New Laws Taking Effect July 1st

The 2011 Session of the General Assembly produced many changes in Virginia Law. Most of these changes will take effect on July 1st. VAR’s Legislative Team was able to secure many changes during this year’s General Assembly session, such as: Virginia Residential Property Disclosure Act Changes Electronic Real Estate Records Civil Immunity from Inaccurate Information POA and Condo Amendments Virginia Residential Property Disclosure Act Changes: Beginning in July, the current list of disclosures/disclaimers on the form will move to a website maintained by the Real Estate Board – thus eliminating the risk of using an out-of-date form. The form will direct the purchaser to visit and view that website. Electronic Real Estate Records: Legislation was adopted making it absolutely clear that licensees may maintain their records in electronic form rather than having to retain all-paper copies, in accordance with the Uniform Electronic Transactions Act. Civic Immunity from Inaccurate Information: Effective July 1st, a licensee shall not be liable for false information, if the information was received from a client, from public records, or from reliance on the representations of another regulated professional. Actual knowledge of the falsehood or reckless disregard of the truth removes this immunity. POA and Condo Amendments: The provisional Common Interest Community manager license will be extended for one additional year. Associations may NOT charge fees regarding inspections and disclosure packages that are not expressly set out in the law. Also, an Association may collect its fees for a disclosure package if a sale has failed to close within 45 days. Professionally managed Associations are brought within the purview of the law, even if otherwise exempt. Private Transfer Fees Banned: Some developers have created a transfer fee, usually buried in the documents creating a project and customarily 1% of the purchase price, which is collected and paid to the developer each time the property is sold over the next 99 years. Such fees will be unenforceable in Virginia after July 1st. However, fees charged by and payable to homeowner associations, condominiums and cooperatives may continue to be collected. Required Disclosure of Defective “Chinese” Drywall: Disclosure is required in both sales and leasing transactions and to all configurations of owners, sellers, buyers, tenants and potential tenants. Disclosure is also required of REO and foreclosed property holders. Owners of property containing this drywall may apply to the local government to have the property reassessed to show its diminished value. Several legislative changes will go into effect at later dates Burden of Proof in Assessment Appeals: In tax years starting on and after January 1, 2012, there will be very clear requirements as to what the assessor must provide to taxpayers when property is reassessed. In an appeal, both to the Board of Equalization or to Circuit Court, the burden of proof for the taxpayer to prove his case will be lowered from a “clear and convincing” standard to a “preponderance of the evidence” standard. Changes to Real Estate Agency Law: Many core provisions of Virginia’s Real Estate Agency law were amended this year, with changes taking effect in July, 2012. A 3-hour Continuing Education course will be developed to cover the changes in the basic brokerage and agency laws, and must be taken in the next license renewal cycle, beginning July 1, 2012. Special thanks to VAR’s Vice President of Law and Policy, Jay DeBoer, and the other members of VAR’s Legislative Team for their efforts to advocate on behalf of Virginia’s REALTORS® and homeowners.