Important Updates From An Experienced Real Estate Lawyer: Major Changes to Virginia Law – Landlords Renting Three or Fewer Units
As a real estate lawyer, I keep track of changes in legislation in Virginia. In 2017, the Virginia General Assembly passed important omnibus revisions to Virginia landlord-tenant law. These revisions, in the form of House Bill 2033 (“H.B. 2033”), became effective as of July 1, 2017. Some of the most significant changes provided for in H.B. 2033 apply to landlords renting three or fewer units. To fully grasp the significance of these revisions, one must first remember that Virginia landlord-tenant law was, prior to July 1, 2017, divided into essentially two chapters:
1) Chapter 13.2 of Title 55 of the Virginia Code – the very technical Virginia Residential Landlord Tenant Act (§ 55-248.2 et seq.) (“VRLTA”). Prior to H.B. 2033, VRLTA applied only to those dwelling units rented out by landlords with four or more units. That being said, any rental agreement could contain express language making VRLTA applicable.
2) Chapter 13 of Title 55 of the Virginia Code – the more general and less technical code provisions in Chapter 13 (§55-225 through 225.13) pertaining to all residential landlord-tenant leases, even VRLTA exempt leases (for lack of abetter or more official term, I will refer to this portion of the Virginia Code “Residential Chapter 13”).
H.B. 2033 stealthily (but considerably) changes the applicability and reach of both chapters. First, H.B. 2033 provides thatthe VRLTA will now apply to all residential leases, with limited exceptions. Even a landlord that owns two or fewer single-family residential dwelling units will be subject to the VRLTA unless the rental agreement contains express opt out language. A landlord renting three units now must comply with VRLTA (remember, prior to July 1, 2017, such a landlord was exempted from VRLTA along with all landlords renting fewer than four unless the lease expressly “opted-in” to the VRLTA). Second, and perhaps most notable and burdensome for affected landlords, the bill amends key sections of Residential Chapter 13 and adds over thirty new sections that now apply to VRLTA exempt residential leases (new provisions include, specifically, § 55-217.1, 55-225.01, 55-225.02, 55-225.11:1, and 55-225.19 through 55-225.48).
In fact, it is clear that by adding so many sections to Residential Chapter 13, the new law is attempting to “close the gap” between how VRLTA exempt leases and VRLTA leases are governed. Such changes to the Residential Chapter 13 include, but are not limited to:
1) dozens of newly defined terms,
2) new security deposits requirements,
3) new lease term requirements,
4) notice provisions, and
5) disclosure provisions.
It is true that in some cases these new rules are slightly less restrictive than some VRLTA rules, however, that does not make these new provisions any less rigid and burdensome. In fact, for some, it is likely that these new rules will present surprises that may result in violations of Virginia law. Prior to the enactment of H.B. 2033, there were a few requirements in the Virginia Code that landlords exempt from the VRLTA had to navigate. Now, many landlords previously exempt from VRLTA will need to be familiar with the law.
Moreover, even for a landlord who previously could opt out of the VRLTA, there are dozens of applicable new provisionsin Virginia Code that previously did not exist. Wharton Aldhizer & Weaver PLC and specifically James (“Jim”) Johnson are experienced in handling many of the challenges of renting your home or your investment property. We recommend that any individual renting or thinking about renting residential units in Virginia, regardless of the number of units, contact an experienced Virginia real estate lawyer to navigate these many changes.