2014 Agenda Includes First-time Homebuyer Savings Accounts, Vested Property Rights and More

Over the past year, your state and local Realtor® associations have developed a slate of legislation to address issues arising in your businesses. The following are measures that we will work to pass for you in the 2014 General Assembly Session:

• First-Time Homebuyers Savings Account – Saving for a down-payment and closing costs is one of the most difficult hurdles for first-time homebuyers. To aid this process, Realtors® are urging the creation of first-time homebuyers savings accounts to be used for real estate transaction costs. Such accounts would be held at a participating financial institution and may contain cash or other investments. Account holders may contribute post-tax dollars and withdraw the principle and any interest earned on a tax-free basis. Funds withdrawn for any other purpose would be subject to a penalty and income taxes.

• Prohibiting Claims of Criminal False Advertising – When Realtors® are accused by their clients of false advertising, those Realtors® could be charged with both criminal and civil violations. During civil lawsuits, Virginia attorneys have been claiming that Realtors® are guilty of criminal false advertising, even if the Realtor® defendant has not been convicted of that criminal charge. This legislation would require any attorney making such a claim in a civil case to pay the legal fees of the Realtor®, unless that Realtor® has actually been convicted of criminal false advertising.

• Condos and POAs – This legislation clarifies several provisions related to fees charged by Condo and Property Owners’ Associations. First, associations may not charge separate inspection fees for unimproved lots, except for those already outlined in the Code. They also may not charge for website access for sellers to request the resale disclosure packet. The choice of electronic packet delivery is at the option of the seller, and up to five electronic copies of the disclosure packet shall be delivered for the same fee. If the resale packet is delivered using a commercial mail delivery service, the right of cancellation is set at three days following delivery. Finally, the association may not recover resale packet preparation costs after settlement occurs.

• Vested Property Rights – In several Virginia localities, zoning officials identified existing structures that were no longer compliant with current zoning codes, and required homeowners to remove those structures from the property. Those structures were built before modern zoning regulations, or were built with permits that could no longer be located in official records. In 2008, Realtors® passed sweeping protections for these property owners, known as vested rights. This bill clarifies vested rights protections, stating that so long as the homeowner has been paying taxes on the property for the past 15 years, the structure is deemed legal but non-conforming. When repairing or replacing a vested rights structure, the homeowner may be asked to bring the structure up to current code, but cannot be forced to remove it from the property. 

• Appraisal Management Companies (AMCs) – This bill clarifies that the Commonwealth is required to regulate AMCs. That regulation will include initial licensure and background checks beginning in 2014. There will also be a bond requirement of $100,000, to ensure the availability of sufficient funds to pay fees owed to individual appraisers by AMCs that go out of business.

• Landlord-Tenant: Security Deposits; VRLTA and VLTA Distinctions – Under the current Code, owners of more than four rental properties in urban areas, or 10 properties statewide, fall under the Virginia Residential Landlord Tenant Act (VRLTA). Individuals with fewer rentals may choose to adhere to the Virginia Landlord-Tenant Act (VLTA). This legislation would lower the number of properties that trigger coverage under the VRTLA to two rental properties (in addition to a principal residence). 

This bill will also conform the VRLTA to the VLTA to eliminate the payment of interest on security deposits. Any previously earned interest on leases prior to 2009 may be paid out to the tenants. Landlords may charge an administrative fee for expedited return of the security deposits at lease termination. If no forwarding address is given, the landlord may dispose of the security deposit (allowing it to revert to the Commonwealth), regardless of the number of the tenants on the lease, in one year and 45 days following lease termination.

In addition to this bill, Realtors® will work with other stakeholders to enact legislation related to property management.

NVAR will keep you up-to-date on the progress of these and other measures throughout the 2014 session on nvar.com and in NVAR’s Town Hall Notes e-newsletter. You can also lobby for these bills in-person during the NVAR Legislative Trip to Richmond on January 30. See the announcement on this page for additional information.