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.
Civil Procedure/Remedies:
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
Conservation:
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 non¬profit 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,
ten¬ant 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 dis¬close 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, which¬ever 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
Taxation:
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 sun¬light, 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
Miscellaneous:
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
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