|Introduced in House||Passed House||Introduced in Senate||Passed Senate||Became Law|
Real estate settlements; kickbacks and other payments, remedies, penalties.
Relocates within Title 55.1 the existing provision that prohibits persons from paying or receiving a kickback, rebate, commission, thing of value, or other payment pursuant to an agreement to refer business incident to a settlement from Chapter 9 (Real Estate Settlements) to Chapter 10 (Real Estate Settlement Agents). This relocation authorizes the State Corporation Commission to impose penalties, issue injunctions, and require restitution in cases where a person who does not hold a license from the appropriate licensing authority has violated the provision. The measure also adds to Chapter 10 of Title 55.1 provisions that (i) authorize a court to assess civil penalties of not more than $2,500 per violation of the chapter and (ii) authorize the recovery of costs and reasonable expenses and attorney fees.
Be it enacted by the General Assembly of Virginia:
� 55.1-1009.1. Prohibition against payment or receipt of
settlement services kickbacks, rebates, commissions, and other payments [
; criminal penalty ] .
A. No person selling real property, or performing services as a settlement agent, lay real estate settlement agent, real estate agent, attorney, or lender incident to any real estate settlement or sale, shall pay or receive, directly or indirectly, any kickback, rebate, commission, thing of value, or other payment pursuant to any agreement or understanding, oral or otherwise, that business incident to services required to complete a settlement be referred to any person.
B. Nothing in this section shall be construed to prohibit:
1. Expenditures for bona fide advertising and marketing promotions otherwise permissible under the provisions of the federal Real Estate Settlement Procedures Act (12 U.S.C. � 2601 et seq.);
2. The provision of educational materials or classes, if such materials or classes are provided to a group of persons or entities pursuant to a bona fide marketing or educational effort;
3. The payment to any person of a bona fide salary or compensation or other payment for services actually performed for the business of the settlement service provider; or
4. An employers payment to its own bona fide employees for referrals of mortgage loan or insurance business. An employers payment to its own employees for the referral of insurance business shall be subject to the requirements of subdivision B 8 of � 38.2-1821.1.
C. No person shall be in violation of this section solely by reason of ownership in a settlement service provider, where such person receives returns on investments arising from the ownership interest, provided that such person discloses in writing to the consumer an ownership interest in those settlement services, including its ownership percentage in the settlement service provider pursuant to the requirements of � 55.1-905.
D. Any person who knowingly and willfully violates
this section is guilty of a Class 3 misdemeanor. Any criminal charge brought
under this section shall be by indictment pursuant to Chapter 14 (� 19.2-216 et
seq.) of Title 19.2. ]
� 55.1-1015.1. Civil penalties; attorney fees.
A. In addition to the penalties and liabilities set forth
in �� 55.1-1009.1 and 55.1-1015, in any action brought under this chapter, if a
court finds that a person has willfully engaged in an act or practice in
violation of this chapter, the Attorney General [
, the attorney for
the Commonwealth, or the attorney for the locality ] may recover for
the Literary Fund, upon petition to the court, a civil penalty of not more than
[ $2,500 $5,000 ] per violation. For purposes of this
section, prima facie evidence of a willful violation may be shown when the
Attorney General [ , the attorney for the Commonwealth, or the
attorney for the locality ] notifies the alleged violator by
certified mail that an act or practice is a violation of this chapter and the
alleged violator, after receipt of the notice, continues to engage in the act
B. The Attorney General [
, the attorney for the
Commonwealth, or the attorney for the county, city, or town ] recovering
a civil penalty under subsection A, or the appropriate licensing authority or
the Commission instituting an enforcement action under � 55.1-1015, may recover
costs and reasonable expenses incurred by it in investigating and preparing the
case and attorney fees.
2. That � 55.1-904 of the Code of Virginia is repealed.
|01/16/2020||House||House: Referred to Committee on Labor and Commerce|
|01/07/2020||House||House: Prefiled and ordered printed; offered 01/08/20 20102120D|
|01/07/2020||House||House: Referred to Committee on General Laws|