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Disclosure Packets and Resale Certificates Revisited: Recent Statutory Amendments

Bills recently passed in the Virginia General Assembly extend the list of items for inclusion in property owners’ association disclosure packets and condominium association resale certificates, and also broaden non-association disclosure requirements.  Effective July 1, 2013, disclosure packets may or must (depending on the item) include the following new items:

 Restrictions on Solar Panels (HB 2305): Disclosure statements for lots within property owners’ associations and resale certificates for condominiums must include a statement setting forth any restriction, limitation, or prohibition on the right of a unit owner or lot owner to install or use solar energy collection devices on the owner’s property or unit. Va. Code §§ 55-79.97(C)(17), 55-509.5(A)(12).

Further, Va. Code  § 55-519(B)(9) provides that the disclosure form required under the Virginia Residential Property Disclosure Act (a Virginia law that spells out, among other things, certain disclosures that most sellers of property must provide, regardless of whether the property is within a community association) must include language to notify purchasers that by delivering the residential property disclosure statement, the owner makes no representations with respect to any right to install or use solar energy collection devices on the property.

Of course, it is always incumbent on the purchaser to read the declaration, bylaws, and rules and regulations for a community association to determine whether the association has established any restrictions concerning the size, place, and manner of placement of solar energy collection devices; or, for an association with a restrictive covenant adopted prior to July 1, 2008, any restriction or prohibition on the installation or use of a solar collection device. 

Disclosure of Qualification for Federal Financing (HB 1807):  Disclosure statements for lots within property owners’ associations and resale certificates for condominiums must include a statement indicating any known project approvals currently in effect issued by secondary mortgage market agencies (e.g. Fannie Mae, Freddie Mac). Va. Code §§ 55-79.97(C)(17), 55-509.5(A)(17). This requirement may prove to be a source of confusion for many associations, so they should work closely with their legal counsel to ensure compliance. 

The following new residential disclosure requirements do not specifically pertain to community associations, but rather apply to most properties regardless of whether they are within community associations:

Tourism Activity Zones (HB 1521): Pursuant to a new statute, Va. Code § 15.2-982, a locality may designate tourism activity zones, which must be shown on its zoning map. An owner of a residential property located partially or wholly within a designated tourism activity zone established pursuant to Va. Code § 15.2-982 may disclose that the property is within such zone with a description of potential impacts associated with such location, such as the impacts caused by special events, parades, temporary street closures, and outdoor entertainment activities. Va. Code § 55-519.3.

Disclosure of former methamphetamine laboratory (HB 1615): Finally, a property owner who has actual knowledge that his residential property was previously used to manufacture methamphetamine but that the property has not been cleaned up in accordance with the guidelines to be established pursuant to Va. Code § 32.1-11.7, must disclose such fact to prospective purchasers. Va. Code § 55-519.3. Note that this statute will not take effect until July 1, 2014.

In light of the changes that will take effect on July 1, 2013, associations should consult with their legal counsel to ensure that they are in a position to provide owners with the proper and current disclosure packets or resale certificates, and owners of residential properties should consult legal counsel regarding the disclosures they must make in certain instances.


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