RD633 - Report for Chapter 505 Enactment Clause 2 (Regular Session 2016)

    Executive Summary:
    Delegate Roxann Robinson introduced HB 1264 in part because of a concern that it is not mandatory to disclose a covenant in a neighborhood without a homeowner association. She surmised that if buyers are not aware of the existence of covenants when they purchase their homes; they will not know to comply.

    The concept was discussed at the July 14 Affordable Housing and Real Estate Law Workgroup of the Virginia Housing Commission. Delegate Robinson, Chip Dicks of the Virginia Association of Realtors (VAR), Mary Broz-Vaughan representing Department of Professional and Occupational Regulation were present as well as the workgroup members consisting of legislators and stakeholders (please see Virginia Housing Commission website for member list).

    Chip Dicks said that the bill being in the Commission was unusual because the bill had passed and was now law. Further, in 1992, the Virginia Association of Realtors requested legislation to address the Residential Disclosure and Disclaimer Act. Part of the Act was hardly ever used, and the Act became almost fully disclaimer and hardly any disclosure.

    In 2001, through the Housing Commission a red-flag disclosure bill was created and adopted. This then became a bill other like disclosures were added on to it; to address this, Delegate Miller in 2013 suggested establishing a process where DPOR puts on the website the current forms for the updated laws. Since then, there have been a number of clarifications.

    In 2016, the clarification was made to help ensure that buyers look into covenants and restrictions in circumstances where there is no HOA. Chip Dicks stated that in the opinion of the Virginia Association of Realtors, yes, we’ve addressed this by having it on the Real Estate Board website. We don’t know a better way to address this than the way it is now.

    Others agreed, a discussion of liability ensued.

    DPOR's representative Mary Broz-Vaughan, said she could not remember a specific complaint about this issue. The burden to provide the disclosure statement and have it signed applies whether or not you are represented by an agent.

    After full discussion, the current process was determined by the Workgroup to be adequate; the Full Commission acquiesced at the September 21 meeting.

    No further legislation was recommended concerning Chapter 505 Enactment Clause 2.