2013 VAR Legislative Agenda becomes New Laws on July 1
VAR’s Capitol Connections is your video resource to all VAR’s legislative advocacy work. From short weekly video updates during the General Assembly session to the annual New Laws update, we’ve got you covered.
The 2013 session of the General Assembly was dominated by transportation — the bill that finally passed will, hopefully, provide much-needed funds for areas of the commonwealth where roads and public transit options need the most work. VAR spent a good deal of effort on that bill, working with legislators and the governor’s office to ensure that Virginia’s transportation needs were addressed, while not unduly burdening homeowners with the cost of the current and future projects we need. The state’s aging transportation infrastructure has already been having an effect on businesses, and it was clear more money was needed — and that everyone would benefit from the improvements.
VAR members put this legislation at the top of the list with more than 3,500 “call to action” responses and more than 500 Realtors contacting their legislators as part of the Day on the Hill. Participation counts and VAR members made a big difference in getting the transportation legislation passed.
The final bill signed by Governor McDonnell isn’t perfect — but no legislation this complex (and affecting so many) will be. But we’re confident it’s a major step forward.
While transportation got the most airtime, VAR also passed a number of other bills involving the business of real estate. Some of them will have a significant impact, while others are more technical. All are designed to make Virginia’s Realtors’ jobs a little easier.
REALTORS® are shielded from liability if a public record is inaccurate. (HB 2073)
Realtors and brokers were being sued because of incorrect information in MLS listings — even when that information came from public records. Because Realtors frequently rely on government records, client disclosures, or information from other professionals — such as surveyors or engineers — when they advertise properties, these kinds of suits would turn ordinary property transactions into research, insurance, and litigation nightmares. We were able to pass an immunity law for Realtors. It says, essentially, that Realtors and brokers cannot be held liable for incorrect information they obtain from a reputable source in a civil lawsuit or in a regulatory proceeding at the Real Estate Board. Companies will still want their agents to double check data, and it is important to remember that an agent can still be held liable if they are grossly negligent or act in reckless disregard of the truth.
Introduced by Del. David Yancey
You must disclose if a home was once a meth lab (HB 1593)
Once a house is used to manufacture illegal methamphetamines, it’s currently an uncertain and difficult path to make it safe again. Starting July 1, 2014, you must disclose to any potential buyers if the seller has actual knowledge that a home was once used to create meth, unless the home has been cleaned to Virginia Department of Health guidelines. (This is similar to the law requiring disclosure of Chinese drywall.) The Health Department guidelines won’t become final until 2014, which is why there is a delayed effective date.
Introduced by Del. David Bulova
“Overcrowded” is now clearly defined (SB 841)
Real estate agents need to know about the potential for conflict in two sets of requirements for the number of people who can live in a rental house. HUD has a “two persons per bedroom” in many situations (but not all) as a maximum occupancy standard. If you violate the HUD standard, you may be violating the fair housing laws. The Virginia Uniform Statewide Building Code contains a minimum occupancy standard which requires at least 50 square feet per person per bedroom. Real estate agents need to measure the square footage of bedrooms in rental housing to make sure you comply with the building code standards. This legislation frames these two sets of requirements in state law.
Introduced by Sen. Mamie Locke
POA & Condo Disclosure Packets must include what secondary mortgage market project approvals are currently in effect (HB 1807)
With so many buyers relying on FHA financing, it’s important to know whether a seller is able to accept it. That’s a huge issue with condos, because each complex has to be “certified” by FHA before the government will back a loan. FHA has specific guidelines for that certification; one important factor is the number of owner-occupied units. If potential buyers knew up front whether a particular complex met that FHA requirement, it could save a lot of trouble — why bother making an offer if you know you can’t get FHA financing because there are too many rental units? Unfortunately, not every condo complex would provide that information, so buyers and their Realtors would often have to get deep into the transaction before learning whether financing was even available. That will change on July 1, 2013, when that information —
the number of owner-occupied vs. rental units in a complex — must be disclosed with the standard POA/condo packet given to prospective buyers. Seeing the right ratio won’t guarantee that FHA will approve a loan, but it will at least let Realtors know if they can save themselves and their clients some time and hassle.
We said that those associations must disclose the number of owner-occupied vs. rental units in a complex, in order to help potential buyers know whether FHA funding might be available.
As passed, though, the law is more straightforward. The packet must disclose whether any secondary mortgage market agencies (e.g., the FHA) have approved the complex for funding.
In other words (and in practical terms) associations must disclose whether FHA has said that the complex meets its requirements so buyers can use FHA loans to purchase units there.
Introduced by Del. Jackson Miller
All fair housing cases involving Realtors will be heard by the Real Estate Board (HB 1480)
Fair-housing cases against non-real estate licensees are heard by the Fair Housing Board. Fair housing cases against real estate licensees are heard by the Virginia Real Estate Board. Because a growing number of fair housing cases are filed against the real estate agent and the non-licensee property owner, the same case could be heard by both boards. The new law gives the REB jurisdiction in all cases where one of the cases involves a licensed real estate agent.
Introduced by Del. Peter Farrell
Electronic payments are treated like other payments (HB 1509)
More and more landlords and property managers are beginning to accept electronic payments from tenants. The new law says that if a tenant fails to make an electronic payment on the designated date, the landlord can pursue civil action as if it had been a bad check. This allows the landlord to recover a civil penalty in most cases of $250, costs of court, and attorney’s fees.
Introduced by Del. Greg Habeeb
Commercial appraisal management companies are regulated just like residential ones (HB 2222)
Residential appraisal management companies are regulated by the Virginia Real Estate Appraiser Board, but there was a question about commercial AMCs… until now. Starting July 1, 2013, the REAB’s authority clearly covers regulation of commercial AMCs.
Introduced by Del. Gordon Helsel
Virginia Residential Landlord Tenant Act [VRLTA] (HB 1734)
This legislation makes some significant changes to the VRLTA, including authority for:
- landlords to have lease provisions for an early termination of the lease;
- real estate licensees to go to court and get judgment and possession against a tenant who appears in court;
- landlords or property managers to pay an abandoned security deposit to the Virginia Tax Department at the end of one year instead of having to hold that deposit in your real estate escrow account for seven years;
- and a bunch of other good stuff.
Introduced by Del. Manoli Loupassi
Some issues with the handling of renters’ escrow funds are fixed (HB 1736)
This new law clearly sets forth how escrow funds must be handled by real estate licensees. Most funds must be placed in the real estate escrow account within five business days of receipt. The legislation makes it clear that an application deposit must be deposited in the real estate escrow account within five business days of the approval of the tenant’s rental application.
Introduced by Del. Peter Farrell
Historic transportation legislation is passed with Realtor support (HB 2313)
The Virginia Association of REALTORS® thanks Governor McDonnell and the members of the General Assembly for working together to pass a sustainable transportation funding plan, resulting in HB 2313.
“We know the importance of an adequate, efficient transportation network. It enhances the quality of life in cities and towns across the Commonwealth. Transportation impacts everyone: parents getting children to school, businesses aiming to attract customers, first responders and law enforcement responding to emergencies, and commuters on their way to work,” says Mary Dykstra, President of the Virginia Association of REALTORS®.
This transportation bill is not perfect, but a result of compromise and working together for the greater good. You can read the full story on the 2013 transportation bill here, including details on the regional plans.
To see additional resources for brokers and local association Government Affairs Directors, please visit: www.VARealtor.com/NewLaws.