General Assembly Defines Real Estate Teams and Clarifies Broker Supervision and Education

THE VIRGINIA GENERAL ASSEMBLY has passed legislation affecting Realtors® and their clients during the 2018 legislative session, including those introduced as part of the 2018 Realtor® Legislative Agenda.

All measures summarized below were signed into law by Governor Ralph Northam (D), and unless otherwise noted, take effect July 1, 2018. Please visit NVAR.com/NewLaws for additional bills and more detailed information about new laws impacting the industry.

REALTOR® BILLS

REAL ESTATE TEAMS DEFINITION;
REQUIRED TO OBTAIN BUSINESS ENTITY
LICENSE (HB 862-PEACE; SB 758-STURTEVANT)
(Takes effect January 1, 2019.)

Clarifies that all Real Estate Teams must obtain a business entity salesperson license. The requirement to obtain a business entity license already exists in state law; this is simply a clarification to ensure that teams are obtaining the appropriate licenses. 

The bill 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.” Note that this means individual licensees with unlicensed assistants who identify as a team are included in this definition. 

Requires any principal broker maintaining more than one place of business to obtain a branch office license for each place of business maintained. The law also codifies a definition for supervising brokers and clarifies that Real Estate Teams are to be supervised by supervising brokers, to include providing guidance of advertising and marketing materials of any affiliated Real Estate Teams.

Requires brokerage agreements (buyer’s and seller’s agreements) to include the name and contact information of the supervising broker.

TRANSLATION OF REAL ESTATE DOCUMENTS (HB 439-BULOVA; SB 528-MASON)

Allows a real estate licensee to assist a party to a real estate transaction in obtaining a translator or an electronic translation service to translate a contract or other real estate document from English to another language. The bill provides that the licensee cannot charge a fee for this assistance and relieves the licensee of any liability for any inaccuracies in the translation.

REAL ESTATE LICENSEES; BROKER EDUCATION; POST-LICENSE CE; EARNEST MONEY DEPOSITS; AND OTHER TECHNICAL CHANGES (HB 864-INGRAM; SB 514-SUETTERLEIN)

(The provisions of the bill amending curriculum and education requirements take effect January 1, 2019; all other provisions take effect July 1, 2018.) Stipulates that two hours of the existing eight hours of broker continuing education relating to supervision and management must include an overview of the broker supervision requirements under the Code of Virginia and the Real Estate Board Regulations. The bill also adds real estate- related finance to the existing curriculum for post-licensure education. It clarifies that the 30-hour post-licensure education requirement must be completed within one year from the last day of the month in which the initial license was issued. Provides that when a transaction is not consummated, the principal broker or supervising broker has the option of holding an earnest money deposit in escrow until (i) all principals to the transaction have agreed to their disposition in writing; (ii) a court orders the disbursement of the funds; (iii) the funds are successfully interpleaded; OR (iv) the broker releases the funds to the party in the transaction who is entitled to receive them in accordance with the clear and explicit terms of the contract. The broker also has the option to send written notice of the intent to disburse funds with a 15-day “protest period” for one of the parties to object in writing. 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.  Makes various technical edits to sections of the Real Estate Licensing Law.

COMMON INTEREST COMMUNITY BOARD; SUMMARY OF CONDO CERTIFICATES AND PROPERTY OWNERS ASSOCIATIONS PACKETS (HB 923-BULOVA) 

Requires all Common Interest Communities (Condo and Property Owner Associations) to provide a short summary on a form, developed by the Common Interest Community Board, of important information contained in the resale certificate or disclosure packet, delivered at the same time as the Resale Certificate or Disclosure Packet. This form will list the types of items that may affect a prospective purchaser’s decision, including the following:
•    Obligations to pay annual dues or special assessments
•    Penalties for failure or refusal to pay assessments
•    Purposes for which assessments may be used
•    The importance of the declaration, condo instruments and other governing documents
•    Rental limitations or restrictions
•    Parking or storage restrictions on motor vehicles and boats
•    Pet restrictions
•    Architectural guidelines and restrictions
•    Limitations on the operation of home businesses
•    Length of declarant control
•    That the purchase contract is a legally binding document

LANDLORD’S ACCEPTANCE OF RENT WITH RESERVATION (HB 855-PEACE; SB 197-LOCKE)

Provides that a landlord may accept full or partial payment of rent and receive an order of possession from a court pursuant to an unlawful detainer action, then proceed with eviction. The landlord must have stated in a written notice to the tenant that any amounts owed to the landlord by the tenant would be accepted with reservation and would not constitute a waiver of the landlord’s right to evict the tenant. This notice may be included in the termination notice given by the landlord to the tenants, and there is no requirement for the landlord to give the tenant a subsequent written notice. The purpose of this legislation is to clarify the rent with reservation process by removing the requirement for a second notice for the time period between entry of an order of possession and prior to eviction.

UNLAWFUL DETAINER IN FORECLOSURE; CLARIFICATION OF SUPREME COURT CASE (HB 311-SIMON)

This legislation is intended to prevent the derailment of unlawful detainer cases, based on an assertion of insufficiency of legal title to real property, made by a tenant or other occupant. Provides that if, on the date of a foreclosure sale of a single-family home, the former owner remains in possession of the dwelling, such former owner becomes a tenant at sufferance. This tenancy may be terminated by a written notice from the successor owner with at least a three- day notice. After the three-day period, the successor owner may file an unlawful detainer.

OTHER BILLS OF INTEREST

LOCAL GOVERNMENT AUTHORITY TO REQUIRE ABATEMENT OF CRIMINAL BLIGHT ON PROPERTY (HB 594-CARR; SB 451-DANCE)

Authorizes local governments to enact ordinances requiring corrective action to address “criminal” blight conditions.

RENTAL PROPERTY; INSTALLATION AND MAINTENANCE OF SMOKE AND CARBON MONOXIDE ALARMS (HB 609-CARR; SB 391-BARKER)

Allows localities to require a landlord to install smoke alarms and certify that the alarms have been inspected and maintained. Also requires a landlord to install a carbon monoxide alarm upon request by a tenant. Prohibits a tenant from tampering or removing batteries of smoke and carbon monoxide alarms. Reasonable accommodations must be made for persons who are deaf or hearing impaired, upon request.

FORECLOSURE; NOTICE OF SALE WHEN OWNER IS DECEASED (HB 755-LEFTWICH; SB 422-CHAFIN)

Provides that when the owner of a property to be sold by a trustee is deceased, the notice of the sale shall be delivered to the last known address of the deceased owner, any personal representative of the deceased’s estate, and any heirs of the deceased as recorded in the land records where the property is located.

ZONING; MODIFICATIONS FOR DISABILITIES (HB 796-HOPE)

Requires a locality to consider the need for reasonable modifications in accordance with the Americans with Disabilities Act or state and federal fair housing laws when preparing a zoning ordinance. Requires variances to the zoning ordinance to be granted if a reasonable modification to a property will alleviate a hardship as requested by a person with a disability. States that the variance granted may expire when the person benefited by it is no longer in need of the modification.

UNLAWFUL DETAINER; EXECUTION OF WRIT OF POSSESSION (HB 856-PEACE)

Permits a judge to issue a writ of possession immediately upon entry of judgment in an unlawful detainer case. Requires the sheriff to serve notice of the writ, including the date and time of eviction, on the defendant at least 72 hours prior to execution of the writ.

VIRGINIA RESIDENTIAL LANDLORD AND TENANT ACT (HB 857-PEACE)

Removes all remaining differences between general landlord and tenant provisions and the Virginia Residential Landlord and Tenant Act. Also makes the following changes: (a) clarifies the lease termination process; (b) provides that if a tenant allows renter’s insurance to lapse, the landlord may provide coverage and require the tenant to pay the premium; (c) establishes protection for landlords who provide tenant information to a federal census official; (d) authorizes a landlord or property manager to appear in court to seek final rent and damages related to a dwelling unit; and (e) clarifies remedies for a tenant’s failure to prepare the dwelling unit for insecticide or pesticide applications.

ONSITE SEWAGE SYSTEMS; MAINTENANCE (HB 887-ORROCK)

Provides that the adjustment or replacement of sewer lines, conveyance lines, distribution boxes, or header lines is considered maintenance of an onsite sewage system and thus does not require a permit.

COMMON INTEREST COMMUNITIES; DISCLOSURE PACKETS; FEES (HB 1031-WATTS)

Allows a POA that is not professionally managed to charge fees in line with professionally managed POAs for (i) expediting the inspection, preparation, and delivery of the disclosure packet; (ii) providing an additional hard copy of the disclosure packet; and (iii) providing third- party commercial delivery service, as long as the association provides the disclosure packet electronically if requested and complies with the other requirements of professionally managed POAs.

LANDLORD AND TENANT LAW; TRANSIENT LODGING AS PRIMARY RESIDENCE; SELF-HELP EVICTION (HB 1227-HAYES; SB 286-SPRUILL)

Clarifies that the availability of the use of self-help eviction for transient lodging (fewer than 90 consecutive days) shall not preclude an owner from pursuing civil or criminal remedies under the laws of the Commonwealth.

VESTED RIGHTS; OWNERS NOT REQUIRED TO RETROFIT EXISTING LANDSCAPE COVER MATERIALS (HB 1595-WILT; SB 972-OBENSHAIN)

Provides that a property owner who has an occupancy permit issued as of January 1, 2018, is not required to retrofit existing landscape cover materials (i.e. mulch). Allows the owner to continue to use, supplement, or refurbish existing landscape cover materials at such property.

View more at NVAR.com/newlaws.