Updated June 17, 2024

On July 1, 2023, the new Virginia Resale Disclosure Act, Virginia Code §55.1-2307, et seq. (“RDA”) went into effect, combining the resale package provisions of the Virginia Property Owners’ Association Act (“POAA”) and the Virginia Condominium Act (“Condo Act”). With the updated RDA, the rules for delivery of the resale certificate, what the packet should contain, and the Buyer’s recission period will all be located in one, streamlined Act — serving as the go-to place to check for these regulations. On July 1, 2024, the RDA was again updated to add flexibility for parties to negotiate parts of the RDA in the sales contract directly. Read on to see how this impacts your practice!

Resale Disclosure Packet is now “Resale Certificate.”

Previously, the term “resale disclosure packet” referred to the stack of documents you received from homeowners associations (“HOAs”), while “resale certificate” was the preferred term for condominiums. The RDA now refers to both packages as the “resale certificate.” It’s a small change, but it’s part of the RDA’s effort to create the same process for all types of common interest communities. §55.1-2307.

More Agent Involvement in Delivery of the Resale Certificate

Just as before, the Seller is still required to obtain the resale certificate from the association and deliver it to the Buyer. This obligation cannot be waived or modified by the parties. Upon the Seller’s request (and payment of the fees, if applicable), the association has 14 days to deliver the resale certificate. Now, the agents have authority to step in: listing agents are allowed to obtain the certificate from the association and can deliver it to the Buyer’s agent if the parties wish. Delivery must be in accordance with the Seller’s request, so Realtors® should carefully review the request to the association to make sure the email addresses for the Buyer and the Buyer’s agent match with those written in the contract. Remember, if delivery is made only to the Buyer’s agent (and not the Buyer), the Seller may be able to argue this was valid delivery, so be sure to regularly check your email and have the resale certificate sent to your Buyer as soon as you get it!

Do Buyers Still Have the Right of Recission?

Short answer: Yes. §55.1-2312 gives the Buyer the right to cancel the contract within a timeframe as specified in a sales contract for the property. This is a new change for July 1, 2024. There is no longer any limitation as to the number of days for the recission period. The parties are now free to determine how many days the recission period can be, whether they choose 1 day or 100 days. This will be a negotiable term just like anything else in the sales contract. If the parties do not specify in the contract how long the recission period will be, then the timeframe defaults to 3 days.

Though the parties may agree to 0 days, the Northern Virginia Association of Realtors® (NVAR) does not recommend this practice. The recission period was created to explicitly protect Buyers by giving them an adequate opportunity to determine if the covenants of the association meet their needs as homeowners. Realtors® should not encourage their Buyers to waive or vary their statutory rights nor should they encourage their Sellers to pressure Buyers into waiving or negotiating them away. In the event a Buyer wishes to agree to 0 days and/or to waive their right of recission entirely, we recommend Realtors® provide Buyers with Form K1308, Buyer’s Acknowledgement of Potential Adverse Consequences.

Timelines for the Buyer’s Right of Recission.

Here’s when Buyers may void the contract pursuant to the RDA. These provisions may be modified by the parties by written agreement. The parties are free to fill in whatever number they agree to in the blanks:

1. If resale certificate is delivered before contract ratification:
• Within _______ days of ratification date. If left blank, within 3 days of the ratification date.
• Upon notice on or before the ratification date that the resale certificate is unavailable.
2. If resale certificate is delivered after contract ratification:
• Within ______ days of delivery. If left blank, within 3 days of delivery.
• Upon notice after ratification date that the resale certificate is unavailable.
3. At any time prior to settlement if the resale certificate is not delivered to the Buyer.
• Tip: Buyers have this protection no matter what number of days they agree to in the blanks above, even 0.

Remember that if the resale certificate is incomplete, the Buyer’s only remedy is to void. They can request an update, but this does not automatically extend the timelines above. Incomplete delivery still constitutes delivery!

NVAR Standard Forms Updates.

The following forms have been updated to reflect the new RDA:

1. K1321 – Residential Sales Contract & K1209 – Sales Contract for Unimproved Land.
• The changes were to the paragraph titled “Virginia Resale Disclosure Act.”
• Realtors® must use the checkboxes at the beginning of the paragraph indicating whether the property is located in an HOA or a Condo. Note that some properties can be located within both types of common interest communities, so check both if needed.
• Statutory timeframes for the recission period were removed in part (A) and replaced with blanks. Be sure to complete both blanks to reflect the agreement of the parties as to the length of time for the recission period. If nothing is entered, the timeframe defaults to 3 days.
• Realtors® will then use the blanks in part (B) to indicate where the resale certificate should be delivered. We always recommend including the information for both the Buyer and the Buyer’s agent!
2. K1389 – Extension of Review Period for Common Interest Community Resale Certificate Addendum.
• Tip: There is only one right of cancellation no matter how many common interest communities the property is subject to. For example, if the lot is located in Reston, it may be part of a Cluster and also the Master Reston Association. The recission period begins upon delivery of the second resale certificate, whichever it may be.
• Use this form if the parties agree to extend the period for the Buyer to review the resale certificate after delivery. This is especially helpful if the certificate is incomplete and needs a financial update from the association. 
• Reminder: “Common interest community” is an umbrella term for HOAs and condos.
3. K1390 – Understanding Your Rights Under the Resale Disclosure Act. 
• This is a great form for Realtors® to use when advising their clients of what they need to know about the resale certificate and buying a home in a common interest community. As a bonus, sharing this form with your clients also reduces your need to interpret the RDA for them.

Further Questions.

If you have any questions about the new RDA or navigating Realtor® duties with regard to common interest communities, please contact the nvar.com/legalhotline for further information.