General Assembly Adjourns:  What does it mean for real estate?

The General Assembly adjourned the 2018 session on Saturday, March 10, 2018.  The Virginia Realtors® Legislative Team along with many local Government Affairs Director worked tirelessly to shepherd the statewide agenda through the legislative process.  See below for summary of the bills that were enacted during the session.

Team Legislation – Delegate Chris Peace (HB 862) / Senator Glen Sturtevant (SB 758)

• The legislation defines a Real Estate Team as “two or more individuals, one or more of whom is a real estate salesperson or broker, who (i) work together as a unit within the same brokerage firm, (ii) represent themselves to the public as working together as one unit, and (iii) designate themselves by a fictitious name.”
• Clarifies that a Real Estate Team, even individual licensees with unlicensed assistants identifying as a team, will have to obtain a business entity salesperson license.  The requirement to obtain a Business Entity License already exists in the statute and DPOR believes that a Real Estate Team should already be obtaining a Business Entity License. This clarification in the statute allows consumers and other members of the general public to search on-line at DPOR for a Real Estate Team.
• Requires any principal broker maintaining more than one place of business to obtain a branch office license for each place of business maintained.
• Requires brokerage agreements (buyer’s and seller’s agreements) to include the name and contact information of the supervising broker. Consumers need to know, in all transactions, who the supervising broker is should a problem arise.

Translation of Documents Non – English Language – Delegate David Bulova (HB 439)/ Senator Monty Mason (SB 528)

This legislation encourages real estate licensees to assist the growing diverse population in the Commonwealth by establishing statutory authority for a real estate licensee to refer a party to one or more translation services so the party can contract directly with a translation service of their choosing. The legislation would also make clear that the real estate licensee is not liable for any inaccuracies that may occur by the translator or translation service since all the real estate licensee is doing is advising the party of the availability of translation services. A real estate licensee may not charge a fee for such assistance or referral.

Earnest Money Deposits – Broker Education – Post-License CE – Other Technical Changes – Delegate Riley Ingram (HB 864) / Senator Dave Suetterlein (SB 514)

This legislation would establish in statute a right for the real estate broker to give written notice to the parties and disburse an earnest money deposit in accordance with the clear terms of a real estate purchase contract. The legislation also gives a real estate broker an option to give written notice of intended disbursement, with a 15-day “protest period” for one of the parties to object in writing.  If a party objects in writing, the likely option at that point would be to go to court.

This legislation stipulates that two hours of the existing eight-hour broker education focus on the requirements for broker supervision under the Code of Virginia and the Real Estate Board Regulations. The bill also adds real estate finance to the existing curriculum for post-licensure education.

It requires the Real Estate Board to develop a form to be signed by the parties acknowledging that the purchaser has been advised to review the residential property disclosure statement on the Board’s website.  Finally, this legislation makes a series of technical edits to various sections of the Real Estate Licensing Law.

Condo and Property Owners Associations – Delegate David Bulova (HB 923)

This legislation would require all Common Interest Communities (Condo and Property Owner Associations) to provide a short summary of important information contained in the resale certificate or disclosure packet, delivered at the same time as the Resale Certificate or Disclosure Packet.  Much like the Residential Real Property Disclosure Statement, this summary will provide buyers with a summary of items that could affect their decision to purchase a home in a Common Interest Community including:

• Annual dues
• Special assessments
• Rental restrictions
• Parking or vehicular restrictions
• Pet restrictions
• Architectural restrictions
• Home businesses
• Length of declarant control

Acceptance of Rent with Reservation – Delegate Chris Peace (HB 855) / Senator Mamie Locke (SB 197)

The current statute requires a landlord to give a notice of acceptance of rent with reservation in order to accept rental payments and still move forward with eviction.  The current language of the statute is being interpreted different ways by different judges, so that landlords and tenants, property managers and lawyers don’t know exactly how to handle these notices. The purpose of this legislation is to simply clarify the existing law removing the requirement for second notice for the time period between entry of an order of possession and prior to eviction, thus eliminating the confusion with the existing statutory language.

Lexington-Virginia Beach Short-Term Rental Ordinance – Delegate Barry Knight (HB 824)

Earlier this year, the City of Lexington passed an ordinance to regulate short-term rentals that violates state law in a number of different ways.  Among other items, the local ordinance prohibits individuals from owning more than one rental property, requires BPOL taxes, requires a business license, etc.  The purpose of this legislation is to require the City of Lexington to amend its ordinance to come into compliance with various provisions of state law. Every other locality in the Commonwealth that has adopted a short-term rental ordinance has complied with state law and the City of Lexington should be required to do the same thing. Additionally, the bill was amended in conference to add that any short-term rental located in the Sandbridge Special Service District in the City of Virginia Beach shall be a principal use subject to the City’s regulations applicable to short-term rentals. This amendment was added after Virginia Beach’s planning commission proposed an ordinance for short-term rentals which required operators to obtain conditional use permits.

Clarification of Supreme Court Case – Title – Delegate Marcus Simon (HB 311)

A real property owner who buys a house at foreclosure sale, if the occupant does not move out, would file an unlawful detainer in the general district court.  In the Parrish case, the occupant challenged the legal title of the successor owner and the Supreme Court ruled that such owner would have to try “sufficiency of legal title” in the circuit court since a general district court does not have jurisdiction to try legal title to real property.  The Office of the Executive Secretary of the Virginia Supreme Court (OES) prepared a narrative in the general district court judge’s manual to try to head off the potential of every unlawful detainer case getting derailed by assertion by a tenant or other occupant of insufficiency of legal title to real property. The purpose of this legislation is to put into statutory language the substance of the OES judge’s manual narrative.

The FAAR Public Policy Committee is currently soliciting for issues to review for possible inclusion in the 2019 Legislative Package.  If you have an issue of concern, please visit www.faarmembers.com/submit-an-issue/ to send it along to the Committee for consideration.