The Virginia legislature passed several provisions during the recent legislative session that will affect the real estate industry, if they are signed into law by Gov. Charles S. Robb, including bills to strengthen time-share laws, regulate membership campgrounds and increase requirements on landlords and condominium developers.
The Virginia Real Estate Time-Share Act was amended through a series of revisions extending the scope of the act to all time-share projects located or marketed in Virginia, and toughening the penalties for violating the law.
Developers would be required to insure completion of projects with bonds and protect deposits from buyers in bonded escrow accounts. The Virginia Real Estate Commission was also given additional enforcement power to see that consumers are protected as the law requires.
The Virginia Condominium Act was amended through passage of a bill sponsored by Del. Marian Van Landingham (D-Alexandria) to require a seller of a condominium unit to open the financial records of the condominium association to contract purchasers.
Landingham sponsored the bill at the request of the Alexandria Landlord-Tenant Board, which had concerns that condo buyers could not adequately judge the financial health of a development without being allowed to view the condominium association's records.
The legislature also passed a bill extending the state's protection against retaliatory evictions to tenants living on month-to-month leases.
Sen. Wiley F. Mitchell Jr. (R-Alexandria) sponsored the bill after an Alexandria General District Court judge ruled last December that while he found that a tenant had been evicted as retaliation, he could not prosecute the landlord because tenants on month-to-month leases were not covered by the state's protection against retaliatory evictions.
Del. James F. Almand (D-Arlington) chairman of the housing subcommittee for the House Committee on General Laws sponsored a bill that expanded coverage of the state's landlord-tenant laws to anyone who owned at least four rental units. In the past the state's law extended only to landlords that owned four units in the same development.
"We took that clause out because hardly anybody owned four units in the same development," said Almand. "But a lot of people own units scattered all over and we felt the law should be expanded to include them."
The legislature passed a bill requiring any landlord to refund security deposits to tenants when they moved, even if the new landlord did not own the property when the tenant first moved in.
Almand said the legislature also shortened the period landlords could hold application fees from 20 days to 10 days. If a rental applicant has been rejected for a project, said Almand, he needs his money to apply to another project.
Landlords are allowed to deduct from the returned amount the cost of doing a credit check on the applicant. Almand said that application fees in the Northern Virginia area usually equal several months rent, though they are sometimes as low as $20.
The legislature passed an amendment to the state's fair housing law to correct an amendment made last year. That amendment made it illegal in Virginia to discriminate against the elderly, handicapped or parents of minor children, though the legislature added that nothing in that provision would prohibit complexes that were restricted to all elderly or all adults.
Developers complained, however, that last year's amendment made it illegal for a project to have one section that was all adult or all elderly.
"We added a provision that said there could be sections of a complex that were restricted to elderly or adult," said Almand. "We didn't want the families with children to be moved out of such complexes because of last year's amendment."
The legislature also passed a provision that limits what part of a tenant's record a landlord can give out to a third party. Previously, said Almand, there were no privacy protections on tenant records.
In an effort to accommodate the Marriott Corp., which is planning to build a continuous-care housing facility for the elderly that will be marketed as a condominium, the legislature changed the condominium code to prevent the members of the condominium association for such a condominium from breaking contracts made during the developer's period of control.
Under the former condo law a condominium association is allowed to rescind any contracts over a year in length made by the developer before he turned over control of the project to the owners. In the case of condominiums that offer continuous health services, owners now will not be restricted from breaking those contracts.
Almand said that because of the unique structure of continuous-care facilities for the elderly it was necessary for the developer to write long-term health care contracts with buyers, and that the legislature felt those shouldn't be altered later.
The legislature also moved to regulate the burgeoning industry of membership campgrounds, imposing registration requirements and consumer protections similar to those required for time-share developments.
Jean Bass, director of the Virginia Office of Consumer Affairs, said that the new law would go into effect on July 1, and would extend to any membership contract entered into after that date. She said that the law would also extend to any campground advertising in Virginia
Bass said that membership campgrounds are generally campgrounds that sell a right to use their facilities on a first-come, first-served basis. She said few of the campgrounds sell a specific site, or even a specific time to use the campground. Many of them offer extensive recreational facilites, and most sell memberships for between $4,000 and $11,000.
Under the new law membership campgrounds would be required to register with the Virginia Commission of Agriculture and Consumer Services. The owner would have to offer buyers a prospectus outlining the terms of the facilites and membership.