Common Legal Questions and
Answers
Blake Hegeman
VAR Legal Counsel
Advertising
• What are my disclosure obligations for online
and print advertising?
Advertising
Online ads for a firm must have:
• Firm name;
• City and state of main office; and
• All jurisdictions in which the firm is
presently licensed
Online ads for a licensee (not a firm) must have:
• Licensee’s and firm’s name;
• City and state of the licensee’s office (not necessarily firm’s main office);
and
• Jurisdiction(s) in which licensee holds a license, active or not.
For all other ads, the requirement is simply this: The firm’s name must be
clearly and legibly displayed. No address, states of licensure, phone, etc.
— just firm name.
Disclosure
• What are material adverse facts pertaining to
the physical condition of the property?
Disclosure
The Code of Virginia obligates listing agents to disclose to prospective
purchasers all “material adverse facts pertaining to the
physical condition of the property which are actually known” by
the listing agent.
• Material. Something is material if it could affect the decision of a
reasonable person about whether to buy.
• Adverse fact. Contrast this with “defect.” The difference may be along the
lines of polybutylene pipes and fittings that haven’t leaked yet. Their
existence is probably an adverse fact (buyers will want to check it
carefully, especially the fittings) but not a defect if everything is properly
functioning now.
In short, at least consider that “adverse fact” may be more broadly
construed than “defect.”
Dislcosure
Pertaining to the physical condition of the property. The statute provides that “the
term ‘physical condition of the property’ shall refer to the physical condition of
the land andany improvements thereon, and shall not refer to: (i) matters outside
the boundaries of the land or relating to adjacent or other properties in proximity
thereto, (ii) matters relating to governmental land use regulations, and (iii)
matters relating to highways or public streets” (section 54.1-2131B).
Actually known by the licensee. When do you actually know something? First,
remember that only material issues are subject to the obligation to disclose.
Remember that receipt of the entire inspection report probably imposes a duty to
read it and decide what is and is not material. It may also be at odds with a prior
report, and may be prepared by a high-strung inspector.
With dueling inspectors, try to put the two together, which resolves a large
majority of all conflicts. If the two still don’t agree, a third opinion may be
necessary.
Defective Drywall
Licensees shall treat all prospective buyers honestly and shall not
knowingly give them false information. A licensee engaged by a seller shall
disclose to prospective buyers all material adverse facts pertaining to the
physical condition of the property which are actually known by the
licensee. If a licensee has actual knowledge of the existence of defective
drywall in a property, the licensee shall disclose the same to the
prospective buyer. For purposes of this section, "defective drywall"
means all defective drywall as defined in § 36-156.1. As used in this
section, the term "physical condition of the property" shall refer to the
physical condition of the land and any improvements thereon, and shall
not refer to: (i) matters outside the boundaries of the land or relating to
adjacent or other properties in proximity thereto, (ii) matters relating to
governmental land use regulations, and (iii) matters relating to highways
or public streets. Such disclosure shall be made in writing. No cause of
action shall arise against any licensee for revealing information as
required by this article or applicable law. Nothing in this article shall limit
in any way the provisions of the Virginia Residential Property Disclosure
Act (§ 55-517 et seq.).
Disclosure
As a listing agent do I have to disclose
that someone has been murdered in the
house?
Disclosure
• The Code of Virginia makes clear that licensees are
not obligated to disclose whether a property was the
site of a homicide, suicide, felony, or other act
having no effect on the improvements.
• However, because neighbors will talk, the listing
agent and seller should consider getting this
information to the buyer in their own way.
• Agent may not disclose whether previous occupant
had HIV or AIDS.
EMD
I am the buyer’s agent and holding the EMD.
The deal has fallen through because the
seller has clearly defaulted; may I release the
EMD to my client even though the seller
won’t sign a release of the funds?
EMD
No. A licensee holding the EMD is bound by the
Virginia Real Estate Board’s regulations that provide,
in a nutshell, that you may not disburse without
either the written consent of both the buyer and
seller, or a court order.
This is because the party holding the EMD is an
escrow agent, and escrow agents are bound not by
their affiliation to one of the parties but to the
faithful handling of the money entrusted to them.
Compensation
My agent left the firm before the deal closed.
Can I pay her when the deal closes?
Can I pay her directly?
POA
Does delivery of the POA packet to the buyer
agent start the three-day rescission period?
POA
Yes. Delivery to the agent constitutes delivery
to the buyer unless specific instructions are
provided to the contrary.
POA
The seller requests that my buyer client
waive his right to receive a POA packet. Is
that legal?
POA
The POA Act makes clear that buyers may not
waive their rights under the Act, even by
written agreement.
Contracts
What is the difference between terminating
and releasing a contract?
Contracts
Termination is generally the unilateral act of a
party declaring the contract at an end.
A termination does not rely upon the
agreement of the other party but is a
unilateral act.
Contracts
A release is a mutual act of the parties by
which one or more of the parties are released
from obligations under the contract pursuant
to whatever agreements the parties have
reached.
Agency Law
– Provide written agency and brokerage agreements to
consumers; (Effective 2012)
– Provide a list of services that the agent will provide to
customers; (Effective 2012)
– Provide a schedule of fees that will be associated;
(Effective 2012)
– Provide enhanced disclosure of limitations on what a Dual
Agent can and cannot do for parties to a transaction.
There are exceptions for commercial agents and
independent contractors. (Effective 2012)
– Take a 3-hour course on the provisions of the Agency
statute and the changes made in the legislation. (Course
must have been completed for first license renewal after
July 1, 2012)