Wednesday, May 13, 2020

2020 Virginia General Assembly Legislative Updates: Real Estate Law

Each year at the close of the Virginia General Assembly session, our attorneys provide summaries of new legislation that might impact the local practice of law. Below transactions attorney Jack Morgan summarizes real estate legislation updates.

Real Estate Law Update

By Jack Morgan

HB 99 Va. Fair Housing Law; status as a victim of family abuse, etc.

Landlord and tenant; victims of family abuse; evidence to mitigate low credit score; damages. Allows an applicant for a lease to recover actual damages, including all amounts paid to the landlord as an application fee, application deposit, or reimbursement for any of the landlord’s out-of-pocket expenses that were charged to the applicant, along with attorney fees, if the landlord does not consider evidence of the applicant’s status as a victim of family abuse to mitigate any adverse effect of the otherwise qualified applicant’s low credit score.

HB 174 Va. Residential Property Disclosure Act; required disclosures for buyer to beware, marine clays.

Virginia Residential Property Disclosure Act; required disclosures for buyer to beware; marine clays. Provides that the owner of residential property makes no representations with respect to whether the property is located on or near deposits of marine clays (marumsco soils). The bill also advises purchasers to exercise whatever due diligence is deemed necessary in accordance with terms and conditions as may be contained in the real estate purchase contract, including consulting public resources regarding local soil conditions and having the soil and structural conditions of the property analyzed by a qualified professional.

HB 175 Virginia Residential Property Disclosure Act; required disclosures, radon gas.

Virginia Residential Property Disclosure Act; disclosures for a buyer to beware; radon gas. Adds to the disclosure statement required to be furnished to the buyer by the owner of residential real property that the buyer beware and exercise necessary due diligence with respect to whether the property is located in a locality classified as Zone 1 or Zone 2 by the U.S. Environmental Protection Agency’s Map of Radon Zones.

HB 176 Property Owners’ Association Act and Virginia Condominium Act; contract disclosure statement.

Property Owners’ Association Act and Virginia Condominium Act; contract disclosure statement; extension of right of cancellation. Provides for a limited extension of the right of cancellation where such extension is provided for in a ratified real estate contract, defined in the bill. This bill is identical to SB 672.

HB 334 Manufactured home parks; sale of park to developer, relocation expenses.

Manufactured Home Lot Rental Act; relocation expenses. Provides that if the termination of a manufactured home park rental agreement is due to the sale of the manufactured home park to a buyer that is going to redevelop the park and change its use, the landlord shall provide certain relocation expenses to each manufactured home owner in the park within the 180-day notice period for the purpose of removing the manufactured home from the park.

HB 393 Landlord and tenant; statement of tenant rights and responsibilities.

Landlord and tenant; tenant rights and responsibilities. Requires the Director of the Department of Housing and Community Development to develop a statement of tenant rights and responsibilities explaining in plain language the rights and responsibilities of tenants under the Virginia Residential Landlord and Tenant Act (§ 55.1-1200 et seq.) and maintain such statement on the Department’s website along with a form to be signed by the parties to a rental agreement. The bill requires that the statement be provided to any prospective tenant and that the form developed by the Department be signed by the parties to the rental agreement. The bill prohibits a landlord from filing or maintaining an action against a tenant in a court of law for any alleged lease violation until he has provided the tenant with the statement of tenant rights and responsibilities. This bill is identical to SB 707.

HB 518 Virginia Residential Property Disclosure Act; residential building energy analysis.

Virginia Residential Property Disclosure Act; disclosures for a buyer to beware; residential building energy analyst. Adds obtaining a residential building energy analysis to the disclosure statement furnished to the buyer by the owner of residential real property that the buyer beware and exercise necessary due diligence with respect to determining the condition of real property or any improvements thereon. This bill is a recommendation of the Virginia Housing Commission. The bill incorporates HB 574 and is identical to SB 628.

HB 519 Virginia Residential Landlord and Tenant Act; certain notices of termination.

Virginia Residential Landlord and Tenant Act; notice of termination to contain legal aid information. Provides that no notice of termination of tenancy served upon a tenant receiving tenant-based rental assistance through (i) the Housing Choice Voucher Program, 42 U.S.C. § 1437f(o), or (ii) any other federal, state, or local program by a private landlord is effective unless it contains on its first page, in type no smaller or less legible than that otherwise used in the body of the notice, the statewide legal aid telephone number and website address. This bill is identical to SB 115.

HB 594 Virginia Residential Landlord and Tenant Act; security deposits, timing of application.

Virginia Residential Landlord and Tenant Act; return of security deposit. Requires the landlord to return the tenant’s security deposit, minus any deductions or charges, within 45 days of the termination of the tenancy or the date the tenant vacates the dwelling unit, whichever occurs last. Under current law, the 45-day period to return the security deposit begins on the date of the termination of the tenancy. This bill is identical to SB 388.

HB 720 Property Owners’ Association Act; display of political signs.

Property Owners’ Association Act; notice on restrictions on display of political signs. Requires the association disclosure packet to contain a statement of any restrictions on the size, place, duration, and manner of placement or display of political signs by a lot owner on his lot.

HB 788 Restrictive covenants; deeds of reformation.

Restrictive covenants; certificate of release of certain prohibited covenants. Prohibits a deed containing a restrictive covenant from being recorded on or after July 1, 2020, and provides the form for a Certificate of Release of Certain Prohibited Covenants to be recorded to remove any such restrictive covenant.

HB 819 Real estate settlements; kickbacks and other payments, remedies, penalties.

Real estate settlements; kickbacks and other payments; remedies; civil penalties. Relocates from Chapter 9 (Real Estate Settlements) to Chapter 10 (Real Estate Settlement Agents) within Title 55.1 the existing provision that prohibits persons from paying or receiving a kickback, rebate, commission, thing of value, or other payment pursuant to an agreement to refer business incident to a settlement. This relocation authorizes the State Corporation Commission to impose penalties, issue injunctions, and require restitution in cases where a person who does not hold a license from the appropriate licensing authority has violated the provision. The measure also adds to Chapter 10 of Title 55.1 provisions that (i) authorize a court to assess civil penalties of not more than $5,000 per violation of the chapter and (ii) authorize the recovery of costs and reasonable expenses and attorney fees.

HB 831 Utility easements; location of broadband and other communications facilities.

Utility easements; location of broadband and other communications facilities. Declares that it is the policy of the Commonwealth that (i) easements for the location and use of electric and communications facilities may be used to provide or expand broadband or other communications services; (ii) the use of easements to provide or expand broadband or other communications services is in the public interest; (iii) the installation, replacement, or use of public utility conduit, including the costs of installation, replacement, or use of conduit of a sufficient size to accommodate the installation of infrastructure to provide or expand broadband or other communications services, is in the public interest; (iv) the use of easements to provide or expand broadband or other communications services (a) does not constitute a change in the physical use of the easement; (b) does not interfere with, impair, or take any vested or other rights of the owner or occupant of the servient estate; (c) does not place any additional burden on the servient estate other than a de minimis burden, if any; and (d) has value to the owner or occupant of the servient estate greater that any de minimum impact; and (v) the installation and operation of broadband or other communications services within easements, appurtenant or gross, are merely changes in the manner, purpose, or degree of the granted use as appropriate to accommodate a new technology. The measure further provides that (1) absent any express prohibition on the installation and operation of broadband or other communications services in an easement that is contained in a deed or other instrument by which the easement was granted, the installation and operation of broadband or other communications services within any easement shall be deemed, as a matter of law, to be a permitted use within the scope of every easement for the location and use of electric and communications facilities and (2) subject to compliance with any express prohibitions in a written easement, any incumbent utility or communications provider may use an easement to install, construct, provide, maintain, modify, lease, operate, repair, replace, or remove its communications equipment, system, or facilities, and provide communications services through the same, without such incumbent utility or communications provider paying additional compensation to the owner or occupant of the servient estate or to the incumbent utility, provided that no additional utility poles are installed. The measure provides that any incumbent utility or communications provider may use a prescriptive easement to install, construct, provide, maintain, modify, lease, operate, repair, replace, or remove its communications equipment, system, or facilities, and provide communications services through the same, without such incumbent utility or communications provider paying additional compensation to the owner or occupant of the servient estate or to the incumbent utility, provided that no additional utility poles are installed. This bill is identical to SB 794.

HB 838 Virginia Residential Property Disclosure Act; Real Estate Board’s disclosure statement.

Virginia Residential Property Disclosure Act; Real Estate Board; disclosure statement. Requires the residential property disclosure statement form developed by the Real Estate Board and maintained on its website to include a statement signed by the parties acknowledging that the purchaser has been advised of the disclosures listed on the residential property disclosure statement. Currently, such form only requires an acknowledgment that the purchaser has been advised to review the residential property disclosure statement.

HB 859 Stormwater management facilities; private residential lots, required disclosure.

Stormwater management facilities; private residential lots; disclosure. Directs the State Water Control Board to adopt regulations requiring the owner of residential property on which is located a privately owned stormwater management facility serving one or more residential properties to record the long-term maintenance and inspection requirements for such stormwater management facility with the deed for the owner’s property. The bill requires an owner of residential real property who has actual knowledge of a privately owned stormwater management facility located on the property to disclose to a purchaser of the property the long-term maintenance and inspection requirements of the facility.

HB 1161 Virginia Residential Property Disclosure Act; required disclosures, lead pipe.

Virginia Residential Property Disclosure Act; required disclosures for buyer to beware; lead pipes. Adds to the disclosure statement required to be furnished by the owner of residential real property to a buyer that the buyer beware and exercise necessary due diligence with respect to whether the property contains any pipe, pipe or plumbing fitting, fixture, solder, or flux that does not meet the federal Safe Drinking Water Act definition of “lead free.” The bill also requires any licensee who is engaged by a landlord and who has actual knowledge of the existence of any pipe, pipe or plumbing fitting, fixture, solder, or flux that does not meet the federal Safe Drinking Water Act definition of “lead free” to disclose such information to a prospective tenant.

HB 1249 Manufactured Home Lot Rental Act; manufactured home park, termination due to sale of park, notice.

Manufactured Home Lot Rental Act; manufactured home park; termination due to sale of park; notice. Provides that where the sale of a manufactured home park is due to a change in the use of all or any part of a manufactured home park by the landlord, including conversion to hotel, motel, or other commercial use, planned unit development, rehabilitation, or demolition, a 180-day written notice is required to terminate the rental agreement. The bill also requires a manufactured home park owner who offers or lists the park for sale to a third party to provide written notice to (i) the Department of Housing and Community Development, which shall make the information available on its website within five days of receipt, and (ii) each tenant of the manufactured home park at least 90 days prior to accepting an offer. The bill provides that tenants who have been evicted from a manufactured home park have 90 days after a judgment has been entered in which to rent the manufactured home to a subtenant, contingent on the subtenant’s making a rental application to the manufactured home park owner within such 90-day period and approval by the home park owner of such rental application from the subtenant. This bill incorporates HB 1163 and HB 1229.

HB 1333 Landlord and tenant; damage insurance shall conform to certain criteria.

Landlord and tenant; damage insurance in lieu of security deposit. Provides that a landlord may permit a tenant to provide damage insurance coverage meeting certain criteria in lieu of the payment of a security deposit. The bill also caps the total amount of any combination of security deposit and rental insurance coverage required by the landlord to twice the amount of the periodic rent payment and provides that a tenant who initially opts to provide damage insurance in lieu of a security deposit may, at any time without consent of the landlord, opt to pay the full security deposit to the landlord in lieu of maintaining a damage insurance policy.

HB 1340 Revision of Title 55; technical amendments relating to the revision and recodification.

Revision of Title 55. Makes technical amendments relating to the revision and recodification of Title 55 enacted in the 2019 Session. The bill also implements clarifying changes and other changes made in the revision and recodification. This bill is a recommendation of the Virginia Code Commission

HB 1342 Virginia Residential Property Disclosure Act; required disclosures, lead pipe.

Virginia Residential Property Disclosure Act; required disclosures for buyer to beware; lead pipe; defective drywall. Adds to the disclosure statement required to be furnished to the buyer by the owner of residential real property that the buyer beware and exercise necessary due diligence (i) with respect to whether the property contains any pipe, pipe or plumbing fitting, fixture, solder, or flux that does not meet the federal Safe Drinking Water Act definition of “lead free” and (ii) with respect to the existence of defective drywall on the property.

HB 1401 Landlord and tenant; remedy for unlawful ouster, ex parte issuance of order to recover possession.

Landlord and tenant; remedy for unlawful ouster; ex parte issuance of order to recover possession. Provides that, upon receipt of a petition for an order to recover possession or restore essential services alleging a tenant’s unlawful ouster from the rental premises and a finding that the petitioner has attempted to provide the landlord with actual notice of the hearing on the petition, the judge of the general district court may issue such order ex parte upon a finding of good cause to do so. The bill further provides that an ex parte order shall be a preliminary order that specifies a date for a full hearing on the merits of the petition, to be held within five days of the issuance of the ex parte order.

HB 1548 Common interest communities; termination of condominium, respective interests of unit owners

Common interest communities; Virginia Condominium Act; termination of condominium; respective interests of unit owners. Provides that the respective interests of condominium unit owners upon the termination of a condominium shall be as set forth in the termination agreement, unless the method of determining such respective interests is other than the relative fair market values, in which case the association shall provide each unit owner with a notice stating the result of that method for the unit owner’s unit and, no later than 30 days after transmission of that notice, any unit owner disputing the interest to be distributed to his unit may require that the association obtain an independent appraisal of the condominium units. The bill provides a method of adjusting the respective interests of the unit owners if the amount of such independent appraisal of an objecting unit owner’s unit is at least 10 percent more than the amount stated in the association’s notice.

HB 1569 Dams; disclosure statements.

Virginia Residential Property Disclosure Act; required disclosures for buyer to beware; impounding structures or dams. Directs the Real Estate Board to include in the residential property disclosure statement provided on its website a disclosure relating to the condition or regulatory status of any impounding structure or dam on the owner’s property or under the ownership of a common interest community that the owner of the property is required to join. This bill is identical to SB 343.

SB 233 Insurance agents; licensing and registration renewal

Insurance licensing and registration renewal. Makes changes related to renewal of insurance agents’ licensure and registration. In 2019, legislation was enacted that becomes effective January 1, 2021, to change the licensing and registration renewal cycles for agents, public adjusters, and others to a new cycle based on both month and year, with biennial renewal. The bill removes references in the current law to biennial renewal, removes a requirement in the law as it will become effective that limited lines agents renew their licenses before May 1, 2021, and adds a requirement in the law as it will become effective that certain settlement agents renew their registrations before May 1, 2021.

SB 630 Common interest communities; electric vehicle charging stations permitted.

Common interest communities; electric vehicle charging stations permitted. Prohibits certain common interest community associations from prohibiting the installation of an electric vehicle charging station within the boundaries of a member’s unit or limited common element parking space appurtenant to the unit owned by the unit owner or, in the case of a property owners’ association, a lot owner’s property, and sets forth provisions governing the installation and removal of such charging stations. The bill also requires the association member installing an electric vehicle charging station to indemnify and hold the association harmless from all liability resulting from a claim arising out of the installation, maintenance, operation, or use of such charging station.

SB 905 Landlord and tenant; tenant’s remedy by repair, clarifies definition of “actual costs.”

Landlord and tenant; tenant’s remedy by repair. Permits a tenant, under certain circumstances, to have a condition that constitutes a material noncompliance by the landlord with the rental agreement or with provisions of law, or that if not promptly corrected will constitute a fire hazard or serious threat to the life, health, or safety of occupants of the premises, remedied by a third-party licensed contractor or a licensed pesticide business. The bill provides that, unless the tenant has been reimbursed by the landlord, the tenant may deduct from rent the actual costs incurred, not to exceed the greater of one month’s rent or $1,500, after submitting to the landlord an itemized statement accompanied by receipts for purchased items and third-party contractor or pest control services.

SB 948 Real property by state agencies; conveyance and transfers.

Conveyance and transfers of real property by state agencies; Department of Military Affairs; lease of state military reservation property. Provides that, subject to general provisions governing the lease of property owned by the Commonwealth by state agencies, the Department of Military Affairs may convey a leasehold interest in any portion of State Military Reservation property to governmental or private entities when it is deemed to be in the Department’s best interest to (i) provide necessary services such as lodging, training capabilities, or logistical utility services that support the Department’s mission or (ii) maintain a peripheral buffer with compatible uses, including ground parking leases. The term of such lease may not exceed 50 years; however, any agreement may be extended upon the written recommendation of the Governor and the approval of the General Assembly. In the event that the Department enters into a written lease with a private individual, firm, corporation, or other entity, neither the real property that is the subject of the lease nor any improvements or personal property located on the real property that is the subject of the lease shall be subject to taxation by any local government authority, provided that the real property, improvements, or personal property is used for a purpose consistent with or supporting the Department’s mission.

SB 1094 Conservation and Recreation, Department of; authorized to divest itself of certain property.

Property conveyance; Department of Conservation and Recreation; New River Trail State Park. Authorizes the Department of Conservation and Recreation to convey certain property that was previously conveyed to it by Norfolk Southern Railroad for the New River Trail State Park.

HB 535 Real estate with delinquent taxes or liens; sales by nonprofit organizations.

Real estate with delinquent taxes or liens; sales by nonprofit organizations. Provides that a nonprofit organization that acquires real estate with delinquent taxes or liens pursuant to the appointment of a special commissioner may sell to eligible purchasers either (i) both the land and structural improvements on a property or (ii) only the structural improvements of a property, without the land. The bill provides that a sale of only the structural improvements is permissible only if (a) the improvements are subject to a long-term ground lease with a community land trust and (b) the community land trust retains a preemptive option to purchase such improvements at a price determined by a formula that ensures that the improvements remain affordable in perpetuity to low-income and moderate-income families.

HB 537 Real estate tax; exemption for property in redevelopment or conservation areas.

Real estate tax exemption for property in redevelopment or conservation areas or rehabilitation districts. Increases the maximum duration of a local real estate tax exemption for structures in redevelopment or conservation areas or rehabilitation districts from 15 to 30 years. This bill is identical to SB 727.

SB 649 Town taxes; collection by county.

Collection of town taxes by county. Authorizes the board of supervisors of any county that has adopted the urban county executive form of government to enter into agreements with towns located partially or wholly within such county for the collection and enforcement of real or personal property taxes by the county official responsible for assessment or collection of taxes. The authority granted to such counties is similar to authority granted to Loudoun County under existing law. This bill is identical to HB 1534.

SB 763 Local tax; amount of exemption for solar energy equipment.

Local tax exemption; solar energy equipment. Changes the local property tax exemption for solar energy projects from an 80 percent exemption for the life of the project to a step down scale of an 80 percent exemption in the first five years, 70 percent in the second five years, and 60 percent for all remaining years in service. The change applies to solar energy projects that are either (i) projects greater than 20 megawatts and less than 150 megawatts for which an initial interconnection request form has been filed with an electric utility or a regional transmission organization after January 1, 2015, and first in service on or after January 1, 2017, and (ii) projects equaling more than five megawatts and less than 150 megawatts for which an initial interconnection request form has been filed on or after January 1, 2019. The bill provides that if a locality assesses a revenue share on a project, the step down scale shall not apply. The bill extends the sunset date after which new projects may not qualify for the exemption from January 1, 2024, to July 1, 2030, and is identical to HB 1434.