Virginia parts ways with D.C. and Maryland on uniform sales contract

Real Estate

Many locals cringe at the thought of crossing the Potomac from Maryland to Virginia, or vice versa. Some of us are so repulsed by the thought of making the white-knuckled drive to our border state that it is not unusual to find local online dating profiles that specifically mention the desire to find a mate on the same side of the river.

So I couldn’t help but wonder whether an upcoming break away by Virginia from the “one size fits all” regional real estate sales contract could create another divide between us.

A little over a decade ago, the real estate associations covering the District, Virginia and Maryland (mostly Montgomery and Prince George’s counties) agreed to collaborate on the creation and use of a unified core contract for residential real estate transactions, known as the regional contract. It covered the agreed-upon basics. Each region then added a jurisdictional addendum to the contract to customize it to their unique local laws.

The original purpose of the regional contract was mostly to create some continuity and ease of training for real estate agents conducting business in all three jurisdictions.

Now Virginia wants out.

As of Jan. 1, agents who are licensed and doing business in Virginia are required to use the newly created residential sales contract on transactions in Virginia only.

Agents will continue to use the regional contract on transactions in D.C. and, as usual, can chose between the regional contract or the Maryland Association of Realtors contract for transactions in Montgomery and Prince George’s County.

Why the back pedal by Virginia on the decade long alliance?

According to Matthew Rathbun, the 2014 Standards Forms Committee chairman for the Northern Virginia Association of Realtors and executive vice president of Coldwell Banker Elite in Fredericksburg, Va., the use of the regional contract is an outmoded solution.

In a video recently released by the Northern Virginia Association of Realtors, Rathbun says that there are four primary reasons for making the choice to defect. “To expire an obsolete model of inter-jurisdictional core contracts, to reduce the length of the contract, to reduce confusion and to reduce liability.”

“Every three years, the three jurisdictions would gather to debate and argue over the updating of the form,” Rathbun said. “We ended up having to create a longer Virginia jurisdictional addendum to [override] any conflicting stipulations in the core contract.”

According to Rathbun, agents had to be diligent in ensuring that the proper jurisdictional addendums were attached to ensure compliance with local laws. The intended meaning of stipulations and contingencies, he said, were frequently not clear to all parties — should the meaning be interpreted based upon the language in the core contract or in the jurisdictional addendum?

Are Maryland and the District feeling like a dissed date?

“I understand why Virginia decided to go this route,” said Greg Ford, 2014 president of the Greater Capital Area Association of Realtors (GCAAR) and an agent with Keller Williams Capital Properties in Bethesda. “It seemed to work in theory. But over time, it became more confusing rather than helpful.”