New 2016 Laws Impacting Commercial Real Estate in Virginia

Another session of Virginia's General Assembly has now come and gone, adding one more chapter to the nearly four hundred year history of the country's oldest law-making body.  Over three thousand bills were proposed in the 2016 Session, and from this bevy of legislation there were 1,803 bills passed.[1]  Most of these new laws went into effect as of July 1, 2016, now ensconced in Virginia's statutory code.

With the dust settled, the following additions or revisions to the Virginia Code are among the most notable from the perspective of those in the commercial real estate field.  Commercial real estate practitioners would be well served to familiarize themselves with these new laws, as many will have a direct impact on the manner in which business is conducted.

The list below includes excerpts from bill summaries prepared by the Virginia Division of Legislative Services.  For the full summaries, click on the applicable bill number.

New Proffer Legislation

• Senate Bill 549 - Conditional zoning; provisions applicable to certain rezoning proffers. One of the most significant pieces of legislation for both developers and local governments alike was SB549, now codified at Virginia Code § 15.2-2303.4, which concerns proffers made in residential rezonings.  In short, the new law requires a proffer to be specifically attributable to the underlying property.  When a proffer is deemed "unreasonable" under the provisions of the statute, a cause of action may accrue to the landowner, enabling the recovery attorney's fees and costs.  Importantly, this statute is prospective in nature and applies only to applications filed after July 1, 2016.

Real Estate Transactions

• House Bill 367 – Nonconforming uses; uses that do not conform to zoning prescribed for district, etc. This bill amended and reenacted Virginia Code 15.2-2307(C), and in so doing provides additional protections to businesses with respect to nonconforming zoning.  The amended statute now states that in the event a business's use is found to be nonconforming, the locality shall permit the business to apply for a rezoning or special use permit without charge if (1) a business license was issued by the locality for such use; and (2) the holder of that business license has operated continuously in the same location for 15 years and paid all applicable taxes.

• House Bill 446 - Civil judgment procedure; damages, witnesses, failure of defendants to appear. This bill amended and reenacted Virginia Code §§ 8.01-128 and 01-375 pertaining to civil judgment procedures and damages in unlawful detainer claims.  Specifically, the new law increased the time during which a plaintiff for whom a verdict or judgment and grant of possession is entered on an unlawful entry or detainer claim may continue the case, from 90 to 120 days.  Furthermore, managing agents were added to the list of individuals exempt from being excluded as witness in unlawful detainer actions brought in general district court.

• House Bill 741 – Virginia Board for Asbestos, Lead, and Home Inspectors; licensing of home inspectors. This bill amended numerous provisions of Virginia's statutes governing Asbestos, Lead, and Home Inspection Contractors and Workers (as well as 55-519 of Virginia's Residential Property Disclosure Act).  Beginning July 1, 2017, home inspectors must be licensed (not certified) by the Virginia Board of Asbestos, Lead, and Home Inspectors.  Regulations implementing this licensure requirement must be promulgated by the Board no later than the July 1, 2017 effective date.

• Senate Bill 478 - Eminent domain; reimbursement of costs. This bill amended and reenacted Virginia Code § 25.1-245 and added 25.1-245.1.  These new provisions provide that in eminent domain proceedings, the landowner may now seek an award of its costs and fees when the final amount awarded to the landowner at trial is 30 percent or more great than the original written offer.  Again, this statute is prospective and applies only to condemnation proceedings filed after July 1, 2016.

Tax Updates

• House Bill 148 – Real property tax assessment; date to fix tax rate. This bill amended and reenacted Virginia Code §58.1-3321. The new law changes the date by which a county, city, or town is required to fix the real property tax rate for taxes due on or before June 30.  The deadline has been extended by one month, from April 15 to May 15.
• House Bill 596 – Recordation tax; exemption. This bill amended and reenacted Virginia Code § 58.1-811 and repealed § 58.1-806.  Under this new law, certain deeds of partition and deeds transferring property pursuant to a divorce decree are exempted from recordation tax.
• House Bill 643 – Department of Taxation; limitations on collecting taxes. This bill amended and reenacted Virginia Code § 58.1-1802.1. The law now provides that the Department of Taxation shall cease efforts to collect a tax seven years after assessment of the tax.  Like many of the foregoing, this new law is prospective in nature and applies only to tax assessments made on or after July 1, 2016.

Other Notable Additions

• House Bill 114 – Agritourism; notice posted on signs to read "ATTENTION" rather than "WARNING" at locations. This amendment of Virginia Code § 3.2-6402 should be of particular interest to those in the "agritourism" business.  For those conducting "agritourism activities" on their farm or ranch, including businesses such as wineries, historical sites, or "harvest-your-own activities," notice must be posted that contains a specific warning regarding the inherent risks of these activities.  As amended, the statute now permits property owners to choose between the terms"WARNING" and "ATTENTION" on the signage.  If this notice is not properly provided as required by this statute, the operator cannot invoke the immunity from liability for injury or death of a participant that would otherwise be available. 

• House Bill 812 – Limited Residential Lodging Act; penalty. Finally, this hotly anticipated and widely reported bill was not passed in the General Assembly's most recent session, but instead was continued so as to allow a study by the Virginia Housing Commission. The bill addresses the burgeoning business of temporary residential lodging provided through companies such as Airbnb. The bill would enact a new law, titled the Limited Residential Lodging Act, which would be added to Title 55 of the Virginia Code at §§ 55-248.53 through 55-248.57.  The new Act would allow property owners to rent out their homes or portions thereof for charge, either individually or through a hosting platform, for periods of less than 30 days, under certain circumstances.  In conducting its review of this bill, the Housing Commission is required to convene a work group with representation from the hotel industry, hosting platform providers, local government, state and local tax officials, property owners, and other interested parties to explore issues related to the proposed Act.  The work group is directed to complete its study by December 1, 2016 with the goal of developing draft legislation for consideration by the 2017 Session of the General Assembly.  As such, only time will tell if, and to what extent, Virginia will make accommodations for this corner of the ever-expanding 'sharing economy.'

For assistance with commercial real estate issues, please contact Sands Anderson's Commercial Real Estate attorneys.

1 See Mercer, David and Lucia Anna Trigiani, 2016 Virginia General Assembly Selected Real Estate Legislation, Virginia's Real Estate Updates - Legislation and Case Law (from Annual Real Estate Practice CLE 2016).