New Laws 2023 – What You Need to Know for July 1
During the 2023 General Assembly Session your lobbying team from NVAR and the Virginia Realtors® along with your Public Policy Committees stayed extremely busy and proactive to be the voice of real estate in Richmond. The Statewide Realtor® Agenda passed with unanimous support with a total final passage of 1,415 “yes” votes and 0 no “votes”! We did have one bill continued to study, but stay tuned for more action on Short-Term Rentals in the future.
Your Government Affairs team examined every piece of legislation (that’s 2,863 bills and resolutions!) to determine if it impacted you, your clients, and/or your business. Out of those, the Virginia REALTORS® Public Policy Committee (PPC) acted on 153 pieces of legislation and took a position to support, amend, oppose, or monitor each of those bills.
The following legislation are those bills we have selected as having an impact on your business. Each of these new laws is effective July 1, 2023 unless otherwise noted.
If you want to read the full text of the legislation, the bill number provided is a hyperlink to the text of the bill as it is enacted into law.
REALTOR® Bills:
The new “Resale Disclosure Act” takes current disclosure language out of the POA, Condo, and Cooperative Acts and consolidates them within a new chapter entitled the Resale Disclosure Act and uses one term, “Resale Certificate,” for the disclosure information required to go from an association to a buyer when a property is sold. The new law sets forth requirements for contract disclosures, formatting and contents of the resale certificate, applicable fees, termination rights, and liability. The Common Interest Community Board (CICB) will create a standardized resale certificate form and format. Now, the resale certificate will be consistent across all associations and property types, and it should be easier for Realtors® and homebuyers to find specific information. This means that every resale certificate will have a coversheet that acts as a “Table of Contents” and the supporting documentation or information for that item will be attached in order. Additionally, all packet fees – including for ordering the resale certificate, expedite fees, and update fees – are due when the item is ordered and not at settlement.
These bills give the CIC Ombudsman more duties and powers over complaints made regarding community associations. Now, if the Ombudsman receives notices of final adverse decisions, they can either refer the decision to the CICB for further review to determine whether the decision is in conflict with existing laws or regulations, or they can make a determination themselves and notify the complainant of the determination. If, within 365 days of issuing a determination, the Ombudsman receives a subsequent complaint for the same violation, the Ombudsman must refer the matter to the CICB.
Return of Security Deposits; Post Lease Repairs (HB 1542 / SB 891)
Under the VRLTA, a landlord has 45 days after the termination of a lease to return the security deposit, minus any damages, to the tenant. If damages to the premises exceed the security deposit and require a contractor, the landlord notifies the tenant and has an additional 15 days to provide an itemization of the damages and cost of repair. Since the pandemic, landlords are reportedly having significant difficulty meeting this deadline due to labor shortages and supply chain delays. These bills extend that additional 15 days to 30 days. This is a temporary change with a one-year “sunset.” The 30 days to provide an itemization of the damages and the cost of repairs will revert back to 15 days on June 30, 2024.
Common Interest Communities
Any Common Interest Community Management Contracts that include an automatic renewal provision may be terminated by the association or the CIC manager at any time, without cause, with at least 60 days’ notice, even if such a provision is not included in the contract.
Local Stormwater Management Funds for Condominiums (SB 1091)
Expands the allowable uses of grants from a local Stormwater Management Fund, established under current law to grant funds to private property owners and common interest communities for certain stormwater management and erosion control projects, to include joint flooding mitigation projects of condominium owners.
Licensing and Professionalism-Related Bills:
These two bills are general reciprocity bills for DPOR regulated industries. If someone is licensed or certified in another jurisdiction and applies for a similar license in Virginia, DPOR must recognize the license or certification and grant a Virginia license if certain requirements are met. The applicant must:
Have a current, valid license in a similar scope of practice;
Have held the license for at least 3 years;
Have passed an exam and met certain standards related to education, training, or experience;
Not have any pending or unresolved complaints and is in good standing;
Not have a disqualifying criminal record;
Not have been disciplined, except if the discipline was only a fine and no harm to the health or economic wellbeing of the public was involved; and
Pay the applicable fees.
Note that DPOR is allowed to require a Virginia specific exam if such exam is required of other applicants.
If another state does not have a professional or occupational license or government certification to regulate a profession but Virginia does, DPOR must recognize the experience of the individual from their time in the other state with similar requirements to individuals who are licensed or certified by their jurisdiction.
Currently, applicants for an appraiser license must obtain experience in the field of real estate appraisals under a licensed or certified appraiser prior to being granted a license. This bill requires the Real Estate Appraiser Board to accept the Certified Residential Practical Applications of Real Estate Appraisal (“PAREA”) or Licensed Residential PAREA experience training program approved by the Appraiser Qualifications Board to satisfy the experience requirements. Applicants who have completed the Licensed Residential PAREA program receive the equivalent of 1,000 hours of experience. Applicants who have completed the Certified PAREA program receive the equivalent of 1,500 hours of experience.
Virginia Consumer Protection Act (SB 988)
This bill exempts residential property sales between individuals involving the seller’s private residence from the requirements of the Virginia Consumer Protection Act (“VCPA”). Note that real estate licensees are already exempt from the VCPA. This means that if you are representing a buyer in a FSBO, the seller’s actions will no longer be covered by the VCPA.
Mortgage Lending and Brokerage Remote Work (HB 2389)
Defines "office" and "remote location," as those terms apply to the licensing of mortgage lenders and mortgage brokers, and permits licensees to allow employees and exclusive agents to work from a remote location. The bill allows such an employee or exclusive agent to work at a remote location only if certain requirements are met, including the establishment of written policies and procedures for remote work supervision; compliance with security plans and federal and state security requirements; the employment of appropriate risk-based monitoring and oversight processes; agreement of the employee or exclusive agent to comply with established practices; the proper maintenance of physical records; access of the licensee's secure systems via a virtual private network with password protection; the installation and maintenance of security updates; and the designation of the principal place of business as the mortgage loan originator's registered location for the purposes of the Nationwide Mortgage Licensing System and Registry record.
Settlements
This bill allows a settlement agent to release judgement liens on property in certain circumstances. Essentially, if the settlement agent attempts to obtain payoff information and is unable to, there is now a process for releasing a judgment lien when the lien creditor cannot be located or does not provide payoff information. This only applies to judgments of less than $25,000 as of the date of the award, and it only covers judgment liens older than three years.
Settlement Fees, informed consent (HB 1888)
This bill adds language to the Virginia Real Estate Settlement Act in the Choice of Settlement Agent and Disclosure sections. The new language reads “The settlement agent may not collect any fees from a represented seller payable to the settlement agent or its subsidiaries, affiliates, or subcontractors without first obtaining the written consent of the seller’s counsel.” This means that if the seller has hired an attorney to represent them in the transaction, they cannot be charged any fees by the settlement agent without their attorney agreeing.
Taxes
Tax Exemption for Disabled Veterans or Surviving Spouse (HB 2414)
Currently, a disabled veteran or surviving spouse may claim a tax exemption on real property by applying with the locality once they have purchased a property. This bill allows the veteran or spouse to apply for the tax exemption prior to purchasing a qualifying dwelling by filing the required documentation along with documentation of the purchase agreement. Within 20 business days of receiving the application, the locality’s commissioner of the revenue must process the application and send the veteran or spouse a letter stating whether the application is approved or denied. If the application is approved, the letter must also include the amount of the tax exemption. Essentially, this bill allows a disabled veteran or surviving spouse to begin the application process while they are under contract, rather than having to wait until after settlement.
Delinquent tax lands; Maximum duration (HB 2110)
This bill updates the law regarding a taxpayer’s right of redemption between a landowner and a locality. Currently, the taxpayer can request a payment plan for a period not to exceed 60 months. The new law will allow that payment plan to be for a period not to exceed 72 months.
Landlord & Tenant Laws
This bill creates a mechanism for a tenant to terminate a lease and receive a refund of all rents and deposits paid if the property is uninhabitable at the beginning of the tenancy. If a condition exists at the beginning of the tenancy that constitutes a fire hazard or serious threat to the life, health, or safety of tenants or occupants, the tenant may terminate the lease by providing written notice to the landlord within seven days. The landlord then has 15 business days to either refund all monies paid by the tenant or provide written notice of his refusal to accept the tenant’s termination notice, along with the reasons for the refusal. If the landlord disputes the tenant’s termination, the tenant has the right to file in court for a determination of whether their termination was justified. “Serious threat to the life, health, or safety of tenants or occupants” include an infestation of rodents or a lack of heat, hot or cold running water, electricity, or adequate sewage disposal facilities.
Use of Assistance Animals in a Dwelling (HB 1725)
This bill makes it a violation of the Virginia Consumer Protection Act for a person with a therapeutic relationship with an individual to provide fraudulent supporting documentation of an individual’s disability or disability-related need for the assistance animal. The Virginia Consumer Protection Act allows any person who suffers a loss as the result of a violation to sue for actual damages, or $500, whichever is greater. If the violation is willful, the trier of fact can increase damages to three times actual damages or $1,000, whichever is greater.
Statement of Tenants Rights and Responsibilities Form (HB 1735)
This bill clarifies the requirements for providing the Statement of Tenants Rights & Responsibilities form.
If the tenant does not sign the form, the landlord must record the date that they provided the form to the tenant and the fact that the tenant failed to sign the form. This notation will now be sufficient to satisfy the requirements of the law and allow landlords to bring unlawful detainer actions if necessary.
Additionally, the bill states that after the effective date of the tenancy, the landlord may, but is not required to, provide a tenant with the form and allow the tenant to sign the form. This means that landlords do not have to provide tenants with a copy of the form at each lease renewal. Finally, the bill states that the form shall be current as of the date of delivery. This means that there is no obligation to provide a copy of the form to tenants each time it is updated or changed.
This bill requires any landlord who owns more than four rental dwelling units in Virginia, or more than a 10% interest in more than four dwelling units, to provide written notice to any tenant who has the option to renew a lease or has a lease that contains an automatic renewal provision of any increase in rent during the subsequent term. This notice must be given no less than 60 days prior to the end of the rental term.
Summons for Unlawful Detainer Instructions (HB 1996)
This bill requires the Virginia Supreme Court to create plain English instructions that explain to defendants how to interpret the Summons for Unlawful Detainer.
Employees of a Landlord, Rental Dwelling Unit Keys (HB2082)
Requires a landlord who owns more than 200 rental dwelling units that are attached to the same piece of real property to require any applicant for employment in any position that will have access to keys, defined in the bill, to each rental dwelling unit to be subject to a pre-employment criminal history records check. The bill also provides that a landlord must establish written policies and procedures for the (i) storage, issuance and return, and security of; (ii) access to; and (iii) if applicable, usage and deactivation of rental dwelling unit keys and electronic key codes. The provisions of the bill do not apply to a financial institution or a real estate licensee.
Zoning and Housing
These bills require that the Department of Housing and Community Development (“DHCD”) conduct a comprehensive statewide housing needs assessment survey every five years. This assessment must include a review of housing cost burden and instability, supply and demand for affordable rental housing, and supply and demand for affordable for-sale housing, as well as regional or local profiles that focus on specific housing needs of particular regions or localities. They also require DHCD to develop a statewide housing plan based on the comprehensive survey that will include measurable goals and be updated at least every five years to reflect changes in Virginia’s housing goals. Finally, localities with a population greater than 3,500 must submit annual reports to DHCD that summarize the adoption or amendment of any local policies, ordinances, or processes affecting the development and construction of housing during the preceding fiscal year.
Local Incentives for Urban Green Space (HB 1510)
Authorizes localities to establish programs to provide regulatory flexibility to encourage the preservation, restoration, or development of urban green space, defined in the bill. The regulatory flexibility may include (i) a reduction in permit fees or (ii) a streamlined process for the approval of permits.
Comprehensive Plan Strategies to Address Resilience (HB 1634 / SB 1187)
Encourages localities to consider strategies to address resilience in their comprehensive plans. As used in this bill, "resilience" means the capability to anticipate, prepare for, respond to, and recover from significant multi-hazard threats with minimum damage to social well-being, health, the economy, and the environment.
Development and Construction Fees Report (HB 1671)
Requires localities with a population greater than 3,500 to submit an annual report no later than March 1 to the Department of Housing and Community Development containing the total fee revenue collected by the locality over the preceding calendar year in connection with the processing, reviewing, and permitting of applications for residential land development and construction activities.
Community Development and Housing Projects Funding (HB 1805 / SB 1401)
Adds community development projects related to the production and preservation of housing, including housing for persons and families of low and moderate income, to those projects that the Virginia Resources Authority may finance. The bill directs the Department of Housing and Community Development to assist the Authority with determining which local governments are to receive grants from the Authority for such projects.
Transportation
Allocates 3.5 percent of the Commonwealth Mass Transit Fund to commuter rail systems jointly operated by the Northern Virginia Transportation Commission (NVTC) and the Potomac and Rappahannock Transportation Commission and excludes such commuter rail systems from receiving allocations pursuant to other distributions of the Fund. The bill requires such commuter rail systems to submit reports to the Commonwealth Transportation Board. The bill limits allocations by the NVTC for distribution to the Washington Metropolitan Area Transit Authority (WMATA) to 50 percent of the total operating and capital assistance required to be provided by NVTC or other Virginia entities in the approved WMATA budget and establishes reporting requirements for WMATA. The bill codifies requirements for WMATA to adopt and submit certain planning documents.
Authorizes the Governor to direct funds from the Transportation Partnership Opportunity Fund (Fund) to the Commonwealth Transportation Board for transportation projects determined to be necessary to support major economic development initiatives or to enhance the economic development opportunities of the Commonwealth's transportation programs when recommended by the Secretary of Transportation and Secretary of Commerce and Trade; these directed funds do not have a specified limit. The bill authorizes the use of grants, funds directed to the Board, and revolving loans for property acquisition and new or improved infrastructure to support economic development opportunities of the Commonwealth's transportation programs.