosed ADU.
(8) Any lender, lien holder, or trustee, as applicable, shall provide to the Board or its designee, written notice of any delinquency or other event of default under a mortgage, lien, deed or trust or any other financing instrument secured by a project or development containing ADUs. For a forty-five day period after receipt of such notice, the Board or its designee, shall have the right to cure such a default, although the Board shall have no obligation to cure the default.
(b) Subsequent rental of ADUs.
(1) The ADU rental control price for subsequent rentals shall be controlled for a period of thirty years after execution of the initial lease agreement for the respective rental ADU (“Thirty-Year Control Period”). Prior to approval of a record plat for single family detached or single family attached dwelling lots containing rental ADUs or site plans for single family attached, multifamily attached or multifamily stacked buildings containing rental ADUs, the owner shall record a declaration of ADU covenants (“Rental ADU Covenents”), running with the land in favor of the County.
A. Within the thirty-year control period, no ADU shall be rented except in compliance with all requirements of this chapter and the County Zoning Ordinance, including that no ADU may be rented for an amount that exceeds the limits set by the ADUAB pursuant to section 1450.07 (“ADU Rental Control Price”).
B. Within the thirty-year control period, each time an ADU is offered for rent, it must be offered exclusively through the County to certified tenants.
C. The rental ADU covenants shall provide that within the thirty-year control period, the rental ADU shall be subject to the provisions of this chapter and the County Zoning Ordinance.
D. The rental ADU covenants shall be senior to all covenants, liens, mortgages, deeds of trust or other financing instruments secured by such ADU that may be recorded after the rental ADU covenants and shall be binding upon all assignees, lien holders, trustees, mortgagees, purchasers and other successors in interest.
E. Within the thirty-year control period, the substitution of ADUs with comparable units within the same development may be permitted by written agreement between the landlord and the Board or its designee, at the sole discretion of the Board, provided that at all times the number of dwelling units of each bedroom size and comparable square footage administered and maintained as rental ADUs within the project or development is not less than the number of rental ADUs of each bedroom size and comparable square footage required by the County Zoning Ordinance or the proffers, as applicable, for such project or development.
(2) Any rentals during the thirty-year control period shall not exceed the ADU rental control price.
(3) Within the thirty-year control period, any lender, lien holder, or trustee, as applicable, shall provide to the Board or its designee, written notice of any delinquency or other event of default under a mortgage, lien, deed of trust or any other financing instrument secured by a project or a development containing rental ADUs. For a forty-five day period after receipt of such notice, the Board or its designee, shall have the right to cure such a default, although the Board shall have no obligation to cure the default.
(4) Within the thirty-year control period, and at least forty-five days prior to a project or a development containing rental ADUs being offered for sale at a judicial sale or a non-judicial foreclosure sale, such project or development shall first be offered exclusively to the Board or its designee. The forty-five-day period shall begin upon the Board’s receipt of written notice sent by registered or certified mail that such project or development will be sold or foreclosed. The written notice shall include the name and address of the project and development and the parcel identification number(s).
(5) Within the thirty-year control period, the sale or judicial sale of a project or development containing rental ADUs does not terminate the restrictions on such project or development imposed by this chapter, the County Zoning Ordinance or the respective rental ADU covenants, which shall apply to such project or development for the thirty-year control period. Upon the non-judicial foreclosure sale of a project or development containing rental ADUs, all restrictions imposed by the ADU covenants and this chapter will automatically and permanently terminate with respect to the foreclosed project or development.
(Ord. 24-09. Passed 9-1-24.)
(a) Before an individual may purchase an ADU, he or she must obtain a certificate of qualification as a certified purchaser from the Department. Before issuing a certificate of qualification, the Department shall determine that the applicant meets the annual income eligibility criteria established in Chapter 9 of the Zoning Ordinance.
(1) Notwithstanding criminal violations prescribed in Section 10.13, Chapter 10, of the County Zoning Ordinance, it shall be a civil violation subject to a civil penalty in the amount of $100 per day for an owner of an ADU to sell such ADU to a person who is not a certified purchaser, unless authorized by this chapter.
(2) Notwithstanding criminal violations prescribed in Section 10.13, Chapter 10, of the County Zoning Ordinance, it shall be a civil violation subject to a civil penalty in the amount of $100 per day per ADU for the owner of a rental ADU or the owner of a project or development containing rental ADUs to rent, continue to rent, or permit others to rent such an ADU to a person who has not presented to such owner the certificate of qualification as a certified tenant, unless authorized by this chapter.
(b) Before an individual may lease a rental ADU, he or she must obtain a certificate of qualification as a certified tenant from the Department. Before issuing a certificate of qualification, the Department shall determine that the applicant meets the income eligibility criteria established by Chapter 9 of the Zoning Ordinance. The owner/landlord shall provide annual verification to the Department that each certified tenant meets and continues to meet the income eligibility criteria.
(1) In the event a certified tenant of a rental ADU no longer meets the income eligibility criteria established by Chapter 9 of the County Zoning Ordinance as a result of increased income or any other factor, then such tenant must vacate the ADU at the lease term, unless a substitute ADU has been approved by the Department pursuant to section 1450.08(b)(1)E. If a comparable unit has been authorized by the Department pursuant to section 1450.08(b)(1)E., such tenant may continue to rent such unit at market rent rate.
(2) In the event the tenant of a rental ADU fails to provide certifications as required in this chapter, or falsely swears, executes or provides a certification required by this chapter knowing the statements contained therein to be false, then the lease shall automatically terminate and become null and void, and the tenant and occupant must vacate the ADU within thirty days of written notice to terminate from the owner/landlord. Notwithstanding, if a comparable unit has been authorized by the Department pursuant to section 1450.08(b)(1)E., such tenant may continue to rent the unit at market rent rate.
(c) Except in cases where an owner or certified tenant of an ADU is transferred because of U.S. military or Foreign Service temporary tours of duty, hardship tours, or in time of war, owners or certified tenants of ADUs must occupy the units as their primary domicile. Owners of ADUs must provide an annually executed affidavit certifying their continuing occupancy of the units. Owners of ADUs shall forward such affidavits to the Department on or before June 1 of each year that they own the unit. Owners of ADUs who do not occupy such ADUs as their primary domicile shall be subject to injunction or other suit, action or proceeding to require such owner to either sell the unit to someone who meets the eligibility requirements established pursuant to this chapter or to occupy such ADU as his/her primary domicile.
(1) Notwithstanding criminal violations prescribed in Section 10.13, Chapter 10, of the County Zoning Ordinance, it shall be a civil violation subject to a civil penalty in the amount of $100 per day for an owner of a not-for-rental ADU not to occupy the ADU as his/her primary domicile or to rent, continue to rent, permit others to rent or permit others to occupy such ADU after such owner does not occupy the ADU as his/her primary domicile.
(d) The civil penalties prescribed in this section shall become a lien upon the ADU; shall accumulate interest at the judgment rate of interest; and shall be enforced by the County Zoning Administrator in accordance with Chapter 9, and Section 10.13, Chapter 10, of the County Zoning Ordinance.
(Ord. 99-07. Passed 6-16-99; Ord. 19-13. Passed 7-10-19; Ord. 24-09. Passed 9-11-24.)
(a) The ADUAB shall consist of nine members appointed by the Board. Members shall be qualified as follows:
(1) Two members shall be either civil engineers and/or land surveyors and/or architects, each of whom shall be registered or certified with the relevant agency of the Commonwealth, or planners, all of whom shall have extensive experience in practice in the County.
(2) One member shall be a representative of a lending institution which finances residential development in the County.
(3) Four members shall consist of:
A. A representative from the Board;
B. A residential builder or developer with extensive experience in producing single-family detached and attached dwelling units;
C. A residential builder or developer with extensive experience in producing multifamily dwelling units;
D. A representative from the County Department of Planning and Zoning or any such successor department.
(4) One member shall be a representative of a qualified nonprofit housing group which provides services in the County, if one exists.
(5) One member shall be a real estate agent.
(6) One member shall be a program participant.
(7) One member shall be a member of the public at-large who does not qualify to fill one of the membership positions contained in paragraphs (a)(1) to (4) hereof.
(8) Of the above described membership, at least five members shall be residents of the County and at least four members shall be employed in the private sector.
(b) Each member of the ADUAB shall be appointed to serve for a four-year term. Terms shall be staggered such that the initially constituted ADUAB shall consist of three members appointed to four-year terms, three members appointed to three-year terms and three members appointed to two-year terms.
(c) The ADUAB shall elect its Chairperson and Vice Chairperson for a term of one year. The Board may adopt rules and procedures for the formulation of a recommendation regarding the amounts and terms of ADU sale control price, adjusted ADU sale control price and ADU rental control price, the procedures to be followed by an applicant seeking a modification of the requirements of the ADU Program, the criteria for qualifying a nonprofit, guidelines for establishing cash equivalent contributions for modifications of the ADU Program, and fees to be included in the ADU sales control prices for developer costs to conduct a lottery and to identify potential purchasers of ADUs.
(d) The ADUAB shall establish the amount and terms of all ADU sale control price and ADU rental control prices. The ADUAB may appoint a subcommittee of local builders and construction experts to assist it in recommending the costs of the prototypical single-family detached, single-family attached, multifamily stacked, and multifamily attached ADUs.
(e) The ADUAB shall be authorized to hear and make recommendations to the Board on requests for modifications of the requirements of the ADU Program, as set forth in Chapter 9 of the Loudoun County Zoning Ordinance. The ADUAB shall not have the authority to hear requests for modifications of ADU sales or rental prices, or unit specifications established by the County.
(f) Any recommendation by the ADUAB shall require the affirmative vote of a majority of those members present. A quorum must be present in order for the ADUAB to make a recommendation. A quorum shall consist of no less than five members.
(Ord. 99-07. Passed 6-16-99; Ord. 19-13. Passed 7-10-19; Ord. 24-09. Passed 9-11-24.)