Mortgage Debt Tax Relief Extended
As the 2014 session of Congress expired, the Senate passed H.R. 5771, the Tax Increase Prevention Act of 2014, by a vote of 76-16.
The bill includes a one-year extension of several expired tax provisions that benefit REALTORS and their clients, including tax relief for mortgage debt forgiveness. The relief is effective retroactive to January 1, 2014, but expires again on December 31, 2014. Also included in the bill are one-year retroactive extensions of the 15-year depreciation schedule for leasehold improvements, the deduction of mortgage insurance premiums, and the deduction for energy efficient commercial buildings.
The House passed the bill on December 3. It now goes to the President, who is expected to sign it into law.
To read more about the proposal and NAR’s advocacy on the issue, click here.
Working for Realtors® in Richmond
State and local Realtor® associations worked throughout 2014 to develop a 2015 Virginia legislative agenda. This collaborative effort has produced a slate of issues aimed at protecting your businesses and the real estate industry. The following issues are measures that the NVAR and VAR Government Affairs staff will work to pass for you in the 2015 General Assembly Session:
Buyer Awareness of Storm water Maintenance Agreements
Increasingly, local governments are entering into maintenance agreements with landowners that may require the landowner to maintain a “storm water facility” on the property. We have consistently advised buyers to identify the existence of these “facilities” on their property, but have not recommended that they ask whether a formal maintenance agreement with the locality exists.
We believe it is in the buyer’s best interest to determine whether or not there is such an agreement in place.
To ensure that buyers and buyers’ agents know what to ask, we will propose amending the “buyer-beware” disclosure form to include the existence of a storm water maintenance agreement.
Property Manager Representation of Clients in Court
There are several judges in Virginia who maintain that because “family trusts” are not specifically spelled out in the Virginia Landlord Tenant Act, property managers cannot appear in court on behalf of their clients. This requires that the owner appear in person or hire an attorney.
Family trusts should be treated like LLC’s, incorporations and other entities for which the Code allows non-lawyer property managers to represent their clients in General District Court.
To ensure that property managers can continue to represent their clients in court, we will propose amending the VRLTA to add “family trusts.”
Recovery of Funds Owed to Consumers
Currently, when a licensee is found in violation of a Real Estate Board regulation and the consumer is owed money as a result, the consumer must petition the General District Court for a judgment. The judgment must state the offense and include other specific language. Many judges and most consumers do not understand these requirements. As a result of noncompliance with these technical requirements, the Real Estate Board often cannot award the funds.
Your lobbyists in Richmond will propose amending the Code of Virginia to allow consumers to recover funds from the Real Estate Transaction Recovery Fund after a general judgment against a convicted licensee.
Further Clarification of the Property Owners' Association and Condominium Acts
Realtors® and their clients continue to have issues with POAs and COAs. To address these concerns, we will propose amending the Code to:
* Further limit fees being charged against owners
* Limit fees and other requirements that are being assessed against owners who rent their property
* Limit the ability of POAs to submit invoices and attach liens on new property owners after settlement
* Address concerns regarding the posting of disclosure packages online, and require POAs that charge potential buyers a fee to access their disclosure packages online to keep them posted longer than 30 days.
Buyer Awareness of Need for Flood Insurance
Buyers, particularly in coastal regions of Virginia, must be able to identify whether properties will need additional flood insurance because they are located in a FEMA-determined flood zone.
Currently, a flood certification is performed by the lender on every property, regardless of its location. This certification is used as part of the loan underwriting process and also to ensure that appropriate insurance coverage is applied.
We believe that the flood certification process could be used to educate potential buyers before contracts are ratified.
Flood certifications are performed by third-party providers at a cost of $50 - $100. A list of providers is available on the FEMA website.
We will propose amending the Code to add language to the “buyer-beware” list of disclosures, recommending that the purchaser obtain a flood certification report on the property.
Landlord and Property Owner Freedom From Delinquent Water Fee Burden
VAR helped to pass a bill several years ago that prohibited a water authority from attaching a lien or otherwise requiring landlords or property owners to pay their tenants’ delinquent water bills before reinstating services. Unfortunately, the General Assembly neglected to change one Code section.
To fix this oversight, we will pursue amendments to all Code sections that deal with water authorities to prohibit those authorities from requiring landlords or property owners to pay delinquent water fees incurred by tenants.
Proposed Felony Charges for Crimes Against Realtors ®
There have been several high-profile cases in recent months in which Realtors® have been lured into vacant houses and assaulted, abducted…or worse. In each instance, the victim was lured into the property through contact from a potential “client” who wanted to view the property.
VAR is seeking legislation to add a separate felony charge for individuals who knowingly lure Realtors® into these circumstances.
We want to ensure that there are laws in place that will permit prosecutors to bring charges, and for judges and juries to levy convictions that match the severity of the crime.