The demand requirement, and the ninety days

Standing is only half of it. Subsection B imposes a condition precedent:

“No member shall commence a derivative proceeding until: 1. A written demand has been made on the corporation to take suitable action; and 2. Ninety days have expired from the date delivery of the written demand was made on the corporation unless (i) the member has earlier been notified that the demand has been rejected by the corporation or (ii) irreparable injury to the corporation would result by waiting for the expiration of the 90-day period.”

Two exits from the ninety days are written into the text. An outright rejection starts the clock running immediately — a board that refuses a demand in week two has handed the member eleven weeks back. And irreparable injury dispenses with the wait entirely.

Subsection C adds a stay power: “If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for such period as the court deems appropriate.” An association that takes a demand seriously and opens a genuine inquiry has a statutory basis to ask for time.

Settlement cannot be done quietly

Section 13.1-852.4 provides that a derivative proceeding “shall not be settled or discontinued without the court's approval.” That matters in the association context more than it does in the ordinary corporate one. A board and a complaining owner who reach a private accommodation — the assessment forgiven, the claim dropped, nobody else told — cannot end a derivative case that way, because the claim belongs to the association and therefore to every other owner in it.

The companion provision: removal by a court

The same chapters add a judicial director-removal provision. A circuit court may remove a director from office, and bar reelection for a period the court sets, where it finds that “(i) the director engaged in fraudulent conduct with respect to the corporation or its members, grossly abused the position of director, or intentionally inflicted harm on the corporation and (ii) considering the director's course of conduct and the inadequacy of other available remedies, removal would be in the best interest of the corporation.”²

A member bringing that proceeding must comply with Article 7.2 — except for the contemporaneous-membership conditions in subdivisions A 1 and A 2. An owner who bought into the community after the conduct occurred is therefore shut out of an ordinary derivative claim about it but not out of a removal proceeding.

Where this fits among the remedies Virginia owners already have

Virginia owners are not without recourse today. The Office of the Common Interest Community Ombudsman takes notices of final adverse decision, and the Common Interest Community Board licenses and disciplines managers. But the Ombudsman's jurisdiction is limited to whether a decision conflicts with the laws and regulations governing common interest communities — not with the association's own governing documents — and it cannot award anything. Article 7.2 is a different instrument entirely: it is a court case, with discovery, about money or conduct.

The conditions that change the answer

It reaches incorporated associations only. Article 7.2 sits in the Nonstock Corporation Act; an unincorporated Virginia association is outside it.

It does not create a new duty. A derivative statute supplies a procedure for enforcing duties that already exist under the declaration, the bylaws and the corporate statute. It does not itself make conduct wrongful.

The written demand is the whole ballgame procedurally. A member who sues without one has not satisfied a condition precedent stated in the text.

What to watch next

Nothing in the article takes effect before January 1, 2027, and there is no Virginia decision construing it yet. The first questions likely to reach a circuit court are what counts as “suitable action” in a demand, and how much inquiry a board must actually commence to earn the subsection C stay.