Real Estate Transactions Archives - Walsh Colucci Lubeley Walsh

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

Posted on March 20, 2019March 25, 2019 by The Land Lawyers

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

Posted on January 1, 2019January 4, 2019 by Brigitte Flores

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.”

Avoiding the Homeowners Association Disclosure Packet Pitfall

Posted on September 15, 2016December 19, 2018 by Erin Thiebert

Source: Roger Snyder

If you are a builder, management company, or HOA in need of updating an incomplete or outdated disclosure packet, The Land Lawyers can help you prepare the proper documentation and avoid any difficulty that might arise prior to a residential closing.

Residential builders and sellers often find themselves scrambling just before a residential real estate closing to provide a complete and current disclosure packet, as required by the Virginia Property Owners’ Association Act. The Act (Virginia Code Title 55, Chapter 26) dictates the contents of this disclosure packet and burdens the seller with the obligation of getting it into the purchaser’s hands for review prior to closing.

The Act provides the purchaser with the right to walk away from an executed contract upon delivery of the seller’s disclosure packet, or if a seller cannot provide it at all. The seller usually asks its HOA’s management company to deliver the packet to the purchaser. The management company is limited by the Act on both the amount it can charge for providing the packet as well as when that payment is due. Tension can arise between the seller and the HOA’s management company if the management company delivers a packet that does not comply with the Act or if the management company attempts to collect fees from the seller prior to settlement. This can place the seller in the awkward position of trying to enforce the Act against the HOA at a critical time in the transaction.

The packet must include key information that the Virginia legislature has determined a prospective purchaser should know before making the leap to home ownership within an HOA. This includes any HOA governing documents that will be binding on the purchaser, such as declarations of covenants, bylaws, architectural guidelines, and resolutions of the HOA’s board. The packet is required to specifically address restrictions on flags, solar collection devices, and signage applicable to the purchaser’s lot. The HOA’s financial information must also be included, such as the purchaser’s annual assessment amounts (including any possible special assessments), the financial statements and budgets of the HOA, current reserve studies, and whether the HOA may be embroiled in a lawsuit. Other information with regard to insurance, HOA approvals of changes to improvements on the purchaser’s lot, and lot violations are also addressed. The HOA is bound by the information in the packet, even if that information is erroneous.

Once delivered, the purchaser has only three days to review the packet and determine if the benefit of owning a home in an HOA, coupled with the amenities provided, exceeds the burden of the financial assessments, rules, and restrictions that are an unavoidable part of membership in an HOA. If the purchaser fails to provide timely notice to the seller that it is terminating the contract, or if the purchaser never receives the packet and then closes on the lot anyway, the purchaser’s right under the Act to walk away from the contract terminates.

HOAs can avoid running afoul of the Act, causing unnecessary stress on potential sellers and the aftermath caused by delivering incorrect information, by ensuring the packet contains all of the required information and is updated regularly to reflect changes in assessment amounts and take into account any new legislation.

For more information about disclosure packets and their fee schedules, or if you need help updating disclosure packets, email or call Erin Thiebert at 703.680.4664. You can also visit the VPOR website to learn more about the Property Owners’ Association Act, and DPOR’s website where you can download the Disclosure Packet Cover Sheet and find additional information about the maximum allowable fees owners can be charged for information they must provide to potential purchasers.

Is Your New Home Contract Implied Warranty Waiver Enforceable?

Posted on August 18, 2015 by Garth Wainman

Source: Wikijazz

Virginia Code §55-70.1 provides new home purchasers with a number of implied warranties. It is common, however, for a new home contract to include a provision waiving those warranties and replacing them with a limited builder warranty. While many homebuilders and their attorneys believe the waiver provision will protect the builder from potential liability, some Virginia court decisions have interpreted Section 55-70.1 in a way that few legislators or real estate attorneys could have imagined. Until the legislation is amended, something our firm will be working on for the next legislative session, we wanted to put our builder clients on notice of the problem.

Virginia Code § 55-70.1 provides that vendors engaged “in the business of building or selling [new] dwellings, shall be held to warrant to the vendee that, at the time of transfer of record title or the vendee’s taking possession, whichever occurs first, the dwelling together with all its fixtures is sufficiently (i) free from structural defects, so as to pass without objection in the trade, (ii) constructed in a workmanlike manner, so as to pass without objection in the trade, and (iii) fit for habitation.” This warranty extends for one year from the date of transfer of record title or the date the vendee takes possession, whichever occurs first, with the exception of the warranty for structural defects in the foundation of new dwellings, which extends for five years from such date.

The same Code section allows the parties to waive the implied warranties by contract. In order to effectively do so, however, the waiver must strictly comply with the statute. First, “the words used to waive, modify or exclude the warranties [must] state with specificity the warranty or warranties that are being waived, modified or excluded.” For example, if the parties intend to waive the implied warranty that the dwelling is “fit for habitation,” the waiver provision must expressly and specifically state that warranty is being waived. A Richmond circuit court has held that a builder’s new home contract language waiving “all of the implied warranties under Virginia Code 55-70.1” did not comply with the statute and was an ineffective waiver.

Second, in order to be effective, the waiver must be conspicuously “set forth on the face of such contract in capital letters which are at least two points larger than the other type in the contract.” The Fairfax County Circuit Court has held that a builder’s implied warranty waiver provision was unenforceable, even though it specifically named all of the warranties and was in all capital letters, because the font size used was not at least two points larger than the other type in the sales contract.

Third, if all implied warranties are waived, the contract must state in capital letters at least two points larger than the other type in the contract that the dwelling is being sold “AS IS.” One circuit court has interpreted this language to mean that if all of the implied warranties provided by Virginia Code § 55-70.1 are to be waived, the waiver must still use the language “AS IS.” While this interpretation may be a literal reading of the statute, it exhibits a lack of understanding of almost all new home sales in Virginia. The vast majority of new home builders waive the statutory implied warranties, provide a replacement limited builder warranty, and do not intend to sell the home “AS IS.” Nevertheless, under this interpretation of the statute, the sales contract must say that the sale is “AS IS” in order to waive the implied warranties, even if the homebuilder is providing an alternative limited warranty.

The risk of having the court determine that your homebuyer can use the implied statutory warranties against you creates a serious problem for builders. The court will now replace the more objective standard under your limited builder warranty with the far more elastic and subjective standard of the statute—i.e., whether the home you built is “free from structural defects…, constructed in a workmanlike manner…, and fit for habitation.” As you would expect, these standards can mean whatever your most problematic homeowner wants them to mean.

If you have any questions about whether your contract language effectively waives these implied warranties, please call Garth Wainman or Matt Westover at (703) 680-4664.

Sellers and Buyers of Real Property Advertised “As Is” Should Beware

Posted on March 12, 2015 by Michael Kalish

Source: Susan Lynch

Buyers and sellers of real estate should take note of a recent opinion from the Supreme Court of Virginia that clarifies the line between “buyer beware” and fraud.

In the matter of Devine v. Buki, the seller of a 200-year-old residential property in Northumberland County known as “Rock Hall” undertook renovations of the structure in 2005 before placing the property for sale in 2006. The seller, through a local Realtor, then advertised the property as having been “completely restored.”

In 2007, the seller entered into a sales contract with the buyers that explicitly stated the seller made no representations or warranties with respect to the property and that Rock Hall was being sold “as is … with all defects which may exist, if any, except as otherwise provided in the real estate contract.”

The buyer then retained two separate inspectors to inspect the property. The first noticed evidence of a water stain and mold, but told the buyers he found “nothing that would cause him to tell a potential purchaser not to buy Rock Hall.” The second inspector noted moisture and insect damage in the basement, but found no evidence of infestation in the home and believed the moisture issues were “not out of the ordinary for the area.” The buyers closed on the purchase of Rock Hall after requesting minor repairs related to the visible water stain.

After closing on the property, the buyers noticed excessive leaking and hired contractors to inspect the property again. The contractors inspected the siding of the home and noticed that some of the siding and corner posts had been replaced with new material. When they removed the newer siding, they found substantial rot and termite damage. The buyers sued the seller for fraud and for violating the Virginia Consumer Protection Act.

The seller, who didn’t deny that he concealed damage to the property, attempted to rely on the fact that the contract specifically stated that the property was being sold “as is” and that no representations or warranties were being made with respect to Rock Hall’s status. Ultimately, the Supreme Court held that it didn’t matter whether the false statements or concealment by the seller occurred before or after entry of the contract. Because of this, neither the “as is” clause nor the inspectors’ failure to catch the actual extent of the damage relieved the seller of his prior acts of concealment. The Supreme Court affirmed the trial court’s decision to rescind the sales contract and award attorney’s fees to the buyers.

Although no new rulings of law came out this action, the decision serves as an excellent starting point for buyers considering whether to pursue action against a seller when a previously unknown condition is found after the sale of property. On the one hand, buyers’ failure to obtain affirmative representations or warranties and the use of an “as is” contract did not cause a death knell to the case for this buyer. On the other hand, the seller did not deny that he had taken affirmative steps to conceal damage to the property despite marketing it as “completely renovated.” One wonders whether the buyers would have achieved the same result if the seller had challenged the extent of his alleged concealment and not relied so heavily on the “as is” clause. Either way, sellers of real property should take notice that an “as is” contract alone will not necessarily shield them from consequences of their actions and statements made with respect to the property for sale.

Subdivision/Easement Deeds: One Size Does Not Fit All

Posted on January 5, 2015 by Bryan Guidash

After many months of working through a site plan or subdivision plan, builders, developers, business owners, or even individual homeowners will find they have almost reached the finish line. At that point, their engineers have advised them that they need a subdivision/easement deed to complete the process. The requirement for such a deed is fundamentally the same in all counties, cities, and towns in Virginia that require them – to accompany the plat dedicating public right-of-way and various easements in furtherance of an approved plan. Depending upon the jurisdiction, however, the form, content and processing of the deed can vary widely.

Interestingly, Virginia law does not require the use of subdivision/easement deeds per se. In fact, Section 15.2-2265 of the Code of Virginia, 1950, as amended, provides that an approved plat in proper form:

shall operate to transfer, in fee simple, to the respective localities in which the land lies the portion of the premises platted as is on the plat set apart for streets, alleys or other public use and to transfer to the locality any easement indicated on the plat to create a public right of passage over the land. The recordation of such plat shall operate to transfer to the locality, or to such association or public authority as the locality may provide, such easements shown on the plat for the conveyance of stormwater, domestic water and sewage, including the installation and maintenance of any facilities utilized for such purposes, as the locality may require.

Historically, the dedication of public right-of-way and the grant of these easements were accomplished throughout Virginia merely by the recordation of plats. In a number of rural jurisdictions, that remains the preferred method even today. Over time, though, particularly in urban and suburban areas, zoning and subdivision ordinances have expanded their reach in the development process, site plans have become more complex, and many jurisdictions have established their own departments of public works and/or public utility authorities. These changes have brought about a greater need to define and allocate the terms and conditions of various easements (e.g., maintenance responsibility) and have increased the reliance upon subdivision/easement deeds.

In northern and central Virginia, most jurisdictions have developed some sort of form subdivision/easement deed. For example, the suggested forms in Loudoun, Fairfax, and Prince William Counties are comprehensive and cover everything from subdivision to street dedication, storm drainage easements, water and sanitary sewer line easements, landscaping easements, buffers, conservation areas, trails, sidewalks, retaining walls and a host of other matters. In addition, many counties have Assistant County Attorneys and paralegals dedicated, in whole or in part, to processing subdivision/easement deeds. Although these jurisdictions have attempted to include as much as they can anticipate, these forms are not all-inclusive. For example, as site plans continue to evolve with new technology and methodology, items such as alternative drainage systems can lead to alterations in the language of a form deed or a storm water management maintenance agreement required to accompany such deed. WCL&W has many years of experience working with the planning and development offices and the Assistant County Attorneys and paralegals in these jurisdictions to adapt subdivision/easement deeds where appropriate.

In other jurisdictions, the form deed is not as comprehensive, and the County Attorney’s Office is not as hands-on when it comes to processing such deeds. For example, the form deeds in Stafford and Spotsylvania Counties are limited to street dedication, storm drainage easements, and water and sanitary sewer line easements. Although many public and private easements may appear on the plats for a project, they are not covered in the form subdivision/deed. Therefore, a judgment call has to be made whether to include these easements in the form deed or to address them in a separate instrument. Also noteworthy is the fact that the Planner assigned to a particular plan has a very active role in reviewing the deed in these jurisdictions. Therefore, different approaches to the process may be required depending on the assigned Planner. Again, WCL&W has extensive experience working with the planning and development offices and the Assistant County Attorneys and paralegals to adapt their deeds where appropriate and to make decisions on addressing items not contemplated in the County’s form deed.

In summary, jurisdictions throughout the Commonwealth of Virginia have various processes and requirements with respect to subdivision/easement deeds. WCL&W has a tremendous amount of experience assisting its clients in navigating these requirements in the counties, cities, and towns of northern and central Virginia. We welcome the opportunity to assist you with your project needs in this arena.

Virginia Square/Latitude Site

Posted on December 11, 2013May 21, 2019 by The Land Lawyers

At the November 16, 2013 Arlington County Board Hearing, Board Member, Libby Garvey, stated that [She] ” …felt it was one of the best changes we could make for the community and although she hears the importance of the Sector Plan, she supports the motion.” She was affirming her position on voting in favor of the Penrose Group’s rezoning and site plan for the block bounded by Fairfax Drive, North Monroe Street, 10th Street North and North Nelson Street in Virginia Square. The County Board approved this site plan, 3 votes to 2, for a twelve-story, 265 unit residential building with ground floor retail, a cultural space, two connected public plazas and 262 below-grade parking spaces. The building will be LEED Gold and LEED EBOM certified and includes a kinetic art sculpture in the Fairfax Drive plaza. The site plan received bonus density for the LEED certifications as well as for the provision of affordable housing in the form on 14 on-site units, 11 of which are two bedroom units.

Nan Walsh, assisted by Megan Rappolt and Elizabeth Nicholson, partner and land use planners respectively with Walsh, Colucci, Lubeley & Walsh, P.C. worked through the County Site Plan process with Tysons-based developer, Penrose Group. The project, called “The Latitude” was deferred at its July 2013 Planning Commission hearing due to a concern about the residential use not being compliant with the guidance in the 2002 Virginia Square Sector Plan. At the July Planning Commission hearing, the County Manager recommended an Ad-Hoc Committee comprised of Planning Commissioners and citizens who opposed the project to review the Sector Plan text specific to this project. The Ad-Hoc Committee resulted in no consensus and a four month deferral of the case. On November 6, 2013 The Latitude returned for a second full public hearing before the Planning Commission and left with another recommendation for deferral.

Given that the case would rise and fall on a policy question, the outcome of the case was uncertain, until the County Board took their final vote. During her County Board presentation, Nan Walsh said that the plan addressed 95 Virginia Square Sector Plan goals. In making her case for the residential project, she continued “The plan before you not only checks the Sector Plan boxes, but checks them more boldly than its office counterpart could.” In addition, Walsh stated, ” By way of example, I would submit to you that our site plan today provides more open space, more interesting architecture and tapering, greater building setbacks from our neighbors, better/more inviting pedestrian connectivity around and through the site, 630 less daily automobile trips, and a variety of housing types and affordability than its office counterpart would provide.”

After 34 public speakers, evenly split on the case, and nearly five hours of public hearing, Board Members Fisette, Tejada and Garvey voted to approve the project. Tejada indicated that his vote had come down to the applicant’s provision of on-site affordable housing in such close proximity to the Virginia Square Metro station. Board Member Fisette stated that this is not to be a precedent in regard to the Sector Plan, but that he thinks this will be a positive addition to community. He said that he likes the open space, energy efficiency, affordable housing, and cultural amenity provided with the project.

Nan Walsh Braves High Winds and Neon Vest at Topping-Out Party

Posted on June 28, 2013May 21, 2019 by Admin

Nan Walsh with Cecelia Cassidy, Editor and Publisher of the publication “Rosslyn” at the 1812 N Moore Street Topping-Out Party

Nan worked for 2 years with Monday Properties on the zoning entitlements for their landmark building located at 1812 N. Moore Street in Arlington. This 35-story, 390-foot high office building is now the tallest building in the region. It is located in the heart of Rosslyn and when leased will contain approximately 580,000 square feet of office, 12,000 square feet of retail and direct access to the Rosslyn Metro Station.

City of Fairfax Approves Multi-Family Redevelopment

Posted on June 26, 2013May 21, 2019 by Admin

In recent years, the City of Fairfax has been reluctant to support multi-family development; however, in a significant decision on May 14, 2013, the City of Fairfax approved redevelopment of 110 existing and outdated garden-style units in the Layton Hall Apartment complex with a 360 unit, multi-family development. The approved development is comprised of high quality, 4 and 5 story residential buildings, structured parking and an urban walkable environment with high-quality streetscape elements, including landscaping, a brick sidewalk, and improved trail along University Drive, pedestrian crosswalks, and pedestrian refuge islands. By creating these pedestrian features, the redevelopment will create walking opportunities for all pedestrians, not just for those residing in the development. The result is that the redevelopment of Layton Hall will create a renewed synergy with downtown Fairfax City, which will enhance the vitality of the downtown area.

In addition to a pedestrian-friendly environment, Transportation Demand Management strategies will be implemented with the redevelopment, including the addition of on-site bike storage, the establishment of bike lanes on adjacent public roads, the distribution of Smart Trip Cards to new residents, and an electric vehicle charging station for use by the residents. These varied techniques will promote a reduction in the number of vehicle trips to and from the property.

The proposed architectural style is traditional, in keeping with the character of the City of Fairfax. The proposed buildings will be primarily constructed of brick, and incorporate universal design features and sustainable design elements.

A number of site design features influenced the City’s decision including environmental considerations as the building layout removes existing buildings from the floodplain, stormwater management will be installed when none exists, and environmentally beneficial materials are encouraged, such as the use of pervious pavers in the final design.

Given the affordable nature of the existing apartments, the City Council raised concerns about the preservation of affordable housing. The redevelopment includes a robust tenant relocation plan and a set aside of five percent of the total number of units as workforce housing. Subsequently the City Council directed the Planning Commission to evaluate and draft a formal policy and/or ordinance for the provision of affordable and workforce housing in the City.