Virginia Law

A. After a publicly supported housing owner delivers a written termination notice required by § 36-177, or after the date that such notice would be required from each owner, a locality that has adopted an ordinance pursuant to § 36-177 or its qualified designee appointed pursuant to § 36-178 may record in the land records of the locality in which the property is located and deliver to the owner a notice of right of first refusal in a form prepared by the locality. Such form shall include:

1. The legal description of the publicly supported housing;

2. An acknowledgement that the locality holds the right of first refusal to purchase the publicly supported housing or that such right has been assigned to a qualified designee and may be reassigned through a subsequent notice if the owner has not yet accepted a bona fide offer to purchase from a third-party buyer;

3. A list of each exemption to the right of first refusal provided in subsection D, including the determined length of extended affordability required of the third-party buyer for an exemption and a statement that the locality may choose to negotiate an alternative length of time with such buyer;

4. A statement that any bona fide offer to purchase the publicly supported housing shall acknowledge that the property is subject to the right of first refusal under this chapter;

5. A statement that the right of first refusal expires 24 months after the termination of affordability restrictions; and

6. A declaration that a copy of the recorded notice of right of first refusal was promptly delivered to the owner by the locality or qualified designee by electronic delivery, in-person delivery, or registered or certified mail with proof of such delivery attached.

The form shall be executed and acknowledged by the locality or qualified designee in a manner provided for the acknowledgement of deeds.

B. A locality may require that, within five business days after the owner has accepted a bona fide offer to purchase from a third-party buyer for the publicly supported housing that is subject to a recorded notice of right of first refusal, an owner send notice of the offer acceptance, in a format prescribed by the locality, to the locality and qualified designee if applicable. Such notice shall contain a copy of the third-party buyer's offer or the terms and conditions of the offer.

1. Once such notice is received or the identity of the third-party buyer is made known to the locality, the locality cannot assign the right of first refusal to a qualified designee or reassign the right of first refusal to another qualified designee.

2. The locality or qualified designee named on the notice of right of first refusal recorded for the property shall have 30 days from the date such notice is received to exercise a right of first refusal by delivering a matching offer to purchase the property in a format prescribed by the locality. The matching offer shall contain a commitment from the locality or qualified designee to preserve the property as affordable for at least 15 years. The owner shall accept the first matching offer such owner receives from the locality or qualified designee under this section.

3. A locality or qualified designee's offer is a matching offer if it has the same terms and conditions as the third-party buyer's offer to purchase, except that such locality or qualified designee may consider a purchase offer as a matching offer, notwithstanding a conflicting term, that includes:

a. An earnest money deposit that is no less than the least of the third-party buyer's offer or four percent of the sales price;

b. That the earnest money deposit is refundable until the earlier of 90 days or the date of closing in the event of a good faith failure of the locality or qualified designee to obtain financing;

c. Any other term that the property owner has agreed to waive; and

d. A commitment to maintain the affordability of the property as required by this section.

C. A locality may require that an owner of publicly supported housing subject to the notice of right of first refusal pursuant to subsection A submit to the locality sufficient verification, as defined by the locality, no more than 60 days after sending notice of the acceptance of an offer to purchase from a third-party buyer, that the owner has complied with the provisions of this section. The locality has no more than 60 days from receipt of such verification or when such verification should have been received to notify the owner, by certified mail, return receipt requested, if the locality did not receive the verification or if the locality intends to contest the validity of the verification, at which point the locality may grant the owner another opportunity to comply with the provisions of this section. If the locality finds no contest to the owner's compliance within the 60-day period, a certificate of compliance in accordance with the provisions of this section shall be recorded in the land records of the locality. The certificate of compliance under this section shall contain a legal description of the property, the identity of the owner as the grantor, and an acknowledgment by the owner and the locality in the manner required for acknowledgement of a deed.

D. The provisions of subsection B shall not apply if:

1. The publicly supported housing is not subject to a previously recorded notice of right of first refusal;

2. The third-party buyer agrees in good faith to extend the property's affordability for a certain length of time, as determined by the locality and specified in the notice of right of first refusal filed for the property, and includes such agreement in writing in the offer to purchase the property. The locality may not require more than 30 years of extended affordability to qualify for this exemption unless otherwise required by an alternative contract, program, or financial agreement. The locality may provide an opportunity for the third-party buyer and the locality to negotiate a length of extended affordability alternative to that which was specified in the notice of right of first refusal;

3. The proposed property transfer does not constitute a sale;

4. More than 24 months have elapsed since the termination of the affordability restrictions for the publicly supported housing; or

5. The owner accepted a third-party buyer's offer to purchase the publicly supported housing before a reasonable time after the effective date of the ordinance adopted to implement the provisions of this chapter, as determined by the locality.

E. The provisions of this section are secondary to the terms of the right of first refusal established by a locality through the contribution of local funds to the acquisition, development, or revitalization of publicly supported housing or within the agreements for assistance from locally managed funds or programs.

F. The provisions of this section are secondary to the terms of the right of first refusal by a qualified nonprofit organization at the close of the compliance period for low-income housing tax credits, as authorized by 26 U.S.C. § 42(i)(7) and according to regulations promulgated by the Virginia Housing Development Authority.

G. The locality or qualified designee may bring a civil action against an owner of publicly supported housing for which the locality or qualified designee has recorded a notice of right of first refusal if the owner has violated the provisions of this section, except when a certificate of compliance in accordance with the provisions of this section for that owner was recorded in the land records or the owner was not notified of noncompliance pursuant to the provisions of this section. The court may award punitive damages and provide injunctive relief. The court may award reasonable attorney fees and costs at trial and on appeal to a prevailing plaintiff in an action under this section.

2026, c. 352.