Jul 01, 2010
New real estate laws effective today
01 Jul 2010
Posted by VAR
Hundreds of new Virginia laws go into effect today. Here are the ones Realtors® need to know about (visit www.VARealtor.com/NewLaws for more resources, including a PDF-format version of this content and a Power Point presentation to show to agents):
- New disclosure statement: Wastewater systems. Starting July 1, the Residential Property Disclosure Statement will be amended to state that ‘the seller makes no representations with respect to the presence of any wastewater system located on the property,’ and advises the purchasers to exercise whatever due diligence they deem necessary to determine the presence of any wastewater system. The Virginia Real Estate Board is expected to release a new residential property disclosure form to fulfill the requirements of this new law.*The new disclosure statement is now available. VAR has also amended the SUM1 Form (Summary of Rights and Obligations of Sellers and Purchasers Under the Virginia Residential Property Disclosure Act) to conform to changes in the Residential Property Disclosure Statement. An updated copy of both forms is now available through the VAR Forms Center.
- Rules for sign placement are standardized statewide. Under laws already in effect, localities may choose to adopt sign ordinances, but they’re subject to limitations under state law. Ordinances can prohibit signs from being placed in medians or from being affixed in any way to light posts, trees, stop signs, or utility poles. Signs are permitted on the shoulder of the road if they are political signs, advertise a specific event (such as an open house), or are placed for no more than three days.Changes to the law effective July 1 provide that localities may still use volunteers to enforce these regulations, but those volunteers are acting as agents of the local governments and must follow the law or they may be held personally liable for damage to signs. Furthermore, businesses (e.g., Realtors®) must have the opportunity to collect any confiscated signs from the local government within five business days of confiscation.
This legislation also clarifies that installing a sign in the ground by hand or foot, without the use of tools or equipment, does not require a call to Miss Utility. It codifies into the law an interpretation made by the State Corporation Commission in November 2009. It’s a major win for Realtors® — one that we expect will save you loads of time.
- New requirements for license by reciprocity. All out-of-state applicants for license by reciprocity will be required to have completed education comparable to that required of Virginia licensees and to pass the Virginia exam.
- Brokers who do the right thing won’t be punished (amnesty for honesty). A real estate broker who discovers, either through a self-audit or through a third party retained by the broker, that the firm or a member of the firm has violated a law or regulation will no longer be penalized if the broker satisfies certain requirements:The broker must notify VREB within 30 days of the discovery of any noncompliance, and he must submit a written plan explaining how the issue will be fixed. This may include entry into a voluntary compliance program.
Any voluntary compliance or other remediation must be completed not more than 90 days after the date the plan is submitted to the VREB, and must be certified by the broker or a third party in order to create immunity from enforcement.
*Note that bill does not protect the broker if the noncompliance was intentional or the result of gross negligence.*
- Landlord and tenant laws changed. A number of changes were made to landlord and tenant laws this year. Some key revisions:For leases governed by the Virginia Residential Landlord Tenant Act:
http://varealtor.com/sites/all/themes/zen/images/quote.png); background-attachment: initial; background-origin: initial; background-clip: initial; background-color: transparent; background-position: initial initial; background-repeat: no-repeat no-repeat;”>
- Landlords are now allowed to provide information about tenants to a commissioner of the revenue and, in the case of a military tenant, to his commanding officer.
- A landlord may withhold a reasonable portion of the security deposit to satisfy unpaid water and sewer bills.
- Interest rates on security deposits are updated for 2010.
- Utility charges are treated as rent.
- The definitions of “commencement date” and “effective date” of leases are added to the Act.
- Several other things were clarified as to landlord-tenant law generally:
- the bifurcated rent and possession practice in some courts
- what property managers and Realtors® can do in court without a lawyer
- that interest runs on all judgment amounts
- Vested rights are better protected. If a local government issues a permit (other than a building permit) for a property improvement, it can’t change its mind and later declare those improvements to be illegal (although it can find them to be nonconforming).The law also clarifies that a property owner may replace an on-site sewage system for an existing building in the same general location, even if a new sewage system would no longer be permitted in that location. However, if access to a sanitary sewer system is available the property owner must connect to it.
- Exchange Facilitators Act. This new act establishes requirements for the activities of exchange facilitators who, for a fee, enter into an agreement with a taxpayer to act as (1) a qualified intermediary in an exchange of like-kind property, (2) an Exchange Accommodation Titleholder, or (3) a qualified trustee or escrow holder.
- Real estate appraisal management companies will be subject to new statutory requirements. Among the new law’s provisions, AMCs and their employees are prohibited from influencing (or attempting to influence) any aspect of an appraisal through coercion, extortion, collusion, compensation, inducement, bribery, or any other means. And AMCs can’t stop an appraiser from disclosing, in the appraisal report, the actual fees charged. VAR sought these changes in response to members’ concerns about business practices arising out of the Home Valuation Code of Conduct.
- POAs must collect disclosure-packet fees. Property owners associations that are not professionally managed must collect any fees for providing the disclosure packet at the time of delivery. If the fees aren’t paid, they will be assessed against the lot and are collectible as any other assessment.
- Licensed loan originators must register. Mortgage lenders and mortgage brokers licensed as such in Virginia must now register with the Nationwide Mortgage Licensing System and Registry.
- New rules regarding escrowed deposits: interpleader and foreclosure. Effective July 1:
- A real estate licensee holding escrow funds for a homeowner whose property is foreclosed upon may now file an interpleader action in court, allowing the court to take custody of the funds.
- If a purchase contract is in effect at the time of foreclosure, and the contract provides that an escrowed earnest money deposit will be paid to a party on termination, foreclosure will now be considered as termination of the contract. The escrow agent may then disburse the deposit in accordance with the terms of the contract without consent from or notice to the parties.
- If a rental property occupied by a tenant is foreclosed upon, the landlord must transfer any security deposit to the new owner of the property, and the new owner, on termination of the lease, must return any security deposit and any interest owed to the tenant in accordance with the provisions of the lease. Interpleader actions limited to disposition of an earnest money deposit may be brought in district court even in cases where the amount of the deposit exceeds the ordinary jurisdictional limits of district court cases.