Emergency Legislation Passed in Response to the Virginia Supreme Court’s Decision in The Game Place

On February 13, 2019, Governor Northam signed into law legislation that eliminates the potential adverse consequences of the Virginia Supreme Court’s 2018 decision in The Game Place, L.L.C. v. Fredericksburg 35, LLC and that should have landlords and tenants breathing a sigh of relief. In that case, the Court held that a lease for a term longer than 5 years must be sealed or in the form of a deed in order to comply with Virginia’s Statute of Conveyances (Virginia Code § 55-2). A lease that did not comply with that statue could be repudiated by either the landlord or tenant, regardless of how long the parties had operated under the mistaken belief that their written lease was valid, creating an implied tenancy based on the manner in which rent was received (usually a month-to-month tenancy). The Court’s decision sent landlords and tenants scrambling to review their leases to determine whether they complied with the Statute of Conveyances. In many cases, they did not and parties began negotiating lease amendments to resolve the issue.

Legislation was introduced this year to address the consequences of The Game Place decision. The new law amends several provisions of the Virginia Code, including the Statute of Conveyances, and eliminates the need for a lease for more than 5 years to be sealed or in the form of a deed. The law applies not only to new leases, but also to existing leases that had not been repudiated by either party. If an existing noncompliant lease had not yet been repudiated by either the landlord or tenant, they have likely lost their ability to do so under the new law. Because of the number of leases potentially affected by the Court’s decision, the General Assembly concluded that an emergency existed and made the law effective immediately upon the Governor’s signature.

If you have any questions regarding the legislation and its impact on a specific lease, please contact Matt Westover at (703) 680-4664.

The full text of House Bill 2287 can be found here.

Antonia E. Miller Named Shareholder

Antonia Miller

ARLINGTON, VA — Walsh, Colucci, Lubeley & Walsh is pleased to announce that Antonia E. Miller has been named a Shareholder of the firm.

Antonia joined Walsh, Colucci, Lubeley & Walsh after graduating from William & Mary Law School in 2011, and works primarily in the firm’s Real Estate Transactions and Commercial Business Transactions practice groups. Antonia is experienced in preparing and negotiating contracts, leases, and complicated development agreements. She also works with clients to establish and draft entity documents for all types of business entities, and advises and assists her clients with respect to all aspects of real estate closings and commercial loan closings. Antonia is a graduate of the Leadership Arlington Young Professionals Program and also devotes her time as a Power Lunch Reading Mentor for the non-profit organization, Everybody Wins! DC (EW!DC) and as a Volunteer Court Appointed Special Advocate for the Alexandria/Arlington CASA Program.

“Antonia is an outstanding attorney. She has earned her position as Shareholder by demonstrating expertise in the Real Estate Transactions Practice, by providing outstanding service to her clients, and through her commitment to the community,” said Tom Colucci, Shareholder, “we are fortunate and proud to have Antonia as a Shareholder of the firm.”

Six Land Lawyers Selected as 2015 Virginia Super Lawyers and Rising Stars

Arlington, VA—Walsh, Colucci, Lubeley & Walsh, P.C., is proud to announce six of its attorneys were recently recognized in the 2015 Virginia Super Lawyers and 2015 Virginia Rising Stars lists.

The firm’s Super Lawyers are:
Art Walsh: Land Use/Zoning
Thomas Colucci: Land Use/Zoning
John Foote: Land Use/Zoning

Our Rising Stars are:
Andrew Painter: Land Use/Zoning
Michael Coughlin: Eminent Domain
Michael Kalish: Business Litigation

All six attorneys have been on the Super Lawyers list for the past 10 years. Super Lawyers selects outstanding lawyers from a variety of practice areas based on exceptional peer review and professional accomplishment. Super Lawyers Magazine is available in every state and Washington, D.C., reaching approximately 13 million readers.

 

FBI and U.S. Attorney’s Office Send Clear Message to Contractors

Blind Justice

On December 15, 2014, the Federal Bureau of Investigation and the United States Attorney’s Office issued a press release announcing an agreement between the United States and Forrester Construction Company whereby Forrester admitted to certain abuses of the District of Columbia’s Certified Business Enterprise Program and the U.S. Small Business Administration’s 8(a) Business Development Program. As part of this Non-Prosecution Agreement, Forrester agreed to pay a $2.15 million fine to the United States, to take other administrative actions, to make internal company changes, and to take further steps to raise awareness regarding proper participation in these programs. Publication of this Non-Prosecution Agreement came 18 months after it was reported by local media that Forrester had settled similar claims with the Attorney General of the District of Columbia for $1 million.

This release should serve as a warning to all developers and contractors who participate in public construction projects, which typically offer incentives or include requirements for using firms who qualify under various small or disadvantaged business owner programs, such as the Certified Business Enterprise Program or the SBA’s 8(a) program. In addition to possible contractual and procurement code violations, a failure to comply with representations made in order to obtain awards of government bids could lead to criminal prosecution.

Pursuant to the FBI and USAO’s press release and the Non-Prosecution Agreement (which was made available by the U.S. Department of Justice), the contractor in this case acknowledged entering into various joint venture agreements with qualifying Certified Business Enterprise partners and representing to the District of Columbia that each CBE partner was the majority member of the venture and would control day-to-day operations under the contract. Subsequent to receipt of the award, the penalized contractor and the CBE member modified the terms of the joint venture arrangements such that the CBE member was given less control and interest, contrary to the requirements of the contract and the submitted bid.

The lesson all contractors participating in government contracts should take away here is that local and federal government entities are on the look-out for possible violations of disadvantaged business owner program requirements and contractual provisions. While the facts of this case indicate deliberateness on behalf of the penalized contractor to skirt these provisions, contractors who obtain public project bids by certifying the use of disadvantaged businesses must make meaningful efforts to comply with their contractual requirements or risk not only contractual penalties, but criminal penalties as well.

Design Professionals Can Now Limit their Liability Through Contract

These provisions typically limit a party’s liability to the amount of the contract or some predetermined amount. Historically, such provisions have been generally enforceable in Virginia for everyone except design professionals — that is, engineers, architects, and/or surveyors.

Until recently, provisions limiting the liability of design professionals were often held unenforceable, because Virginia law prohibited firms engaged in the business of professional engineering, architecture, and land surveying from “limit[ing] the liability of any licensee or certificate holder for damages” arising from its actions. However, a recent amendment to the Virginia Code not only eliminated the above-referenced language but added language providing that design professionals shall NOT be prohibited from “limiting liability through contract.” We note that this amendment is not retroactive, however.

While the amendment allows limits on the liability of design professionals, another Virginia Code section prohibits certain indemnification and hold harmless provisions that are designed to completely insulate a party from liability, rather than limit their liability. This rarely used code section invalidates certain contract provisions commonly used by owners or general contractors when they attempt to impose “indemnity or hold harmless” obligations on their architect or engineer. The bottom line is that consulting professionals may be agreeing to contract indemnity provisions that are actually unenforceable.

These laws will provide ammunition for consultants to better protect themselves through their contracts. Design professionals are encouraged to take advantage of these changes and have their standard contracts reviewed and revised. Please feel free to contact Garth Wainman or Matt Westover to discuss any questions you may have regarding these statutes.

Loudoun County Trends

Bisnow, the nation’s largest commercial real estate events producer, hosted the second-annual “Loudoun County State of the Market” symposium on November 28, 2012 at the National Conference Center in Leesburg. The event, which included a “mixed use” panel moderated by Walsh Colucci associate attorney Andrew A. Painter, focused on the future of the commercial real estate industry in Loudoun County. The event featured a keynote address by Loudoun Hounds CEO Bob Farren, who discussed details for his plans to construct a minor league ballpark in the “One Loudoun” project.

The mixed use panel discussed the next stages of development in Loudoun County and the county’s housing, office, retail, and data center markets. The panel included Bill May of Miller and Smith, Buchanan Partners’ Bob Buchanan, John Beatty of Beatty Development, and Buddy Rizer of the Loudoun County Department of Economic Development.

What is important to know in Loudoun County? What is coming? Developers need to be aware of Loudoun County’s “Transition Policy Area,” and the potential for development around the county’s future Metrorail stations. Other important issues include the funding of surface transportation infrastructure, and the existing political climate of Loudoun County. If you want to discuss such matters in more detail, please contact Andrew Painter in our Leesburg office at apainter@ldn.thelandlawyers.com.

Condominium and Homeowner Association Development Update

The Virginia General Assembly has enacted new laws which require all associations (Homeowner Associations and Condominium Associations) to adopt complaint resolution procedures, and cost recovery policies. These laws are currently in effect, and though the main impact is on existing communities, developers need to make certain that their management companies have the necessary policies and procedures in place for all new developments.

Section 55-530 of the Code of Virginia requires all associations to establish procedures for the resolution of written complaints from the association members and other citizens. The Virginia Department of Professional Occupational Regulation, and the Common Interest Community Ombudsman Regulations, require all associations to publish their complaint procedures.

A second requirement states that each association must adopt a “Cost Schedule” in order to charge its members the actual cost for reviewing and copying the records of the association.

Under the new statutory provisions, in order to recover costs, associations must have a policy in place that sets forth the Cost Schedule for the labor and material charges for the requested documents. This Cost Schedule should reflect charges that are reasonable, and costs may not exceed the actual cost incurred by an association.

Our firm can provide assistance with getting these procedures adopted and in place. Please contact Bill Fogarty or Mike Kieffer for additional information.