May 30, 2014
During the 2014 session of the Virginia General Assembly, several bills of interest to the real estate industry were passed and subsequently signed by the governor. The laws become effective on July 1, 2014.
Below is a brief description of four bills of particular note.
SB116: This bill allows an attorney to record an affidavit to correct an obvious description error contained in a recorded deed, deed of trust or mortgage.
HB1084: This bill provides that an applicant who is aggrieved by a locality’s granting or denial of any approval or permit − where such grant included an unconstitutional condition or the denial was based on one − will be entitled to an award of compensatory damages and may be awarded reasonable attorney fees and costs. The bill also creates a presumption that a condition proven to be unconstitutional was a factor in the grant or denial of the permit, and it provides that the applicant shall be entitled to an order remanding the matter to the locality with a direction to grant or issue such permits or approvals without the unconstitutional condition.
HB525: Under current law, every notice of assessment of real property must set forth (i) the new and prior appraised values of land and appraised value of improvements, and the assessed values of such if different from the appraised values; (ii) the new tax rate and the rates for the prior tax year; (iii) the total new tax levy and the tax levies for the prior year; and (iv) the percentage of change in such levies. This bill alters the language to include the current year as well as the prior two years. It also requires the notice to inform each property owner of his right to review and make copies of records maintained by the local assessment office.
HB763: This bill removes the requirement that a deed of trust trustee’s office be located within the commonwealth and expressly permits limited liability companies, partnerships and other entities to act as trustees. Note that this bill does not change the requirement that an individual acting as a trustee must still be a resident of Virginia and that a corporation, limited liability company, partnership or other entity acting as trustee must still be organized in the commonwealth, unless the deed of trust (i) conveys property partly in the commonwealth and partly outside of the commonwealth, or (ii) conveys property in the commonwealth to secure bonds or obligations that are secured by one or more deeds of trust or mortgages conveying property outside of the commonwealth. This bill also allows for the use of a cover sheet in the presentation of instruments for recordation, even in jurisdictions that do not currently require the use of cover sheets. The cover sheet provision shall take effect January 1, 2015, when the Office of the Executive Secretary of the Supreme Court of Virginia will develop a nonelectronic, hard-copy form of cover sheet consistent with this bill.
The following are summaries of other real-estate-related bills adopted by the 2014 General Assembly.
SB435 Clerks; order books; remote access to court records; electronic filing; information technology fees; posting of certain information on the Internet. Provides that circuit court clerks may keep an automated system in lieu of order books and land books as well as allow remote access to that system with regard to nonconfidential court records. The bill permits circuit court clerks to keep court records at a designated location outside of the clerk's office. The bill also exempts instruments and records that are more than 100 years old from the prohibition against clerks posting personal information on the Internet.
Patron – McDougle
HB143 Courthouse; posting of notices; website. Provides that documents required to be posted by a clerk on or at the front door of a courthouse or on a public bulletin board at a courthouse may instead be posted on the public government website of the locality served by the court.
Patron - Minchew
HB1160 Rules of statutory construction; computation of time. Provides that for the purposes of the section of law relating to the computation of time, any day for which the governor authorizes closing the state government shall be considered a legal holiday.
Patron – Adams
HB607 Clerk; recordation; marginal release. Removes the requirement that the clerk of the circuit court make recordings in the margins of pages in record books to accommodate the use of electronic filing databases by circuit court clerks.
Patron – Robinson
HB968 Purchasers of brownfield properties. Changes the definition of the "bona fide prospective purchaser" of brownfield property to include not only the person who acquires or proposes to acquire ownership of a brownfield property but also the tenant of such person. The bill conforms Virginia's definition with the federal definition.
Patron – James
Counties, Cities and Towns:
HB209 Preliminary subdivision plats. Provides that localities may mandate the submission of preliminary subdivision plats for tentative approval only if each plat involves more than 50 lots.
Patron - Marshall, D.W.
HB652 Boundary adjustments; notice. Provides that all affected landowners shall be given notice of a proposed voluntary boundary adjustment. The bill authorizes landowners to file a petition to intervene in the action under certain circumstances.
Patron – LaRock
HB1210 Community improvement district. Allows for the creation by ordinance of a community improvement district in any locality. The bill provides that the locality's governing board will have all of the powers with respect to the district that it has with respect to a standard service district. The bill also requires that if the locality contracts for any government services on behalf of the district, it shall do so with a nonprofit corporation, a majority of whose board members own property in the district.
Patron – Hester
Financial Institutions and Services:
SB74 Real estate loans; flood insurance. Prohibits a lender from requiring a borrower to provide flood insurance coverage, against risks to improvements on real property securing its loan, in an amount that exceeds the replacement value of the improvements.
Patron – Puckett
Property and Conveyances:
HB273 Virginia Residential Landlord and Tenant Act; applicability; security deposits. Changes the applicability of the Virginia Residential Landlord Tenant Act from the ownership of no more than 10 single-family residences to ownership of no more than two single-family residences, and makes the application uniform across the state. The bill also authorizes a landlord to expedite the disposition of security deposits under certain circumstances and sets the interest rate (0.00%) on security deposits for 2014. The bill repeals the requirement for a landlord to accrue interest on security deposits, effective January 1, 2015.
Patron – Loupassi
HB614 Landlord and tenant law; energy submetering; local government fees. Provides that in lieu of increasing the rent, the owner, manager or operator of a commercial or residential building or campground may employ a program that utilizes a mathematical formula for allocating the actual or anticipated local government fees billed to the building or campground owner among the tenants in such building or campground if this practice is clearly stated in the rental agreement or lease. Such owner, manager or operator of a commercial or residential building or campground also may charge and collect from each tenant additional service charges − including monthly billing fees, account setup fees and account move-out fees − to cover the actual costs of administrative expenses for administration of such a program. If the building is residential and is subject to the Virginia Residential Landlord and Tenant Act, such local government fees and administrative expenses shall be deemed to be rent. The bill defines the term "local government fees" as any local government charges or fees assessed against a commercial or residential building or campground, including stormwater, recycling, trash collection, elevator testing, fire or life safety testing, or residential rental inspection programs.
Patron – Miller
HB638 Virginia Residential Landlord and Tenant Act; tenant's noncompliance; death of tenant. Provides that the Virginia Residential Landlord and Tenant Act may be cited as the "Virginia Rental Housing Act." The bill also allows a landlord, regardless of whether a lawsuit is filed or an order is obtained from a court, to recover the following if the rental agreement so provides: (i) rent due and owing as outlined in the rental agreement, (ii) other charges and fees as outlined in the rental agreement, (iii) late charges outlined in the rental agreement, (iv) reasonable attorney fees as outlined in the rental agreement or as provided by law, (v) costs of the proceeding as outlined in the rental agreement or as provided by law only if court action has been filed, and (vi) damages to the dwelling unit or premises as outlined in the rental agreement. The bill also requires, in an action for breach of the rental agreement or noncompliance by the tenant, the court to award a monetary judgment to the landlord if the landlord prevails and specifies what is to be awarded by the court, unless in any such action, the tenant proves by a preponderance of the evidence that the tenant's failure to pay rent or vacate was reasonable. The bill also provides that in the event of the death of a tenant who is the sole occupant of the dwelling unit, the rental agreement is deemed to be terminated by the landlord as of the date of death and provides that the estate of the tenant remains liable for actual damages.
Patron – Miller
HB690 Condominium and Property Owners' Association Acts; merger of developments; reformation of declaration. Provides a process for the merger of two or more associations and a process for seeking judicial reformation of the declaration in both laws. The reformation procedure includes, among other requirements, at least 30 days' notice to the owners and the mortgagee and gives the mortgagee standing to participate in the reformation proceedings.
Patron – Massie
HB791 Condominium and Property Owners' Association Acts; rule enforcement. Gives associations the right, to the extent the governing documents’ duly adopted rules expressly provide, to (i) suspend a unit owner's right to use facilities or services, including utility services, that are provided directly through the unit owners' association, to compensate for nonpayment of assessments that are more than 60 days past due, to the extent that access to the unit through the common elements is not precluded and provided that such suspension shall not endanger the health, safety or property of any unit owner, tenant or occupant; (ii) assess charges against any unit owner for any violation of the condominium instruments or of the rules or regulations promulgated pursuant thereto for which such unit owner or his family members, tenants, guests or other invitees are responsible; and (iii) file or defend a legal action in general district or circuit court to seek an order requiring that any violation of the condominium instruments or rules duly adopted pursuant thereto be corrected. The bill further provides that, before any action authorized in the bill or in the governing documents is taken and after written notice of the alleged violation to the unit owner at the address required for notices of meetings, the owner shall be given a reasonable opportunity to correct the alleged violation. If the violation remains uncorrected, the owner shall be given an opportunity to be heard and to be represented by counsel before the board or such other tribunal as the governing documents or rules duly adopted pursuant thereto specify. The bill gives an appeal of right from general district court for a rule-enforcement-related action filed by a condominium unit owners' association or unit owner or for an action filed by a property owners' association or lot owner. Lastly, the bill provides that in the event of a legal action involving rule enforcement, the prevailing party is entitled to recover court costs and reasonable attorney fees. Currently, only the association is entitled to recover such costs and fees.
Patron – LeMunyon
HB799 Virginia Residential Property Disclosure Act; change in circumstances. Amends the requirement that the owner disclose to the purchaser at or before settlement any material change in the disclosures made relative to the property, in order to remove the option that the owner may certify to the purchaser at settlement that the disclosures already made are substantially the same.
Patron – Simon
HB899 Condominium Act; purchaser's right of cancellation. Reduces a purchaser's right of cancellation, from 10 to five calendar days from the contract date of the disposition or delivery of the current public offering statement, whichever is later. The bill also requires that the purchaser's right to cancel the purchase contract be set forth on the first page of the purchase contract in boldface print of not less than 12-point type.
Patron – Peace
HB900 Condominium Act and Property Owners' Association Act; allowable fees. Provides that neither law authorizes an association or common interest community manager to charge an inspection fee for a unit or lot unless the charge is specifically authorized, and that no additional fee may be charged for access to the association's or common-interest community manager's website. The bill provides that if a resale certificate or disclosure packet is made available in electronic format, a total fee not to exceed $125 is authorized for one electronic copy to each of the following named in the request: the seller, the seller's authorized agent, the purchaser, the purchaser's authorized agent and not more than one other person designated by the requester.
Patron – Peace
HB499 Real property tax; nonjudicial sale of certain delinquent property. Reduces the number of years of delinquency in payment of taxes, from five years to three years, before a locality may sell real property that (i) measures less than 4,000 square feet, or (ii) is determined to be unsuitable for building.
Patron – Yost
HB1000 Real property tax exemption; elderly and disabled. Provides that the real property tax exemption for the sole dwelling of the elderly and disabled includes dwellings held by certain trusts. The bill also provides that if a locality establishes income restrictions for the exemption, then the locality shall exclude (i) the income of relatives who live in the dwelling and who provide caregiving services, whether or not they are compensated, and (ii) the income of nonrelative caregivers living in the home, whether or not they are compensated.
Patron – Minchew
HB1239 Real and personal property tax exemption; solar energy equipment, facilities, or devices. Exempts from real and personal property tax those business-owned or business-operated solar energy equipment, facilities or devices that collect, generate, transfer or store thermal or electric energy. This bill is identical to SB 418.
Patron – Hugo
SB68 Real estate with delinquent taxes. Changes, under certain circumstances, the criteria for transferring certain tax-delinquent real property to localities through a special commissioner in the cities of Norfolk, Richmond, Hopewell, Newport News, Petersburg, Lynchburg and Hampton. It reduces the percentage of taxes and liens from more than 35 percent, to 20 percent, and of taxes alone from 15 percent, to 10 percent, respectively. It includes parcels with assessed individual values of $100,000 or less. The reduced criteria apply only if the locality enters into an agreement to sell the property to a nonprofit entity to renovate or construct housing to be sold to a low-income person.
Patron – Marsh
SB653 Renewable energy property grants. Establishes, beginning with fiscal year 2016, grants for placing into service renewable-energy property. The grant would equal 35 percent of the costs paid or incurred to place the renewable-energy property into service, not to exceed $2.5 million for any individual piece of renewable-energy property. The bill provides that grants in excess of 2.5 percent of the total program appropriation for the relevant fiscal year would be paid in three equal calendar-year installments. No grant would be awarded for renewable-energy property that generated electricity within the 12 months preceding the date of the grant application or renewable-energy property purchased with utility ratepayer funds. The bill’s definition of renewable energy includes energy derived from sunlight, wind, falling water, biomass, waste, landfill gas, municipal solid waste, wave motion, tides or geothermal power, but does not include energy derived from coal, oil, natural gas or nuclear power. The Department of Mines, Minerals and Energy would administer the grant program. The department would be authorized, subject to appropriation, to award up to $10 million in renewable-energy property grants for fiscal year 2016. The act contains a second enactment that requires the act to be reenacted in the 2015 General Assembly in order to become effective.
Patron – Norment
SB222 Solar panels in community associations. Clarifies a community association's authority to prohibit or restrict the installation of solar power devices. The measure bars a community association from prohibiting a property owner from installing a solar-energy collection device on the owner's property unless the community association's recorded declaration establishes such a prohibition.
Patron – Petersen