Virginia parts ways with D.C. and Maryland on uniform sales contract
Jill Chodorov | 1/5/2015, 11:37 a.m.
“Five area real estate boards were involved in making updates or changes to the regional contract, including Herndon, GCCAR, PGCAR [Prince George's Association of Realtors], Dulles and NVAR [Northern Virginia Association of Realtors],” Ford said. “It was a large undertaking to get all of them to agree on any changes.”
Local settlement companies that work daily on residential settlements are supportive of the change.
“A false confidence was created by using the same contract in all three jurisdictions,” said Kellye Clarke, a settlement attorney with Hometown Title & Escrow in Alexandria. “Many agents think doing real estate transactions in each jurisdiction is the same, but it is not.”
For example, many contingencies in a contract function differently from jurisdiction to jurisdiction.
In a Virginia home inspection contingency, the parties agree on a number of days in which home inspection items can be negotiated. At any time during that negotiation period, the purchaser or seller can modify or rescind any offer or counter offer to reach mutually beneficial terms. At the end of the negotiation period, if no agreement has been made, the purchaser can void the contract or remove the home inspection contingency and the contract remains in full force.
In Maryland and D.C., however, each party has three days to respond to the other party during the home inspection contingency negotiations, with no absolute deadline. Within three days after delivery of a notice from one party, the other party may accept the terms, deliver notice with a counter offer, or deliver notice to void the contract. Failure to respond within three days will result in acceptance of the terms in the most recent notice.
Another significant difference pertains to property condition disclosures. In Virginia, the Residential Property Disclosure Statement simply states that the owner makes no representations regarding the condition of the property. Owners are only required to disclose any zoning or building code enforcements that are pending on the home.
Virginia is a caveat emptor state — let the buyer beware.
In Maryland and D.C., on the other hand, owners can elect to disclose or disclaim. A Maryland Residential Property Disclosure Statement is filled out by the owners, in which they disclose the age and condition of the roof, electrical system, plumbing system, heating and air conditioning, foundation, insulation, water supply, etc.
Even if owners elect to disclaim when selling a home in Maryland or D.C., they must still disclose any latent defects that are known to the owner. Latent defects are items that purchasers could not ascertain on their own and/or that would pose a threat to the health or safety of the purchaser.
Many agents support Virginia’s decision to part ways with its neighbors.
“It would be nice to have one form that speaks to all jurisdictions,” said Jeff Ganz, a salesperson licensed in Virginia and Maryland and a former member of the now defunct GCAAR Contract and Clause Committee. “But the truth of the matter is that each jurisdiction does things differently.”
How do the changes in Virginia impact buyers and sellers?