The skinny on VAR’s agency legislation

If you haven’t read the VAR-sponsored agency bill (HB 1907) that is currently winding its way through the General Assembly sausage-making facility, you probably should. The edits and changes will, in some cases, fundamentally affect how agency is practiced in Virginia and in others, make Realtors’ and real estate licensees’ professional lives a bit more efficient.

While the bill is primarily about clarifications to real estate agency representation laws, it also includes a number of other provisions that just happen to be located in the same Virginia Code section as the agency statute.

Regarding Agency in Virginia:

All brokerage agreements in writing:

This is a simple and straight-forward change that serves to clarify to all parties and educate consumers about what type of professional relationship and agreement to which they are entering. Some of the simple clarifications that should be common sense to most of us:

– specifies a termination date
– states the fees
– “services to be rendered by the licensee”

Enhanced required disclosure verbiage before commencement of disclosed dual STANDARD agency

Single Agent Dual Agency, whereby the same licensee “represents” both sides has long been recognized as being both risky to the agent, risky and potentially damaging to the consumer and is illegal in many states. This section does not make dual agency illegal, but serves to inform the consumer as to the inherent limitations incurred when one chooses to enter a single agent dual agency relationship.

Prior to entering a single agent dual agency relationship, the following enhanced disclosure must be made in writing:

The disclosure shall contain the following provisions:

1. That following the commencement of dual standard agency, the licensee will be unable to advise either party as to the terms, offers or counteroffers; however, under the limited circumstances specified in subsection C, the licensee may have previously discussed such terms with one party prior to the commencement of dual standard agency;

2. That the licensee cannot advise a buyer client as to the suitability of the property, its condition (other than to make any disclosures as required by law of any licensee representing a seller), and cannot advise either party as to repairs of the property to make or request;

3. That the licensee cannot advise either party in any dispute that might later arise relating to the transaction;

4. That the licensee will be acting without knowledge of the client?s needs, client?s experience in the market, or client?s experience in handling real estate transactions unless he has gained that information from earlier contact with the client under the limited circumstances specified in subsection C; and

5. That either party may engage another licensee if he requires additional representation.

Bluntly, in a single agent dual agency situation, an agent cannot give 100% to either party in the transaction. This merely specifies some of the ways that a dual agent is limited.

One of the challenges when crafting this language was, “what about clients whom I have represented for years and want to buy one of my listings?”

Hence, the exemption for “standard agency for existing clients.”

Note that the enhanced disclosures clearly apply ONLY to standard agency in RESIDENTIAL transactions. As we all know, commercial real estate is an entirely different ballgame.

Goodbye, Tracks

At the request of the Real Estate Board, the bill does away with the old track system for post-license (residential track, commercial track, property management track, etc). This system was neither efficiently used or successful in accomplishing what it had been designed to address. To the Board’s and VAR’s credit, they recognized this and have moved to eliminate it.

Pertinent and relevant education for real estate licensees.

Allows the Real Estate Board annually (if it wishes) to readjust the required CE course topics to reflect current market trends, practices, challenges, etc. This is an important change that will hopefully allow the education to be relevant and helpful to our respective practices, rather than serving as a necessary evil that must be endured.

Square footage from public sources:

This alteration relieves a licensee of liability if they provide buyer information that proves to be false but comes from the seller, a government entity (such as tax records, GIS, etc), or other licensed or certified provider of professional services services. This does not relieve the licensee of the obligation to inform customers and clients of the fact that the Commonwealth is a Caveat Emptor state and that they should double-check every piece of information themselves.

Disclosures: Paper & Liability saving measure:

This authorizes the Real Estate Board to create a website containing property disclosures and create a single form for licensees to us to direct buyers to the disclosure site. In short, instead of having to have clients sign new Disclosures each time they are changed (seemingly every six months) licensees will be able to direct buyers to a website.

No more worrying about whether the Dislosure form you had signed is obsolete in August because the new one was was implemented on 1 July. Now, “The Disclosure” will always be current.


All licensees should read this bill and the relevant Code (of Virginia, not Ethics). It matters. The Agency changes are the results of many months of service from our members on committees and countless hours of staff’s tireless efforts. Let’s hope all licensees read, understand and abide by the changes.

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