HB2011: Residential Property Disclosure Act; amends required residential property disclosure statement.
Be it enacted by the General Assembly of Virginia:
1. That §§ 55-517 through 55-522, and §§ 55-524 and 55-525 of the Code of Virginia are amended and reenacted as follows:
§ 55-517. Applicability.
The provisions of this chapter apply only with respect to transfers by sale, exchange, installment land sales contract, or lease with option to buy residential real property consisting of not less than one nor more than four dwelling units, whether or not the transaction is with the assistance of a licensed real estate broker or salesperson. For the purposes of this chapter, a "real estate contract" means a contract for the sale, exchange, or lease with the option to buy residential real estate subject to this chapter.
§ 55-518. Exemptions.
A. The following are specifically excluded from the provisions of this chapter:
1. Transfers pursuant to court order including, but not limited to, transfers ordered by a court in administration of an estate, transfers pursuant to a writ of execution, transfers by foreclosure sale or by a deed in lieu of a foreclosure, transfers by a trustee in bankruptcy, transfers by eminent domain, and transfers resulting from a decree for specific performance. Also, transfers by an assignment for the benefit of creditors pursuant to Chapter 9 (§ 55-156 et seq) and transfers pursuant to escheats pursuant to Chapter 9 (§ 55-156 et seq).
2. Transfers to a beneficiary of a deed of trust by
a trustor or successor in interest who is in default; transfers
by a trustee under a deed of trust pursuant to a foreclosure sale or by a deed in lieu of
foreclosure, or transfers by a beneficiary under a deed of trust
who has acquired the real property at a sale conducted pursuant to a
foreclosure sale under a deed of trust or has acquired the real property by a
deed in lieu of foreclosure.
3. Transfers by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust.
4. Transfers from one or more co-owners solely to one or more other co-owners.
5. Transfers made solely to any combination of a spouse or a person or persons in the lineal line of consanguinity of one or more of the transferors.
6. Transfers between spouses resulting from a decree of divorce or a property settlement stipulation pursuant to the provisions of Title 20.
7. Transfers made by virtue of the record owner's failure to pay any federal, state, or local taxes.
8. Transfers to or from any governmental entity or public or quasi-public housing authority or agency.
9. Transfers involving the first sale of a dwelling; provided, that this exemption shall not apply to the disclosures required by § 55-519.1.
B. Notwithstanding the provisions of subdivision 9 of this
section, the builder of a new dwelling shall disclose in writing to the
purchaser thereof all known material defects which would constitute a violation
of any applicable building code. In addition, for property that is located
wholly or partially in any locality comprising Planning District 15, the
builder or owner, if the builder is not the owner of the property, shall
disclose in writing whether the builder or owner has any knowledge of (i)
whether mining operations have previously been conducted on the property or
(ii) the presence of abandoned mines, shafts, or pits, if any. The disclosures
required by this subsection shall be made by a builder or owner (i) when
selling a completed dwelling, before acceptance of the purchase contract or
(ii) when selling a dwelling before or during its construction, after issuance
of a certificate of occupancy. Such disclosure shall not abrogate any warranty
or any other contractual obligations the builder or owner may have to the purchaser.
The disclosure required by this subsection may be made on the disclosure form
described in § 55-519. The builder or owner may not satisfy the
requirements of this subsection by the use of the disclaimer statement
described in § 55-519. If
no defects are known by the builder to exist, no written disclosure is required
by this subsection.
§ 55-519. Required disclosures.
A. With regard to transfers described in § 55-517 of this
chapter, the owner of the residential real property shall furnish to a purchaser one of the following:
1. Except with respect to
the disclosures required by § 55-519.1, a residential property disclaimer
disclosure statement
in a form provided by the Real Estate Board stating that the owner makes no the following representations or warranties as
to the condition of the real property: or any improvements thereon, and that the purchaser will be receiving the real
property "as is," that is, with all defects which may exist, if any,
except as otherwise provided in the real estate purchase contract; or
2. A residential property disclosure statement
disclosing those items contained in a form provided by the Real Estate Board to
implement the provisions of this chapter and to list items which are required
to be disclosed relative to the physical condition of the property. Such
disclosure form may include defects of which the owner has actual knowledge
regarding: (i) the water and sewer systems, including the source of household
water, water treatment system, and sprinkler system; (ii)
insulation; (iii) structural systems, including roof, walls, floors,
foundation, and any basement; (iv) plumbing, electrical, heating and air
conditioning systems; (v) wood-destroying insect infestation; (vi) land use
matters; (vii) hazardous or regulated materials, including asbestos, lead-based
paint, radon, and underground storage tanks or other adverse environmental site
conditions; and (viii) other material defects known to the owner. The
disclosure form shall contain a notice to prospective purchasers and owners (a)
that the prospective purchaser and the owner may wish to obtain professional
advice or inspections of the property and (b) that information is available at
the Department of Environmental Quality which identifies confirmed releases or
discharges of oil or other adverse environmental site conditions that may
affect the property. The disclosure form
shall also contain a notice to purchasers that the information contained in the
disclosure is the representations of the owner and is not the representations
of the broker or salesperson, if any. The owner shall not be required to
undertake or provide any independent investigation or inspection of the
property in order to make the disclosures required by this chapter.
(ii) The owner makes no representations or warranties as to the condition of the real property or any improvements thereon, and purchasers are advised to exercise whatever due diligence a particular purchaser deems necessary including obtaining a certified home inspection, as defined in § 54.1-500, in accordance with terms and conditions as may be contained in the real estate purchase contract, but in any event, prior to settlement on a parcel of residential real property.
B. The disclosure and disclaimer forms shall
contain a notice to purchasers that regardless of whether the
owner proceeds under subdivision A 1 or A 2, the(ii) The owner makes no representations with respect to any matters which that may pertain to parcels adjacent
to the subject parcel and that . Further,
such notice shall advise purchasers are
advised to exercise whatever due diligence a particular purchaser
deems necessary with respect to adjacent parcels in accordance with terms and
conditions as may be contained in the real estate purchase contract, but in any
event, prior to settlement on a parcel of residential real property.
C. The disclosure and disclaimer forms shall
contain a notice to purchasers that regardless of whether the owner proceeds
under subdivision A 1 or A 2, if property is located in a historic district
designated by the locality pursuant to § 15.2-2306 and which the owner has
knowledge of such designation, such fact shall be disclosed by the owner.
Otherwise, the notice shall advise purchasers
to exercise whatever due diligence a particular purchaser deems necessary to
determine (iii) The owner makes no
representations to any matters that pertain to whether the provisions of any historic district
ordinance affect the property and purchasers are
advised to exercise whatever due diligence a particular purchaser deems
necessary with respect to any historic district designated
by the locality pursuant
to § 15.2-2306,
including review of any local ordinance creating such district or any official
map adopted by the locality depicting historic districts, in accordance with
terms and conditions as may be contained in the real estate purchase contract,
but in any event, prior to settlement on a parcel of residential real property.
D. The disclosure and disclaimer forms shall
contain a notice to purchasers that regardless of whether the owner proceeds
under subdivision A 1 or A 2, the(iv) The
owner makes no representations with respect to whether the property contains
any resource protection areas established in an ordinance implementing the
Chesapeake Bay Preservation Act (§ 10.1-2100 et seq.) adopted by the locality
where the property is located pursuant to § 10.1-2109. Further, such
notice shall advise and that purchasers
are advised to exercise whatever due
diligence a particular purchaser deems necessary to determine whether the
provisions of any such ordinance affect the property, including review of any
official map adopted by the locality depicting resource protection areas, in
accordance with terms and conditions as may be contained in the real estate
purchase contract, but in any event, prior to settlement on a parcel of
residential real property.
E. The disclosure and disclaimer forms shall
contain a notice to purchasers that whether the owner proceeds under
subdivision A 1 or A 2,(v) The owner makes no representations with respect to information on any sexual
offenders registered under Chapter 23 (§ 19.2-387
et seq.) of Title 19.2 and
that purchasers shouldare
advised to exercise whatever due diligence they deem necessary
with respect to such information on
any sexual offenders registered under Chapter 23 (§ 19.2-387 et seq.) of Title
19.2, including how to obtain such information, in accordance
with terms and conditions as may be contained in the real estate purchase
contract, but in any event, prior to settlement pursuant to that contract .
F. The disclosure and disclaimer forms shall
contain a notice to purchasers that whether the owner proceeds under
subdivision 1 or 2 of subsection A, the(vi) The owner represents that there are no pending enforcement actions
pursuant to the Uniform Statewide Building Code (§ 36-97 et seq.) that affect
the safe, decent, and sanitary living conditions of the property of which the
owner has been notified in writing by the locality, except as
disclosed on the disclosure statement.
§ 55-519.1. Required disclosures pertaining to a military air installation.
The owner of residential real property located in any locality
in which
a military air installation is located, or in any adjacent locality, shall
furnish to the purchaser shall disclose to
the purchaser whether the subject parcel is located in a noise zone or accident
potential zone, or both,
if so designated on the official zoning map by the locality in which the
property is located on a
form provided by the Real Estate Board, a written disclosure stating that such property is located in a noise zone or
accident potential zone, or both, as designated by the locality in its official
zoning map. Such disclosure shall state the specific noise zone or
accident potential zone, or both, in which the property is located according to
the official zoning map.
§ 55-520. Time for disclosure; termination of contract.
A. The owner of residential real property subject to this
chapter shall deliver to the purchaser the written disclosures or
disclaimer disclosure statement
required by this chapter prior to the acceptance of a real estate purchase
contract or otherwise be subject to the provisions of
subsection B of this section. For the purposes of this chapter, a
"real estate purchase contract" means a contract for the sale,
exchange, or lease with option to buy of real estate subject to this chapter,
and "acceptance" means the full execution of a real
estate purchase contract by all parties. The residential property disclaimer
statement or residential property disclosure statement may be
included in the real estate purchase contract, in an addendum thereto, or in a
separate document.
B. If the disclosure or disclaimerstatement
required by this chapter is delivered to the purchaser after the acceptance of
the real estate purchase contract, the purchaser's sole remedy shall be to
terminate the real estate purchase contract at or prior to the earliest of (i)three
days after delivery of the disclosure or disclaimerstatement
in person; or (ii) five days after the postmark
if the disclosure or disclaimerstatement
is deposited in the United States mail, postage prepaid, and properly addressed
to the purchaser; or (iii) settlement upon purchase of
the property; or (iv) occupancy of the property by
the purchaser; or (v) the execution by the purchaser of a
written waiver of the purchaser's right of termination under this chapter
contained in a writing separate from the real estate purchase contract; or (vi)(v)
the purchaser making written application to a lender for a mortgage loan where
such application contains a disclosure that the right of termination shall end
upon the application for the mortgage loan; or
(vi) the execution by
the purchaser after receiving the disclosure statement required by this chapter
of a written waiver of the purchaser's right of termination under this chapter
contained in a writing separate
from the real estate purchase contract. In order to terminate a
real estate purchase contract when permitted by this chapter, the purchaser
must, within the times required by this chapter, give written notice to the
owner either by hand delivery or by United States mail, postage prepaid, and
properly addressed to the owner. If the purchaser terminates a real estate
purchase contract in compliance with this chapter, the termination shall be
without penalty to the purchaser, and any deposit shall be promptly returned to
the purchaser. Any rights of the purchaser to terminate the
contract provided by this chapter shall end if not exercised prior to the
earlier of (i) the making of a written application to a lender for a mortgage
loan where the application contains a disclosure that the right of termination
shall end upon the application for the mortgage loan or (ii) settlement or occupancy
by the purchaser, in the event of a sale, or occupancy, in the event of a lease
with option to purchase.
C. Notwithstanding the provisions of subsection B or
of subdivision B 2 of § 55-524, no purchaser of residential real
property located in a noise zone designated on the official zoning map of the
locality as having a day-night average sound level of less than 65 decibels
shall have the right to terminate a real estate purchase contract pursuant to
this section for failure of the property owner to timely provide any disclosure
required by § 55-519.1.
§ 55-521. Owner liability.
A. Except with respect to the disclosures required by §
55-519.1, the owner shall not be liable for any error, inaccuracy or omission
of any information delivered pursuant to this chapter if: (i) the error,
inaccuracy or omission was not within the actual knowledge of the owner or was
based on information provided by public agencies or by other persons providing
information as specified in subsection B that is
required to be disclosed pursuant to this chapter, or the owner reasonably
believed the information to be correct, and (ii) the owner was not grossly
negligent in obtaining the information from a third party and transmitting it.
The owner shall not be liable for any error, inaccuracy, or omission of any
information required to be disclosed by § 55-519.1 if the error, inaccuracy, or
omission was the result of information provided by an officer or employee of
the locality in which the property is located.
B. The delivery by a public agency or other person, as described in subsection C below, of any information required to be disclosed by this chapter to a prospective purchaser shall be deemed to comply with the requirements of this chapter and shall relieve the owner of any further duty under this chapter with respect to that item of information.
C. The delivery by the owner of a report or opinion prepared
by a licensed engineer, land surveyor, geologist, wood-destroying insect
control expert, contractor or other
home inspection expert, dealing with matters within the scope of the
professional's license or expertise, shall satisfy the requirements of subsection
A this chapter if the information is
provided to the ownerprospective
purchaser pursuant to a request therefor, whether written or oral.
In responding to such a request, an expert may indicate, in writing, an
understanding that the information provided will be used in fulfilling the
requirements of this chapter and, if so, shall indicate the required
disclosures, or portions thereof, to which the information being furnished is
applicable. Where such a statement is furnished, the expert shall not be
responsible for any items of information, or, portions thereof, other than
those expressly set forth in the statement.
§ 55-522. Change in circumstances.
If information disclosed in accordance with this chapter is
subsequently rendered or discovered to be inaccurate as a result of any act,
occurrence, information received, circumstance or agreement subsequent to the
delivery of the required disclosures, the inaccuracy resulting therefrom does
not constitute a violation of this chapter. However, at or before settlement,
the owner shall be required to disclose any material change in the physical
condition of disclosures made relative to the
property or certify to the purchaser at settlement that the condition of
disclosures made relative to the
property isare
substantially the same as it was when the disclosure form was provided. If, at
the time the disclosures are required to be made, an item of information
required to be disclosed is unknown or not available to the owner, the owner
may state that the information is unknown or may use an approximation of the
information, provided the approximation is clearly identified as such, is
reasonable, is based on the actual knowledge of the owner, and is not used for
the purpose of circumventing or evading this chapter.
§ 55-524. Actions under this chapter.
A. Notwithstanding any other provision of this chapter or any other statute or regulation, no cause of action shall arise against an owner or a real estate licensee for failure to disclose that an occupant of the subject real property, whether or not such real property is subject to this chapter, was afflicted with human immunodeficiency virus (HIV) or that the real property was the site of:
1. An act or occurrence which had no effect on the physical structure of the real property, its physical environment, or the improvements located thereon; or
2. A homicide, felony, or suicide.
B. The purchaser's remedies hereunder for failure of an owner to comply with the provisions of this chapter are as follows:
1. In the event of a misrepresentation in any
residential property disclosure statement or failure to deliver a disclosure or
disclaimer statement, an action for actual damages suffered as a result of
defects existing in the property as of the date of execution of the real estate
purchase contract which would have been disclosed by a disclosure
in compliance with this chapter and of which the purchaser was not aware at the
time of settlement if by sale of the property, or occupancy by the purchaser if
by lease with the option to purchase; or If the owner fails
to provide
2. In the event of a misrepresentation in any
residential property disclosure statement or the failure to provide
the disclosure or disclaimer statement required
by this chapter, the contract may be terminated subject to the provisions of
subsection B of § 55-520.
32. In
the event the owner fails to provide the disclosure required by § 55-519.1, or
the owner misrepresents, willfully or otherwise, the information required in
such disclosure, except as result of information provided by an officer or
employee of the locality in which the property is located, the purchaser may
maintain an action to recover his actual damages suffered as the result of such
violation. Notwithstanding the provisions of this subdivision, no purchaser of
residential real property located in a noise zone designated on the official
zoning map of the locality as having a day-night average sound level of less
than 65 decibels shall have a right to maintain an action for damages pursuant
to this section.
C. Any action brought under this subsection shall be commenced
within one year of the date the purchaser received the disclosure or
disclaimer statement. If no disclosure or disclaimer
statement was delivered to the purchaser, an action shall be commenced within
one year of the date of settlement if by sale, or occupancy if by lease with an
option to purchase.
Nothing contained herein shall prevent a purchaser from pursuing any remedies at law or equity otherwise available against an owner in the event of an owner's intentional or willful misrepresentation of the condition of the subject property.
§ 55-525. Real Estate Board to develop form; when effective.
An owner shall be required to make disclosures or
a disclaimer required by this chapter for real property subject to
a real estate purchase contract which is fully executed by all parties thereto
on and after July 1, 1993January 1, 2008.
On or before January 1, 19932008,
the Real Estate Board shall, by regulation, develop the formsform
for the residential property disclaimer
statement and the residential property disclosure statement. and shall provide at least one copy of each form to all licensees of the Board.
Until such time as the forms are developed by the Board, forms currently in use
may continue to be used. After development of the initial forms, the The Board may, by regulation, at any time amend the formsform
as the Board deems necessary and appropriate.
Prior to July 1, 1993, at which time an owner of
residential real property shall be required to provide a purchaser with
disclosures required by this chapter, the parties may agree in writing (i) in
the real estate purchase contract, (ii) in an addendum to the real estate
purchase contract, or (iii) in a separate agreement, that the provisions of
this chapter shall apply. Upon such agreement, the owner of residential real
property shall provide the purchaser with a residential property disclaimer
statement or a residential property disclosure statement. Such statement may be
prepared by the owner, an attorney, or a real estate broker and shall comply
with the provisions of this chapter.