HB 1161

            
2020 SESSION


20107141D

HOUSE BILL NO. 1161

AMENDMENT IN THE NATURE OF A SUBSTITUTE

(Proposed by the House Committee on General Laws

on February 4, 2020)

(Patron Prior to Substitute--Delegate Lopez)

A BILL to amend and reenact �� 54.1-2133 and 55.1-703 of the Code
of Virginia, relating to Virginia Residential Property Disclosure Act; required
disclosures for buyer to beware; lead pipes.

Be it enacted by the General Assembly of Virginia:

1. That �� 54.1-2133 and 55.1-703 of the Code of Virginia are
amended and reenacted as follows:

� 54.1-2133. Licensees engaged by landlords to lease property.

A. A licensee engaged by a landlord shall:

1. Perform in accordance with the terms of the brokerage
agreement;

2. Promote the interests of the landlord by:

a. Conducting marketing activities on behalf of the landlord
pursuant to the brokerage agreement with the landlord. In so doing, the
licensee shall seek a tenant at the rent and terms agreed in the brokerage
agreement or at a rent and terms acceptable to the landlord; however, the
licensee shall not be obligated to seek additional offers to lease the property
while the property is subject to a lease or a letter of intent to lease under
which the tenant has not yet taken possession, unless agreed as part of the
brokerage agreement, or unless the lease or the letter of intent to lease so
provides;

b. Assisting the landlord in drafting and negotiating leases
and letters of intent to lease, and presenting in a timely manner all written
leasing offers or counteroffers to and from the landlord and tenant pursuant to
� 54.1-2101.1, even when the property is already subject to a lease or a letter
of intent to lease; and

c. Providing reasonable assistance to the landlord to finalize
the lease agreement;

3. Maintain confidentiality of all personal and financial
information received from the client during the brokerage relationship and any
other information that the client requests during the brokerage relationship be
maintained confidential, unless otherwise provided by law or the landlord
consents in writing to the release of such information;

4. Exercise ordinary care;

5. Account in a timely manner for all money and property
received by the licensee in which the landlord has or may have an interest;

6. Disclose to the landlord material facts related to the
property or concerning the transaction of which the licensee has actual
knowledge; and

7. Comply with all requirements of this article, fair housing
statutes and regulations for residential real estate transactions as
applicable, and all other applicable statutes and regulations which are not in
conflict with this article.

B. Licensees shall treat all prospective tenants honestly and
shall not knowingly give them false information. A licensee engaged by a
landlord shall disclose to prospective tenants all material adverse facts
pertaining to the physical condition of the property which are actually known
by the licensee. If a licensee has actual knowledge of the existence of
defective drywall any pipe, pipe or plumbing fitting, fixture, solder,
or flux that does not meet the federal Safe Drinking Water Act definition of
"lead free" pursuant to 42 U.S.C. � 300j-21 in a residential
property, the licensee shall disclose the same to the prospective tenant.
For purposes of this section, "defective drywall" means all defective
drywall as defined in � 36-156.1. As used in this section, the term
"physical condition of the property" shall refer to the physical
condition of the land and any improvements thereon, and shall not refer to: (i)
matters outside the boundaries of the land or relating to adjacent or other
properties in proximity thereto, (ii) matters relating to governmental land use
regulations, and (iii) matters relating to highways or public streets. Such
disclosure shall be made in writing. No cause of action shall arise against any
licensee for revealing information as required by this article or applicable
law. Nothing in this subsection shall limit the right of a prospective tenant
to inspect the physical condition of the property.

C. A licensee engaged by a landlord in a real estate
transaction may, unless prohibited by law or the brokerage agreement, provide
assistance to a tenant, or potential tenant, by performing ministerial acts.
Performing such ministerial acts that are not inconsistent with subsection A
shall not be construed to violate the licensees brokerage relationship with
the landlord unless expressly prohibited by the terms of the brokerage
agreement, nor shall performing such ministerial acts be construed to form a brokerage
relationship with such tenant or potential tenant.

D. A licensee engaged by a landlord does not breach any duty
or obligation owed to the landlord by showing alternative properties to
prospective tenants, whether as clients or customers, or by representing other
landlords who have other properties for lease.

E. Licensees in residential real estate transactions shall
disclose brokerage relationships pursuant to the provisions of this article.

� 55.1-703. Required disclosures for buyer to beware; buyer to
exercise necessary due diligence.

A. The owner of the residential real property shall furnish to
a purchaser a residential property disclosure statement for the buyer to beware
of certain matters that may affect the buyers decision to purchase such real
property. Such statement shall be provided by the Real Estate Board on its
website.

B. The residential property disclosure statement provided by
the Real Estate Board on its website shall include the following:

1. The owner makes no representations or warranties as to the
condition of the real property or any improvements thereon, or with regard to
any covenants and restrictions, or any conveyances of mineral rights, as may be
recorded among the land records affecting the real property or any improvements
thereon, and purchasers are advised to exercise whatever due diligence a
particular purchaser deems necessary, including obtaining a 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 pursuant to such contract;

2. The owner makes no representations with respect to any
matters that may pertain to parcels adjacent to the subject parcel, including
zoning classification or permitted uses of adjacent parcels, and 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 pursuant to such contract;

3. 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 (i) any
local ordinance creating such district, (ii) any official map adopted by the
locality depicting historic districts, and (iii) any materials available from
the locality that explain (a) any requirements to alter, reconstruct, renovate,
restore, or demolish buildings or signs in the local historic district and (b)
the necessity of any local review board or governing body approvals prior to
doing any work on a property located in a local historic district, 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 such
contract;

4. 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 (� 62.1-44.15:67 et seq.)
adopted by the locality where the property is located pursuant to �
62.1-44.15:74, and 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 pursuant to such contract;

5. 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 purchasers are advised to exercise whatever due
diligence they deem necessary with respect to 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 such contract;

6. The owner makes no representations with respect to whether
the property is within a dam break inundation zone. Such disclosure statement
shall advise purchasers to exercise whatever due diligence they deem necessary
with respect to whether the property resides within a dam break inundation
zone, including a review of any map adopted by the locality depicting dam break
inundation zones;

7. The owner makes no representations with respect to the
presence of any stormwater detention facilities located on the property, or the
existence or recordation of any maintenance agreement for such facilities, and
purchasers are advised to exercise whatever due diligence they deem necessary
to determine the presence of any stormwater detention facilities on the
property, or any maintenance agreement for such facilities, such as contacting
their settlement provider, consulting the locality in which the property is
located, or reviewing any survey of the property that may have been conducted,
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 such
contract;

8. The owner makes no representations with respect to the
presence of any wastewater system, including the type or size of the wastewater
system or associated maintenance responsibilities related to the wastewater
system, located on the property, and purchasers are advised to exercise
whatever due diligence they deem necessary to determine the presence of any
wastewater system on the property and the costs associated with maintaining,
repairing, or inspecting any wastewater system, including any costs or
requirements related to the pump-out of septic tanks, 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 such contract;

9. The owner makes no representations with respect to any
right to install or use solar energy collection devices on the property;

10. The owner makes no representations with respect to whether
the property is located in one or more special flood hazard areas, and
purchasers are advised to exercise whatever due diligence they deem necessary,
including (i) obtaining a flood certification or mortgage lender determination
of whether the property is located in one or more special flood hazard areas,
(ii) reviewing any map depicting special flood hazard areas, (iii) contacting
the Federal Emergency Management Agency (FEMA) or visiting the website for
FEMAs National Flood Insurance Program or for the Virginia Department of
Conservation and Recreations Flood Risk Information System, and (iv)
determining whether flood insurance is required, 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 such contract;

11. The owner makes no representations with respect to whether
the property is subject to one or more conservation or other easements, and
purchasers are advised to exercise whatever due diligence a particular
purchaser deems necessary 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 such contract; and

12. The owner makes no representations with respect to whether
the property is subject to a community development authority approved by a
local governing body pursuant to Article 6 (� 15.2-5152 et seq.) of Chapter 51
of Title 15.2, and purchasers are advised to exercise whatever due diligence a
particular purchaser deems necessary in accordance with terms and conditions as
may be contained in the real estate purchase contract, including determining
whether a copy of the resolution or ordinance has been recorded in the land
records of the circuit court for the locality in which the community
development authority district is located for each tax parcel included in the
district pursuant to � 15.2-5157, but in any event prior to settlement pursuant
to such contract; and

13. The owner makes no representations with respect to
whether the property contains any pipe, pipe or plumbing fitting, fixture,
solder, or flux that does not meet the federal Safe Drinking Water Act
definition of "lead free" pursuant to 42 U.S.C. � 300j-21, and
purchasers are advised to exercise whatever due diligence they deem necessary
to determine whether the property contains any pipe, pipe or plumbing fitting,
fixture, solder, or flux that does not meet the federal Safe Drinking Water Act
definition of "lead free," 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 such contract.

C. The residential property disclosure statement shall be
delivered in accordance with � 55.1-709.