During the 2023 General Assembly session, the Virginia REALTORS® government relations team reviewed hundreds of bills, including the thousands of amendments made to the bills as they worked their way through the system, and worked tirelessly to protect your business and the rights of property owners.
Below is a summary of the legislation that passed that will have an impact on how you do business. Each description starts with what the bill does and then contains information on what that law means.
If you want to read the full text of the legislation, the bill number provided is a hyperlink to the text of the bill as it is enacted into law. All laws are effective July 1, 2023 unless otherwise noted. Bills that were part of the Virginia REALTORS® Legislative Agenda are also noted.
1 Common Interest Communities
1.1 Resale Certificates (HB 2235 / SB 1222) (Virginia REALTORS®)
These two bills start by creating a new “Resale Disclosure Act” that combines the resale disclosure requirements for all common interest communities in one place. This means that the resale certificate from the Condo Act and the disclosure packet from the POA Act are in one place and have the same requirements. There are no changes to how the disclosure works, but there are other changes.
These bills clarify that “days” for deadlines are calendar days, not business days. This has always been the case, but since there was some confusion the law is now explicit. The bills also remove distinctions between professionally and self-managed associations.
Next, the new law creates a default that all packet fees – including for ordering the resale certificate, expedite fees, and update fees – are due when the item is ordered. This means that when a seller orders the resale certificate, they will have to pay for the certificate at that time, not at settlement, unless the association adopts a different policy. While this is a big change from before, it was the only concession the common interest communities asked for in exchange for not fighting the REALTORS® on any other change to the law.
The new law also allows the parties to negotiate the buyer’s right to terminate after receiving the resale disclosure. This means that the buyer can waive their right to terminate entirely or the parties can agree to an extension of the right to terminate period. While the buyer can waive the right to terminate, the law does not allow the parties to waive the seller’s obligation to provide the packet to the buyer.
Finally, these bills require the Common Interest Community Board (CICB) to create a standardized resale certificate form and format. Now, the resale certificate will be consistent across all associations, and it should be easier for you and your clients to find specific information. This means that every resale certificate will have a coversheet that acts as almost as a “Table of Contents” and the supporting documentation or information for that item will be attached in order.
Note: These bills contain a provision that specifies that they do not apply to any contracts ratified prior to July 1, 2023. This means that if you have a contract that is ratified on or before June 30, you will be operating under the old law. If you have a contract that is ratified on or after July 1, the seller will need to provide the new resale certificate.
The certificate must have the following information, in this order (bolded items are new/do not exist in current law):
- The name, address, and phone numbers of the preparer of the resale certificate and any managing agent of the association;
- A statement disclosing any restraint on the alienability of the unit for which the resale certificate is being issued;
- A statement of the amount and payment schedules of assessments and any unpaid assessments currently due and payable to the association;
- A statement of any other fees due and payable by an owner of the unit;
- A statement of any other entity or facility to which the owner of the unit being sold may be liable for assessments, fees, or other charges due to the ownership of the unit;
- A statement of the amount and payment schedule of any approved additional or special assessment and any unpaid additional or special assessment currently due and payable;
- A statement of any capital expenditures approved by the association for the current and succeeding fiscal years;
- A statement of the amount of any reserves for capital expenditures and of any portions of those reserves designated by the association for any specified projects;
- The most recent balance sheet and income and expense statement, if any, of the association;
- The current operating budget of the association;
- The current reserve study, or a summary of such study;
- A statement of any unsatisfied judgments against the association and the nature and status of any pending actions in which the association is a party and that could have a material impact on the association, the owners, or the unit being sold;
- A statement describing any insurance coverage provided by the association for the benefit of the owners, including fidelity coverage, and any insurance coverage recommended or required to be obtained by the owners;
- A statement as to whether the board has given or received written notice that any existing uses, occupancies, alterations, or improvements in or to the unit being sold or to the limited elements assigned thereto violate any provision of the governing documents or rules and regulations together with copies of any notices provided;
- A statement as to whether the board has received written notice from a governmental agency of any violation of environmental, health, or building codes with respect to the unit being sold, the limited elements assigned thereto, or any other portion of the common interest community that has not been cured;
- A copy of any approved minutes of meetings of the board held during the last six months;
- A copy of any approved or draft minutes of the most recent association meeting;
- A statement of the remaining term of any leasehold estate affecting a common area or common element, as those terms are defined in §§ 1-1800, 55.1-1900, and 55.1-2100, in the common interest community and the provisions governing any extension or renewal of such leasehold;
- A statement of any limitation in the governing documents on the number or age of persons who may occupy a unit as a dwelling;
- A statement setting forth any restriction, limitation, or prohibition on the right of an owner to display the flag of the United States, including reasonable restrictions as to the size, time, place, and manner of placement or display of such flag;
- A statement setting forth any restriction, limitation, or prohibition on the right of an owner to install or use solar energy collection devices on the owner’s unit or limited element;
- A statement setting forth any restriction, limitation, or prohibition on the size, placement, or duration of display of political, for sale, or any other signs on the property;
- A statement identifying any parking or vehicle restriction, limitation, or prohibition in the governing documents or rules and regulations;
- A statement setting forth any restriction, limitation, or prohibition on the operation of a home-based business that otherwise complies with all applicable local ordinances;
- A statement setting forth any restriction, limitation, or prohibition on an owner’s ability to rent the unit;
- In a cooperative, an accountant’s statement, if any was prepared, as to the deductibility for federal income tax purposes by the owner of real estate taxes and interest paid by the association;
- A statement describing any pending sale or encumbrance of common elements;
- A statement indicating any known project approvals currently in effect issued by secondary mortgage market agencies; and
- Certification that the association has filed with the Common Interest Community Board the annual report required by law, which certification shall indicate the filing number assigned by the Common Interest Community Board and the expiration date of such filing.
1.2 Repeat Violations (HB 1627 / SB 1042) (Virginia REALTORS®)
These bills may not directly impact you, but should help if you get a call from a frustrated client. There is an Ombudsman at the Common Interest Community Board that is an attorney who is there to assist members of common interest communities when dealing with their associations. These bills give the CIC Ombudsman more duties and powers. Now, if the Ombudsman receives notices of final adverse decisions, they can either refer the decision to the CICB for further review to determine whether the decision is in conflict with existing laws or regulations, or they can make a determination themselves and notify the complainant of the determination. If, within 365 days of issuing a determination, the Ombudsman receives a subsequent complaint for the same violation, the Ombudsman must refer the matter to the CICB.
1.3 CIC Management Contracts (HB 1519)
Any Common Interest Community Management Contracts that include an automatic renewal provision may be terminated by the association or the CIC manager at any time, without cause, with at least 60 days notice, even if such a provision is not included in the contract.
If someone is licensed or certified in another jurisdiction and applies for a similar license in Virginia, DPOR must recognize the license or certification and grant a Virginia license if certain requirements are met.
The applicant must:
Have a current, valid license in a similar scope of practice;
Have held the license for at least 3 years;
Have passed an exam and meet certain standards related to education, training, or experience;
Not have any pending or unresolved complaints and is in good standing;
Not have a disqualifying criminal record;
Not have been disciplined, except if the discipline was only a fine and no harm to the health or economic wellbeing of the public was involved; and
Pay the applicable fees.
Note that DPOR is allowed to require a Virginia specific exam if such exam is required of other applicants.
If another state that does not use a professional or occupational license or government certification to regulate a profession or occupation but Virginia does, DPOR must recognize the experience of the individual from their time in the other state with similar requirements to individuals who are licensed or certified by their jurisdiction.
2.2 Appraiser Licensure (HB 1418)
Currently, applicants for an appraiser license must obtain experience in the field of real estate appraisals under a licensed or certified appraiser prior to being granted a license.
This bill requires the Real Estate Appraiser Board to accept the Certified Residential Practical Applications of Real Estate Appraisal (“PAREA”) or Licensed Residential PAREA experience training program approved by the Appraiser Qualifications Board to satisfy the experience requirements.
Applicants who have completed the Licensed Residential PAREA program receive the equivalent of 1,000 hours of experience. Applicants who have completed the Certified PAREA program receive the equivalent of 1,500 hours of experience.
This should allow more appraisers to become licensed, especially in underserved communities where applicants may have had difficulty finding a licensed or certified appraiser to train under.
3.1 Judgement Liens (HB 2184)
This bill allows a settlement agent to release judgement liens on property in certain circumstances. Essentially, if the settlement agent attempts to obtain payoff information and is unable to, there is now a process for releasing a judgment lien when the lien creditor cannot be located or does not provide payoff information. This only applies to judgments of less than $25,000 as of the date of the award, and it only covers judgment liens older than three years.
3.2 Settlement Fees (HB 1888)
This bill adds language to the Virginia Real Estate Settlement Act in the Choice of Settlement Agent and Disclosure sections. The new language reads “The settlement agent may not collect any fees from a represented seller payable to the settlement agent or its subsidiaries, affiliates, or subcontractors without first obtaining the written consent of the seller’s counsel.”
This means that if the seller has hired an attorney to represent them in the transaction, they cannot be charged any fees by the settlement agent without their attorney agreeing.
4.1 Disabled Veteran/Surviving Spouse (HB 2414)
Currently, a disabled veteran or surviving spouse may claim a tax exemption on real property by applying with the locality once they have purchased a property.
This bill allows the veteran or spouse to apply for the tax exemption prior to purchasing a qualifying dwelling by filing the required documentation along with documentation of the purchase agreement. Within 20 business days of receiving the application, the locality’s commissioner of the revenue must process the application and send the veteran or spouse a letter stating whether the application is approved or denied. If the application is approved, the letter must also include the amount of the tax exemption.
Essentially, this bill allows a disabled veteran or surviving spouse to begin the application process while they are under contract, rather than having to wait until after settlement.
4.2 Transient Occupancy Taxes (HB 1442)
This bill requires the Department of Taxation to publish on its website each year the current rate of the transient occupancy tax imposed by each locality. This will make it easier for anyone who manages short term rentals to determine the transient occupancy tax in each locality.
4.3 Delinquent Taxes (HB 2110)
This bill updates the law regarding a taxpayer’s right of redemption. Currently, the taxpayer can request a payment plan for a period not to exceed 60 months. The new law will allow that payment plan to be for a period not to exceed 72 months.
5.1 Post Lease Repairs (HB 1542 / SB 891) (Virginia REALTORS®)
These bills contain a temporary provision that will allow for an additional 15 days for landlords to obtain estimates and perform repairs after the end of the lease. Because of the pandemic, it has been difficult to get contractors and supplies to complete necessary repairs within the current 60 day timeframe. This means that starting on July 1, 2023, if the damages exceed the amount of the security deposit and require the services of a third-party contractor, the landlord must give written notice of that fact within 45-days of the termination of tenancy. If this happens, the landlord will have 30 days to provide an itemization of the damages and the cost of repair.
The 30 days to provide an itemization of the damages and the cost of repairs will revert back to 15 days on June 30, 2024.
5.2 Uninhabitable Property (HB 1635)
This bill creates a mechanism for a tenant to terminate a lease and receive a refund of all rents and deposits paid if the property is uninhabitable at possession.
If a condition exists at the beginning of the tenancy that constitutes a fire hazard or serious threat to the life, health, or safety of tenants or occupants, the tenant may terminate the lease by providing written notice to the landlord within seven days. The landlord then has 15 business days to either refund all monies paid by the tenant or provide written notice of his refusal to accept the tenant’s termination notice, along with the reasons for the refusal. If the landlord disputes the tenant’s termination, the tenant has the right to file in court for a determination of whether their termination was justified.
“Serious threat to the life, health, or safety of tenants or occupants” include an infestation of rodents or a lack of heat, hot or cold running water, electricity, or adequate sewage disposal facilities.
5.3 Assistance Animals (HB 1725)
This bill makes it a violation of the Virginia Consumer Protection Act for a person with a therapeutic relationship to provide fraudulent supporting documentation of an individual’s disability or disability related need for an assistance animal.
The Virginia Consumer Protection Act allows any person who suffers a loss as the result of a violation to sue for actual damages, or $500, whichever is greater. If the violation is willful, the trier of fact can increase damages to three times actual damages or $1,000, whichever is greater.
5.4 Statement of Tenants Rights and Responsibilities Form (HB 1735)
This bill clarifies the requirements for providing the Statement of Tenants Rights & Responsibilities form.
If the tenant does not sign the form, the landlord must record the date that they provided the form to the tenant and the fact that the tenant failed to sign the form. This notation will now be sufficient to satisfy the requirements of the law and allow landlords to bring unlawful detainer actions if necessary.
Additionally, the bill states that after the effective date of the tenancy, the landlord may, but is not required to, provide a tenant with the form and allow the tenant to sign the form. This means that landlords to not have to provide tenants with a copy of the form at each lease renewal.
Finally, the bill states that the form shall be current as of the date of delivery. This means that there is no obligation to provide a copy of the form to tenants each time it is updated or changed.
5.5 Rent Increase Notice (HB 1702)
This bill requires any landlord who owns more than four rental dwelling units in Virginia, or more than a 10% interest in more than four dwelling units, to provide written notice to any tenant who has the option to renew a lease or has a lease that contains an automatic renewal provision of any increase in rent during the subsequent term. This notice must be given no less than 60 days prior to the end of the rental term.
5.6 Summons for Unlawful Detainer Instructions (HB 1996)
This bill requires the Virginia Supreme Court to create plain English instructions that explain to defendants how to interpret the Summons for Unlawful Detainer.
6 Business & Employment
6.1 Virginia Consumer Protection Act (SB 988)
This bill exempts residential property sales between individuals involving the seller’s private residence. Note that real estate licensees are already exempt from the Virginia Consumer Protection Act (“VCPA”). This means that if you are representing a buyer in a FSBO, the seller’s actions will no longer be covered by the VCPA.
6.2 Nondisclosure Agreements/Confidentiality (HB 1895)
Employers are prohibited from including a provision in a Nondisclosure Agreement (“NDA”) or confidentiality provisions of any agreement that has the purpose or effect of concealing the details relating to a claim of sexual assault or sexual harassment. Note that this only applies to employers, so this will only impact those who have W2 employees.
6.3 Social Security Numbers (SB 1040)
Employers are prohibited from using an employee’s social security number, or a derivative of it, as an employee identification number. Employers are also prohibited from using an employee’s social security number, or a derivative, on the employee’s ID card or badge, access card or badge, or any similar card or badge issued to the employee. Again, this only applies to employers with W2 employees.
7.1 Housing Study (HB 2046 / SB 893)
These bills require that the Department of Housing and Community Development (“DHCD”) conduct a comprehensive statewide housing needs assessment survey every five years. This assessment must include a review of housing cost burden and instability, supply and demand for affordable rental housing, and supply and demand for affordable for-sale housing, as well as regional or local profiles that focus on specific housing needs of particular regions or localities.
They also require DHCD to develop a statewide housing plan based on the comprehensive survey that will include measurable goals and be updated at least every five years to reflect changes in Virginia’s housing goals.
Finally, localities with a population greater than 3,500 must submit annual reports to DHCD that summarize the adoption or amendment of any local policies, ordinances, or processes affecting the development and construction of housing during the preceding fiscal year.