In mid-February, the Bureau of Insurance issued an administrative letter and then subsequent FAQs regarding the practice of “split settlements.” Virginia REALTORS® continues to get calls through the Legal Hotline from agents that are still dealing with some of the fallout from this. We have information on this issue on our website here, and the letter & FAQs can be found here (RESA-Relevant Administrative Letters 2022-01).
The Standard Forms Subcommittee and the Risk Management Committee have approved language to be added to the Expenses; Prorations; Rollback Taxes paragraph (Paragraph 10) of the Sales Contract that will address two of the biggest concerns immediately:
- Sellers are suddenly being charged fees by a settlement agent they had limited say in selecting because of the law, and are unable to shop for certain settlement services that may be provided for a lower fee.
- Sellers being able to retain legal counsel to draft the deed and perform other services.
These changes are live as of April 1, 2022. Please utilize these resources for more information.
Frequently Asked Questions
What is the new language?
Seller shall pay no more than $___ in conjunction with escrow, closing, or settlement services as defined in Virginia Code § 55.1-1000 unless otherwise approved in writing. Purchaser shall pay any costs in excess of this amount charged by the Settlement Agent. If no amount is entered in the space in this paragraph, the parties agree that the amount entered in the blank shall be $250.
Seller reserves the right to retain an attorney of their choosing, and at their expense, to draft the deed and represent Seller by providing services other than those defined as escrow, closing, or settlement services in Virginia Code § 55.1-1000. Such right must be exercised in time to ensure that there is no delay to settlement.
When will this be in the contract?
We have provided the language to all vendors who have the Virginia REALTORS® Standard Forms Library and asked that they release the updated contract on Friday, April 1, or as soon as possible after that.
Why isn’t this language in my local sales contract?
Virginia REALTORS® provided the approved language to the other forms providers (local associations & MLSes) as soon as it was approved by the Risk Management Committee. Each local forms provider will need to evaluate whether this language or other language is right for their members in their marketplace.
Where is this new language?
The new language has been added to the Expenses; Prorations; Rollback Taxes Paragraph (Paragraph 10 of Form 600).
I don’t see the new language on the Virginia REALTORS® contract I’m using – what’s going on?
Virginia REALTORS® has provided updated contracts to all vendors who host our forms library with a request that they make the updated contract live on Friday, April 1, or as soon as possible after that.
Some vendors need a little more time to make changes to forms. If you would like to include this language in your contracts between now and when it is live in your vendor, you can either access the updated contract on the Virginia REALTORS® website (where you are able to access fillable PDFs) or include it in the additional terms paragraph or an addendum to the contract.