After the 2020 General Assembly Session ended, the Governor recommended amending several bills, including two related to property management, to make them effective immediately in response to the COVID-19 pandemic. On April 22, 2020, the Virginia House of Delegates and Senate reconvened to review the Governor’s recommendations. During the reconvene session, the General Assembly adopted the Governor’s recommendations to make House Bill 1420 and House Bill 340 effective immediately.
Please Note: Virginia REALTORS® will release a full summary of all bills impacting the real estate industry soon.
1. Restrictions on Charges for Late Payment of Rent (HB 1420) (Effective April 23, 2020)
This bill caps late fees or charges to the lesser of 10% of the periodic rent or 10% of the balance owed. Additionally, late fees or charges can only be charged if such charge is provided for in the lease. This means that you will need to ensure that your lease calls for late fees or charges and that such term caps the late fees at the lesser of 10% of the periodic rent or 10% of the balance owed.
Virginia REALTORS® provided standard language that can be used in conjunction with the Virginia REALTORS® Residential Lease (Form 200) in the property management newsletter (PM News) sent on April 15:
The late fee language contained in Paragraph 1(h) of this lease is superseded. Late Fee will be the lesser of 10 percent of the total Monthly Rent or 10 percent of the balance due and owed by Tenant.
This language can be added to a lease in the additional terms section or with an addendum or amendment. The Residential Lease will be updated on July 1 with this language and other legal changes.
2. Furlough & COVID-19 Protections (HB 340) (Effective April 23, 2020)
Similar to the 2019 Act that provided relief for tenants, landlords, and homeowners who were impacted by the government shutdown, this bill provides protections to tenants, landlords of tenants, or homeowners who are furloughed or impacted by a closure of the United States government. A tenant who is impacted by a shutdown of the federal government and is facing an unlawful detainer, can provide written proof that he is furloughed or otherwise is not receiving wages due to the government shutdown, and receive a 60-day continuance. A homeowner who is furloughed or impacted by a government shutdown, has defaulted on a note and is subject to a foreclosure proceeding, will receive a 30-day stay on the proceeding after providing proof that he was furloughed or not receiving pay. A homeowner who rents to a tenant who was furloughed or did not receive pay qualifies for the same 30-day stay as a homeowner who was himself furloughed. The law details what written proof must be provided and what an impacted individual must do to receive the stay of action. This means that in the event of another federal government shut down, tenants, landlords, and homeowners should start to document their furlough status or change in pay so they can provide this to the courts in the event there is an unlawful detainer or foreclosure action.
The Governor amended this bill in April 2020 to extend similar protections to individuals impacted by the COVID-19 pandemic, unless the individual is protected under another federal, state, or local law or regulation enacted in response to the COVID-19 pandemic or the declared State of Emergency related to COVID-19. The protections provided under the COVID-19 expansion expire 90 days after the end of the state of emergency declared by the Governor in response to COVID-19.