Virginias Residential Property Disclosure Act (Virginia Code §55-517 et seq.) requires real estate licensees to inform the parties to a transaction with whom they deal of their rights and obligations under the Act. As a licensee providing this information to clients, you must be prepared to answer any questions and to furnish them with a copy of the Act at their request.
When does the Act apply?
The Act applies to sales, exchanges, installment sales or leases with option to purchase of residential real property improved with one to four dwelling units.
When wont the Act apply?
The Act does not apply to sales of new homes (subject to certain exceptions discussed below); transfers pursuant to court order (in estate administration, pursuant to writ execution, foreclosure, bankruptcy, condemnation, or by decree for specific performance); transfers among co-owners; transfers among spouses; transfers among parents or grandparents and their children or grandchildren; tax sales; transfers involving a government or housing authority.
What does the Act require a seller to do?
The Act requires sellers to furnish purchasers with a disclosure statement developed by the Virginia Real Estate Board.
When does a purchaser get a disclosure statement?
A purchaser must be furnished with a disclosure statement signed by the seller prior to final ratification of the purchase contract. If such statement is not received by final ratification, the purchasers sole remedy shall be to terminate the purchase contract by sending written notice to the seller either by hand delivery or U. S. Mail, postage prepaid, at or prior to the earliest of (i)three days after receiving the statement (if delivered in person); (ii) five days after postmark (if sent by U. S. Mail, postage prepaid); (iii) settlement; (iv) occupancy by purchaser; (v) purchasers making written application for a mortgage loan if such application discloses that the termination right ends upon application; (vi) purchasers execution of a written waiver of the right to terminate (such waiver may not be in the purchaser contract).
What does the disclosure statement say?
Purchasers are advised to consult the DPOR webpage. The statement will direct purchasers to the RESIDENTIAL PROPERTY DISCLOSURES web page for important information about the real property.
What is disclosed by the seller?
A seller, in furnishing a disclosure statement, makes no representations or warranties as to the condition of the property or any improvements located thereon, nor with respect to the matters set forth and described at the RESIDENTIAL PROPERTY DISCLOSURES web page
What should a purchaser do?
Purchaser is advised to exercise whatever due diligence purchaser deems necessary, including a certified home inspection, as defined in §54.1-500, in accordance with the terms and condition of the purchase contract, but in any event prior to settlement.
What must builders do? A builder of a new home must disclose to a purchaser in writing all known material defects which would constitute a violation of any applicable building code. In addition, for property located wholly or partially in any locality comprising Planning District 15 (the City of Richmond, the Town of Ashland, and the counties of Charles City, Chesterfield, Goochland, Hanover, Henrico, New Kent and Powhatan), the builder (or seller, if the owner is not the builder) shall disclose in writing whether mining operations have previously been conducted on the property or the presence of any abandoned mines, shafts or pits. This disclosure does not abrogate any warranty or other obligations the builder may have to the purchaser, and must be made (i) when selling a completed home, before acceptance of the purchase contract, or (ii) when selling a home before or during construction, after issuance of a certificate of occupancy. No disclosure or statement of any kind is required if there is no such information to disclose. Any required disclosure may be, but need not be, contained in the disclosure statement described in this Summary.
What if a purchaser does not get a disclosure statement?
If the seller fails to provide the required disclosure statement, the contract may be terminated as set forth above. If the seller fails to provide the required disclosure statement, or the seller misrepresents, willfully or otherwise, the information required in such disclosure, except as a result of information provided by the locality in which the property is located, the purchaser may bring an action to recover actual damages suffered as a result of such violation. No purchaser of 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 such damages.
Are there limits to seeking damages under the Act?
Yes. Any such action must be brought within one year of the date the purchaser received the disclosure statement. If no disclosure statement was provided to the purchaser, the action must be brought within one year of the date of settlement, or purchasers occupancy of the property by lease with option to purchase.
Are there things that are not disclosed?
Yes. Purchasers should be aware that neither a seller nor a real estate licensee is obligated to disclose facts or occurrences which have no effect on the physical structure of the property, its physical environment, or the improvements located thereon, or the fact that the property was the site of a homicide, felony, or suicide. Furthermore, it is a violation of federal law to disclose whether a previous occupant of the property was afflicted with the HIV virus or has AIDS.
What about noise?
If the property is located in a locality in which a military air installation is located, the seller, including builders or owners of new property, must provide purchasers with a disclosure statement setting forth whether the property is located in a noise zone or accident potential zone, or both, if so designated on the official zoning map of the locality. Such disclosure shall state the specific noise or accident potential zone, or both, in which the property is located.
Mr. Hawkins is a partner with the law firm of Peterson, Goodman & Hawkins PLC in Vienna, Virginia. He represents buyers, sellers, and developers in all phases of residential and commercial real estate transactions.