As a result of new legislation, the Residential Property Disclosure Act has been updated and is now more of a true “Buyer Beware” law with four affirmative disclosures.
There have been several recent changes surrounding this update to necessary disclosures. Here’s what you need to know.
In late June, the Virginia Real Estate Board (VREB) released a three-page Buyer Beware form (also known as the Residential Property Disclosure Act form) that included a written list of all of the disclosures. This form represented a significant change over the previous disclosures requirement, creating a new and unnecessary burden on both agents and sellers. To protect the business practices of our members, the Virginia REALTORS® association has worked closely over the past week to have the Department of Professional and Occupational Regulation (DPOR) revert to a one-page VREB disclosure that links to a website containing all of the required disclosures. This disclosure method facilitates the transaction for REALTORS® and sellers while also offering the Buyer Beware consumer protection.
Download a one page guide here.
Download a summary of the VREB form transition here.
Access a special episode of the Caveat REALTOR® podcast here.
Visit DPOR resources directly here:
Why did the form need to change?
In 2017, the Virginia General Assembly passed a law updating the Residential Property Disclosure Act. Changes were made to the related form effective July 1st of this year. VREB created a three-page version of the form, listing all of the required disclosures.
VREB developed a three-page form for the Residential Property Disclosure Statement effective July 1, 2017 to combine all “disclosures under the Residential Property Disclosure Act” into one form. This included the 12 “buyer-beware disclosures” and the 4 “affirmative disclosures” ((i) military air installations; (ii) defective drywall; (iii) pending building or zoning code violations; and (iv) meth labs). The three-page form has caused some confusion in the real estate marketplace.
Why is it better to have a one-page disclosure form?
The Residential Property Disclosure Act has been amended 11 times since it was first put on the books by the 1992 General Assembly. Each time, the legislative amendments were effective July 1 of that given year.
That means the Residential Property Disclosure Statement (the form) has been changed 11 different times over the years, each time on July 1 of a given year, with no problems in the real estate marketplace. This year is no different, with one potential wrinkle.
As always has been the case in the past, the law in effect when your property went under contract applies. So, this year, if the property went under contract prior to July 1, the “old” Residential Property Disclosure Statement applied which was a one-page form directing the buyer to the VREB website (and stating there were no pending building or zoning code violations). No other form is necessary for contracts ratified prior to July 1, 2017.
What did Virginia REALTORS® do to address this situation?
The Virginia REALTORS® association has worked collaboratively with DPOR to:
(i) develop a one-page form for the Residential Property Disclosure Statement modeled after the one-page form in place prior to July 1, 2017;
(ii) eliminate the signature blocks on the three-page Residential Property Disclosure Statement on the VREB website; and
(iii) create a separate form for each of the four affirmative disclosures since each such disclosure is not a common occurrence and there is no need to clutter-up the paperwork on each real estate transaction.
The new VREB disclosure forms are effective on July 10, 2017.
How is this different than the first update about new disclosure rules?
On June 30, Virginia REALTORS® released information regarding the new three-page disclosure form that VREB had created. After working with DPOR, Virginia REALTORS® was able to get a one-page disclosure form, similar to the form available before July 1.
Why is this new update important?
There are two reasons that this change is important. If a seller signed the old one-page form, which contained a link to the required disclosures, the website listed on that form did not contain the updated disclosures. This meant that sellers would need to provide a copy of the new form to buyers and that the buyers may have a new right to terminate the contract if they ratified it after July 1 and did not receive the newest form. Additionally, by listing all of the disclosures on the three-page form, sellers would be forced to provide a new form any time the disclosures changed. Going back to a one-page form that contains a link to the required disclosures, the seller disclosures form would not require updating each time the Residential Property Disclosure Act is updated.
What does it mean if I had a seller sign a disclosure form before July 1? Do I need to have a new form signed?
If the property went under contract prior to July 1, the new disclosure form is not required. If the property went under contract after July 1, any disclosure form provided to a buyer may not have the required disclosures. Review the form that was provided to the buyers to see if it included twelve disclosures or a link to the website that contains twelve disclosures.
What do I, as a listing agent, need to do?
- If the property went under contract prior to July 1, there is nothing you need to do.
- If the property went under contract between July 1 and July 10 and the seller has not provided the buyer with an updated disclosure form, the buyer should be told to review the updated website.
- If the property is still an active listing, you do not need to do anything. Because DPOR has now updated the information on the URL contained in the forms prior to July 1, those disclosure statements are valid again.
- If the seller has not signed a disclosure statement yet, have them sign the new one-page disclosure form.
What do I, as a buyer’s agent, need to do?
Review the disclosure form provided to your buyers by the sellers. If the contract was ratified prior to July 1, the sellers only needed to provide the old, one-page form that linked to a website with 10 disclosures. If the contract was ratified after July 1, or you are working with buyers to submit an offer, the seller should be providing a disclosure form that either contains all twelve of the disclosures on the form, or contains a link to a website containing the twelve disclosures.
What do I need to know as the broker?
Some forms providers, like Virginia REALTORS® updated their libraries to contain the three-page disclosure form. Others may have updated the one-page disclosure form to contain a URL that led to the website containing all twelve statements. If one of these two forms were used, the buyer was provided with the correct disclosures.
However, there was a period of time between July 1 and July 10 where DPOR had two disclosure pages:
- http://www.dpor.virginia.gov/News/Residential_Property_Disclosures/ which contained the ten statements required prior to July 1.
- http://www.dpor.virginia.gov/Consumers/Buyer_Beware_Disclosures/ which contained all twelve of the statements required as of July 1.
DPOR has now updated the old website with the twelve required statements. This means any form that was signed by the seller prior to July 1 will now direct the buyer to the correct website. Any buyer that was provided with a form containing the first URL between July 1 and July 10 did not receive the required disclosures.
The Residential Property Disclosure Act gives buyers a right to terminate the contract if they do not receive the required disclosure statement prior to ratification.