Keep Calm and Disclose On: Ten Things You Need to Know About the Virginia Resale Disclosure Act

On March 23, 2023, the General Assembly of Virginia amended the Property Owners’ Association Act, Condominium Act, Real Estate Cooperative Act, and Horizontal Property Act in the name of standardization, such changes to be effective July 1, 2023. The General Assembly removed the disclosure sections of each Act and created the new Virginia Resale Disclosure Act (“RDA”) to govern disclosures for residential property subject these other Acts. The purpose of the RDA is to create standard resale certificates between different kinds of residential community associations. The Virginia Common Interest Community Board (“CICB”) was tasked with developing and adopting a standard resale certificate form.

On June 6, 2023, the CICB posted the new twenty-five-page resale certificate form to its website. Associations must utilize this new disclosure certificate for all resale transactions with contracts ratified after July 1, 2023. The content of the form covers many of the disclosures previously required under prior law; however, the items to be disclosed have been expanded so Associations are cautioned to read the fine print to ensure all required disclosures are covered.

Read more to get the information community associations and community association managers need to keep cool while meeting a very tight deadline.

1. What kinds of properties will the RDA affect?

The RDA will affect the resale of properties that are subject to community associations for common interest communities. This includes residential condominiums, townhouses, cooperatives, and single-family homes within a planned community or development.

2. What kinds of transactions will the RDA affect?

If a property is subject to the RDA, then the RDA will apply to the sale of such property if the contract was ratified after July 1, 2023.

3. Will there be any transactions that do not require the disclosure of a resale certificate?

The RDA does not require a resale certificate be provided for sales by a declarant, a gift, a transfer pursuant to a court order, a foreclosure transfer, a sale pursuant to an auction if the auction disclosed the resale certificate at the time of the action, or a transfer of a unit in a development with no residential units.

4. What is the relationship between the RDA and the CICB?

The RDA gives the CICB the authority to administer and enforce the RDA, including the authority to limit fees for the preparation of resale certificates and issuance of the standardized resale certificate form.

5. Where can I find the new resale certificate form?

You can access the resale certificate form on the CICB website. A direct link to the resale certificate is linked here.

6. How should I complete the resale certificate?

I have compiled a checklist of documents you will need to complete the resale certificate. I recommend you compile all documents before preparing the certificate. If you need clarification on what a question is asking for, you can reach out directly to the CICB to obtain additional clarity.  Some of the questions can be very broad and you may need to consult your community association’s attorney about how to best answer them.

7. Can my association charge fees to prepare this resale certificate?

Your association may only charge fees to prepare and disclose the resale certificate if it is registered with the CICB, has filed its most recent annual report with the CICB, is current in paying any fees and assessments to the CICB, and provides the option for purchasers to receive the resale certificate electronically.  You will first need to determine whether your association meets all the criteria above before determining what fees it may charge.

8. My association meets all those criteria—how should I determine what fees it may charge?

The CICB is authorized to establish and adjust maximum fees for preparing and disclosing resale certificates. The maximum fees were most recently adjusted on January 12, 2023. The fees differ between condominium associations and property owners’ associations. For property owners’ associations, the maximum fees also differ between professionally managed associations and non-professionally managed associations.

9. My association is a property owners’ association—what fees can it charge?

You can find the January 12, 2023 update for maximum fees allowed for professionally managed property owners’ associations on the CICB website here. You can also find the maximum fees allowed for property owners’ associations that are not professionally managed by clicking this link.

10. My association is a condominium association—what fees can it charge?

You can find the January 12, 2023 update for maximum fees allowed for condominium associations on the CICB website here.