Title 55.1. Property and Conveyances
Subtitle V. Miscellaneous
Chapter 32. Unfair Real Estate Service Agreement Act
Chapter 32. Unfair Real Estate Service Agreement Act.
§ 55.1-3200. Definitions.For the purposes of this chapter:
"Real estate service agreement" or "service agreement" means an agreement between a service provider and the owner of residential real property or a potential buyer of residential real property to provide services, current or future, in connection with the maintenance of or purchase or sale of residential real property. A "real estate service agreement" includes any memorandum, notice, agreement, or similar document that is used by a service provider to cause a service agreement to be recorded.
"Recording" means the act of adding any documents or data that affects the real property to state or local government records.
"Residential real property" means real property containing from one to four residential dwelling units.
"Service provider" means an individual or entity that provides services through a real estate service agreement. A "service provider" includes any person acting as an agent or designee of a service provider.
This chapter shall not apply to:
1. A home warranty or similar product that covers the cost of maintenance of a major home system, such as plumbing, HVAC, or electrical wiring, for a specific period of time;
2. An insurance contract;
3. An option or right of refusal to purchase residential real property;
4. A declaration created in the formation of a common interest community as defined in § 54.1-2345 or any amendment thereto;
5. A maintenance or repair agreement entered into by a property owners' association in a common interest community;
6. A mortgage loan or commitment to make or receive a mortgage loan;
7. An agreement relating to the sale or rental of personal property;
8. Water, sewer, electrical, telephone, cable, or other regulated utility service providers;
9. A property management agreement by which the owner of the real property contracts with a party to provide management services for the maintenance, ownership, operation, or lease of a residential premises; or
10. A mechanic's lien, as established by § 43-1.
A. No real estate service agreement that is effective and binding for more than one year from the effective date shall:
1. Purport to run with the land or bind future owners of interests in the residential real property identified in the service agreement;
2. Allow the service provider to assign or transfer the right to provide services under the service agreement without notice to and written agreement of all parties to the service agreement; or
3. Purport to create a lien, encumbrance, or other real property security interest on the residential real property identified in the service agreement.
B. Offering a real estate service agreement that violates subsection A to a consumer constitutes a prohibited practice under the provisions of § 59.1-200 and shall be subject to the provisions of the Virginia Consumer Protection Act (§ 59.1-196 et seq.). Nothing in this subsection shall be construed to prevent an individual from pursuing any other remedy available by law.
A service agreement that violates subsection A of § 55.1-3202 shall be void and unenforceable. No service provider has a right to a refund of the consideration paid to the owner, buyer, or tenant in connection with a prohibited service agreement.
A. No service provider shall submit a real estate service agreement that violates subsection A of § 55.1-3202 to the circuit court or a state or local agency for recording. Any such submission constitutes a prohibited practice under the provisions of § 59.1-200 and shall be subject to the provisions of the Virginia Consumer Protection Act (§ 59.1-196 et seq.).
B. A real estate service agreement that violates subsection A of § 55.1-3202, or a notice or memorandum thereof, is void and unenforceable and shall not operate as a lien, encumbrance, or security interest. No owner or buyer shall be required to record any document voiding a real estate service agreement that is in violation of subsection A of § 55.1-3202, or notice or memorandum thereof, recorded in violation of this section.
C. Notwithstanding subsection A, no recorded real estate service agreement that is in violation of subsection A of § 55.1-3202 may provide actual or constructive notice of a lien arising from the service agreement to any party interested in the residential real property identified in the service agreement.
Assignment or transfer of the right to provide services under a real estate service agreement recorded prior to July 1, 2024, that would otherwise be in violation of subsection A of § 55.1-3202, is prohibited without notice to and written agreement of all parties to the service agreement.
A. If a real estate service agreement in violation of subsection A of § 55.1-3202 is recorded, any person with an interest in the residential real property that is subject to a lien arising from the service agreement may bring an action against the service provider in the circuit court of the county where the residential real property is located to request a determination that the service agreement is void and unenforceable under this chapter.
B. If a real estate service agreement that violates subsection A of § 55.1-3202 is recorded in the Commonwealth, any party with an interest in the residential real property identified in the service agreement may recover damages, costs, and reasonable attorney fees that may be proved against the service provider. No actual damages, costs, or reasonable attorney fees that are proved against the service provider shall be offset by the consideration paid by the service provider to the owner, buyer, or tenant in connection with the real estate service agreement.
C. Nothing in this chapter shall prevent an individual from pursuing any other remedy provided by law.