2020 Legislative Update: New and Amended Laws Impacting Commercial Real Estate and Community Association Clients

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Every July 1st in Virginia, we can expect a few things without fail.  The summer heat and humidity will have settled down with a ponderous thud, here to remain, unwavering, for the rest of the summer.  The cicadas return – largely unseen but certainly heard, providing a din that fills every afternoon.  And last, but not least, the new laws passed by Virginia’s 2020 General Assembly session go into effect, and Sands Anderson’s Commercial Real Estate and Community Associations Groups review them to identify those that may impact or interest you as a practitioner in the field.

The dust has now settled on last year’s recodification of Title 55 (where Virginia’s laws governing real estate and community associations are located) into Title 55.1, just in time for a banner year from the General Assembly.  According to Virginia’s Legislative Services, the General Assembly hasn’t seen this many bills and resolutions introduced since at least 1994 – a total of 3,900 were presented.[1]  About one third of those (1,289 to be exact) passed both houses and were signed into law by the Governor.[2]  Many of the new laws impact the fields of commercial real estate and community associations.  For example, a notable number of new bills were passed dealing with landlord and tenant matters.  There are also a collection of bills directly addressing community associations (including a new approach to the termination of condominiums), as well as the usual slate of legislation revising civil procedure and tax laws relating to real property.

In addition to the numerous bills passed during the regular session, the General Assembly also adopted emergency amendments to the Budget Bill, HB 29 and 30, to address the impacts of the global COVID-19 pandemic.  Certainly of note to local government, community associations, and real estate practitioners alike are the amendments permitting the convening of virtual meetings during the pendency of the Governor’s state of emergency declaration, provided certain enumerated conditions are met.  Also of note are a series of solar energy bills, a number of which give local governments, property owners, and those in the solar industry new tools with which to responsibly increase the availability of this source of renewable energy.

Excerpts from these and other pertinent bill summaries prepared by the Virginia Division of Legislative Services are included below.  For the full summaries, simply click on the applicable bill number.

Budget Bills

  • House Bill 29Budget Bill. This bill amends Chapter 854 of the 2019 Acts of Assembly.
  • House Bill 30Budget Bill. This bill provides for all appropriations of the Budget submitted by the Governor of Virginia in accordance with the provisions of § 2.2-1509, Code of Virginia, and provides a portion of revenues for the two years ending respectively on the thirtieth day of June 2021, and the thirtieth day of June 2022.

Pursuant to Amendment 28 to HB29 and Amendment 137 to HB 30, virtual meetings of local governments and community associations can be conducted in the following circumstances:

Notwithstanding any other provision of law, any public body, including any state, local, regional, or regulatory body, or a governing board as defined in § 54.1-2345 of the Code of Virginia may meet by electronic communication means without a quorum of the public body or any member of the governing board physically assembled at one location when the Governor has declared a state of emergency in accordance with § 44-146.17, provided that (i) the nature of the declared emergency makes it impracticable or unsafe for the public body or governing board to assemble in a single location; (ii) the purpose of meeting is to discuss or transact the business statutorily required or necessary to continue operations of the public body or common interest community association as defined in § 54.1-2345 of the Code of Virginia and the discharge of its lawful purposes, duties, and responsibilities; (iii) a public body shall make available a recording or transcript of the meeting on its website in accordance with the timeframes established in §§ 2.2-3707 and 2.2-3707.1 of the Code of Virginia; and (iv) the governing board shall distribute minutes of a meeting held pursuant to this subdivision to common interest community association members by the same method used to provide notice of the meeting.

A public body or governing board convening a meeting in accordance with this subdivision shall:

  1. Give notice to the public or common interest community association members using the best available method given the nature of the emergency, which notice shall be given contemporaneously with the notice provided to members of the public body or governing board conducting the meeting;
  2. Make arrangements for public access or common interest community association members access to such meeting through electronic means including, to the extent practicable, videoconferencing technology. If the means of communication allows, provide the public or common interest community association members with an opportunity to comment; and
  3. Public bodies must otherwise comply with the provisions of § 2.2-3708.2 of the Code of Virginia.

The nature of the emergency, the fact that the meeting was held by electronic communication means, and the type of electronic communication means by which the meeting was held shall be stated in the minutes of the public body or governing board.”

Civil Procedure

  • House Bill 834 – Order of publication; electronic notice. This bill provides that a court may permit notice of an order of publication to be given by electronic means in addition to or in lieu of publication in a newspaper, under such terms and conditions as the court may direct. This bill is a recommendation of the Boyd-Graves Conference.
  • House Bill 1581 – Tax delinquent real property; correction of tax records. This bill transfers from the local clerk of court to the local treasurer the duties of maintaining records of delinquent real property taxes and sales of such property and of correcting records relating to such property.
  • House Bill 1605 / Senate Bill 553 – Partition of property. This bill incorporates major provisions of the Uniform Partition of Heirs Property Act. The bill provides that in partition actions the court shall order an appraisal to determine fair market value of the property, unless the parties have agreed to the value of the property or to another valuation method. The bill also provides factors to be considered by the court when making an allotment of the property when there is a dispute among the parties. The bill further provides that if the court orders a sale of property in a partition action, the sale shall be conducted on the open market, unless the court finds that a sale by sealed bids or at auction would be more economically advantageous to the parties as a group. The bill outlines the procedure for such open-market sale.
  • Senate Bill 640 – Unlawful detainer; expungement. This bill creates a process by which unlawful detainer actions filed in a general district court that have been dismissed or nonsuited may be expunged upon request of the defendant to such action. The bill has a delayed effective date of January 1, 2022.

Community Associations / Common Interest Communities

  • House Bill 176 / Senate Bill 672 – Property Owners’ Association Act and Virginia Condominium Act; contract disclosure statement; extension of right of cancellation. This bill provides for a limited extension of the right of cancellation where such extension is provided for in a ratified real estate contract, defined in the bill.
  • House Bill 720 – Property Owners’ Association Act; notice on restrictions on display of political signs. This bill requires the association disclosure packet to contain a statement of any restrictions on the size, place, duration, and manner of placement or display of political signs by a lot owner on his lot.
  • House Bill 1548 – Common interest communities; Virginia Condominium Act; termination of condominium; respective interests of unit owners. This bill provides that the respective interests of condominium unit owners upon the termination of a condominium shall be as set forth in the termination agreement, unless the method of determining such respective interests is other than the relative fair market values, in which case the association shall provide each unit owner with a notice stating the result of that method for the unit owner’s unit and, no later than 30 days after transmission of that notice, any unit owner disputing the interest to be distributed to his unit may require that the association obtain an independent appraisal of the condominium units. The bill provides a method of adjusting the respective interests of the unit owners if the amount of such independent appraisal of an objecting unit owner’s unit is at least 10 percent more than the amount stated in the association’s notice.
  • Senate Bill 630 – Common interest communities; electric vehicle charging stations permitted. This bill prohibits certain common interest community associations from prohibiting the installation of an electric vehicle charging station within the boundaries of a member’s unit or limited common element parking space appurtenant to the unit owned by the unit owner or, in the case of a property owners’ association, a lot owner’s property, and sets forth provisions governing the installation and removal of such charging stations. The bill also requires the association member installing an electric vehicle charging station to indemnify and hold the association harmless from all liability resulting from a claim arising out of the installation, maintenance, operation, or use of such charging station.

Contracts and Conveyances

  • House Bill 788 – Restrictive covenants; certificate of release of certain prohibited covenants. This bill prohibits a deed containing a restrictive covenant from being recorded on or after July 1, 2020, and provides the form for a Certificate of Release of Certain Prohibited Covenants to be recorded to remove any such restrictive covenant.
  • House Bill 831 / Senate Bill 794Utility easements; location of broadband and other communications facilities. This bills states Virginia’s policy regarding the provision and expansion of broadband and other communication services.  Among other things, the bill provides that (1) absent any express prohibition on the installation and operation of broadband or other communications services in an easement that is contained in a deed or other instrument by which the easement was granted, the installation and operation of broadband or other communications services within any easement shall be deemed, as a matter of law, to be a permitted use within the scope of every easement for the location and use of electric and communications facilities and (2) subject to compliance with any express prohibitions in a written easement, any incumbent utility or communications provider may use an easement to install, construct, provide, maintain, modify, lease, operate, repair, replace, or remove its communications equipment, system, or facilities, and provide communications services through the same, without such incumbent utility or communications provider paying additional compensation to the owner or occupant of the servient estate or to the incumbent utility, provided that no additional utility poles are installed.
  • House Bill 1222Notaries; satisfactory evidence of identity; persons in nursing homes or assisted living facilities. This bill allows expired state issued driver’s licenses or state issued identification cards and expired passports to be used as a means of identification for notarial purposes for individuals residing in nursing homes or assisted living facilities, provided such expired documents expired within five years of the date of use for such identification purposes.
  • Senate Bill 658Contracts with design professionals; provisions requiring a duty to defend void. This bill provides that any provision contained in any contract relating to the planning or design of a building, structure, or appurtenance thereto, including moving, demolition, or excavation connected therewith, or any provision contained in any contract relating to the planning or design of construction projects by which any party purports to impose a duty to defend on any other party to the contract, is against public policy and is void and unenforceable.

Eminent Domain

  • Senate Bill 951 – Eminent domain; written offer to purchase property. This bill requires a condemnor’s written offer to purchase property prior to instituting a condemnation proceeding, and its written statement of the amount established as just compensation, to be on such condemnor’s letterhead and signed by an authorized employee of such condemnor.

Landlord / Tenant

  • House Bill 393 / Senate Bill 707Landlord and tenant; tenant rights and responsibilities. This bill requires the Director of the Department of Housing and Community Development to develop a statement of tenant rights and responsibilities explaining in plain language the rights and responsibilities of tenants under the Virginia Residential Landlord and Tenant Act (§ 55.1-1200 et seq.) and maintain such statement on the Department’s website along with a form to be signed by the parties to a rental agreement. The bill requires that the statement be provided to any prospective tenant and that the form developed by the Department be signed by the parties to the rental agreement. The bill prohibits a landlord from filing or maintaining an action against a tenant in a court of law for any alleged lease violation until he has provided the tenant with the statement of tenant rights and responsibilities.
  • House Bill 519 / Senate Bill 115 – Virginia Residential Landlord and Tenant Act; notice of termination to contain legal aid information. Provides that no notice of termination of tenancy served upon a tenant receiving tenant-based rental assistance through (i) the Housing Choice Voucher Program, 42 U.S.C. § 1437f(o), or (ii) any other federal, state, or local program by a private landlord is effective unless it contains on its first page, in type no smaller or less legible than that otherwise used in the body of the notice, the statewide legal aid telephone number and website address.
  • House Bill 590 / Senate Bill 200Tax credit for participating landlords; eligible housing areas. This bill expands the definition of “eligible housing area” for the housing choice voucher tax credit to include Virginia census tracts in the Washington-Arlington-Alexandria Metropolitan Statistical Area in which less than 10 percent of the population lives below the poverty level. Landlords who rent qualified housing units within such areas are eligible for an income tax credit. Current law only applies to such areas within the Richmond and Virginia Beach-Norfolk-Newport News Metropolitan Statistical Areas.  The bill establishes a 2025 sunset date on the credit
  • House Bill 594 / Senate Bill 388Virginia Residential Landlord and Tenant Act; return of security deposit. This bill requires the landlord to return the tenant’s security deposit, minus any deductions or charges, within 45 days of the termination of the tenancy or the date the tenant vacates the dwelling unit, whichever occurs last. Under current law, the 45-day period to return the security deposit begins on the date of the termination of the tenancy.
  • House Bill 1333 – Landlord and tenant; damage insurance in lieu of security deposit. This bill provides that a landlord may permit a tenant to provide damage insurance coverage meeting certain criteria in lieu of the payment of a security deposit. The bill also caps the total amount of any combination of security deposit and rental insurance coverage required by the landlord to twice the amount of the periodic rent payment and provides that a tenant who initially opts to provide damage insurance in lieu of a security deposit may, at any time without consent of the landlord, opt to pay the full security deposit to the landlord in lieu of maintaining a damage insurance policy.
  • House Bill 1401 – Landlord and tenant; remedy for unlawful ouster; ex parte issuance of order to recover possession. This bill provides that, upon receipt of a petition for an order to recover possession or restore essential services alleging a tenant’s unlawful ouster from the rental premises and a finding that the petitioner has attempted to provide the landlord with actual notice of the hearing on the petition, the judge of the general district court may issue such order ex parte upon a finding of good cause to do so. The bill further provides that an ex parte order shall be a preliminary order that specifies a date for a full hearing on the merits of the petition, to be held within five days of the issuance of the ex parte order.
  • House Bill 1420 – Landlord and tenant; charge for late payment of rent; restrictions. This bill provides that a landlord shall not charge a tenant for late payment of rent unless such charge is provided for in the written rental agreement, and that no such late charge shall exceed the lesser of 10 percent of the periodic rent or 10 percent of the remaining balance due and owed by the tenant. This bill contains an emergency clause and incorporates HB 1669.
  • Senate Bill 905 – Landlord and tenant; tenant’s remedy by repair. This bill permits a tenant, under certain circumstances, to have a condition that constitutes a material noncompliance by the landlord with the rental agreement or with provisions of law, or that if not promptly corrected will constitute a fire hazard or serious threat to the life, health, or safety of occupants of the premises, remedied by a third-party licensed contractor or a licensed pesticide business. The bill provides that, unless the tenant has been reimbursed by the landlord, the tenant may deduct from rent the actual costs incurred, not to exceed the greater of one month’s rent or $1,500, after submitting to the landlord an itemized statement accompanied by receipts for purchased items and third-party contractor or pest control services.

Solar

  • House Bill 655 / Senate Bill 870 – Special exception for solar photovoltaic projects. This bill authorizes a locality to include reasonable regulations and provisions in its zoning ordinance for a special exception for any solar photovoltaic (electric energy) project. The bill authorizes the governing body of such locality to grant a condition that includes (i) dedication of real property of substantial value or (ii) substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the granting of a conditional use permit, so long as such proffered conditions are reasonably related to the project.
  • House Bill 656 / Senate Bill 875 – Solar energy projects; national standards. This bill authorizes a locality to include in its zoning ordinance provisions to incorporate generally accepted national standards for the use of solar panels and battery technologies for solar photovoltaic (electric energy) projects.
  • House Bill 657 – Comprehensive plan; solar facilities review. This bill provides that certain solar facilities shall be deemed to be substantially in accord with a locality’s comprehensive plan if the locality waives the requirement that solar facilities be reviewed for substantial accord with the comprehensive plan.
  • House Bill 1131 / Senate Bill 762 – Solar energy projects; revenue share assessment. This bill authorizes any locality by ordinance to assess a revenue share of up to $1,400 per megawatt on any solar photovoltaic (electric energy) project with certain exceptions and expands an existing tax exemption for such projects under certain conditions. The bill authorizes such revenue share to apply to existing projects only if certain conditions are met.
  • House Bill 1434 / Senate Bill 763Local tax exemption; solar energy equipment. This bill changes the local property tax exemption for solar energy projects from an 80 percent exemption for the life of the project to a step down scale of an 80 percent exemption in the first five years, 70 percent in the second five years, and 60 percent for all remaining years in service. The change applies to solar energy projects that are either (i) projects greater than 20 megawatts and less than 150 megawatts for which an initial interconnection request form has been filed with an electric utility or a regional transmission organization after January 1, 2015, and first in service on or after January 1, 2017, and (ii) projects equaling more than five megawatts and less than 150 megawatts for which an initial interconnection request form has been filed on or after January 1, 2019. The bill provides that if a locality assesses a revenue share on a project, the step down scale shall not apply. The bill extends the sunset date after which new projects may not qualify for the exemption from January 1, 2024, to July 1, 2030
  • Senate Bill 1039Classification of solar energy and recycling equipment. This bill provides that, for purposes of the real property tax exemption for certified solar energy and recycling equipment, the exemption shall be retroactive to the date of installation if the taxpayer obtains certification from the Department of Environmental Quality within one year of installation. Under current law, the exemption is effective in the next tax year after the taxpayer obtains certification.

Taxes and Assessments

  • House Bill 535 – Real estate with delinquent taxes or liens; sales by nonprofit organizations. This bill provides that a nonprofit organization that acquires real estate with delinquent taxes or liens pursuant to the appointment of a special commissioner may sell to eligible purchasers either (i) both the land and structural improvements on a property or (ii) only the structural improvements of a property, without the land. The bill provides that a sale of only the structural improvements is permissible only if (a) the improvements are subject to a long-term ground lease with a community land trust and (b) the community land trust retains a preemptive option to purchase such improvements at a price determined by a formula that ensures that the improvements remain affordable in perpetuity to low-income and moderate-income families.
  • House Bill 537 / Senate Bill 727 Real estate tax exemption for property in redevelopment or conservation areas or rehabilitation districts. This bill increases the maximum duration of a local real estate tax exemption for structures in redevelopment or conservation areas or rehabilitation districts from 15 to 30 years.
  • House Bill 755 Real property taxes; blighted and derelict properties in certain localities. This bill provides that, in certain localities, blighted properties and derelict structures shall constitute a separate class of property for local taxation of real property. Such certain localities may, by ordinance, levy a tax on blighted properties and derelict structures at a rate that exceeds the general real property tax rate by five and 10 percent, respectively. Any tax levied pursuant to such an ordinance shall be imposed upon a determination by the real estate assessor that a property constitutes a blighted property or derelict structure. The bill also provides that, in such certain localities, delinquent tax lands may be sold six months after the locality has incurred abatement costs for buildings that have been condemned, constitute a nuisance, are a derelict building, or are declared to be blighted. The bill contains technical amendments.
  • House Bill 1580Deeds not taxable; deeds involving only spouses. This bill replaces the term “husband and wife” with “spouses” for purposes of the recordation tax exemption for certain deeds.
  • House Bill 1582 Delinquent tax lands; threshold for nonjudicial sale. This bill raises the assessment threshold at which a local treasurer or other officer responsible for collecting taxes has general authority to sell real property with over three years of delinquent taxes from less than $5,000 to no more than $10,000 and extends such authority to improved as well as unimproved parcels of real property. The bill raises the assessment range at which such officer may sell parcels of real property with over three years of delinquent taxes and that meet certain criteria from at least $5,000 but less than $20,000 to more than $10,000 but no more than $25,000. The bill increases the size of unimproved parcels that may be sold from less than 4,000 square feet to one acre or less.

Zoning and Land Use

  • House Bill 150 –Derelict residential buildings; civil penalty. This bill allows certain localities to impose a civil penalty not exceeding $500 per month on owners of derelict residential property that have not submitted a required plan to renovate or demolish the derelict structure. The bill prohibits the total of such fee from exceeding the cost to demolish the building.
  • House Bill 549 / Senate Bill 340 – Overgrown vegetation; local authority. This bill authorizes any locality within Planning District 23 [Hampton Roads] to include provisions for cutting overgrown shrubs, trees, and other such vegetation in an ordinance requiring certain landowners to cut the grass, weeds, and other foreign growth on certain property.
  • House Bill 505 – Board of zoning appeals; writ of certiorari. This bill provides that once the writ of certiorari is served in response to a petition from a party aggrieved by a board of zoning appeals decision, the board of zoning appeals shall have 21 days or as ordered by the court to respond.
  • House Bill 554 – Zoning for wireless communications infrastructure. This bill authorizes a locality to disapprove an application submitted for an administrative review-eligible project or for any zoning approval required for a standard process project that proposes to locate a new structure, or to co-locate a wireless facility, in an area where all cable and public utility facilities are required to be placed underground by a date certain or encouraged to be undergrounded as part of a transportation improvement project or rezoning proceeding as set forth in objectives contained in a comprehensive plan, on grounds that an applicant has not given written notice to adjacent landowners at least 15 days before it applies to locate a new structure in the area.
  • House Bill 585 – Comprehensive plan; transit-oriented development. Requires that each city with a population greater than 20,000 and each county with a population greater than 100,000 consider incorporating into the next scheduled and all subsequent reviews of its comprehensive plan strategies to promote transit-oriented development for the purpose of reducing greenhouse gas emissions through coordinated transportation, housing, and land use planning.

[1] See also Mattingly, Justin and Mel Leonor, New laws set to take effect on Wednesday reflect Dem’s agenda, Richmond times Dispatch (June 28, 2020, A1).

[2] Id.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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