REINCheck

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VO
You're listening to REINCheck with Andrea Rice, Contracts and Industry Specialist at REIN, where you get the latest member news and information delivered straight from the source, REIN MLS.

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Andrea Rice
Hello and welcome to REINCheck. I'm your host, Andrea Rice, and today we are joined by attorneys Amy Harman and Michael Levy from the law office of Kaufman & Canoles. And they're going to walk us through the important form changes coming July 1st. Amy is going to focus on resale form updates, while Michael will guide us through the rental side.

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Andrea Rice
So, Amy, Michael, welcome and thank you so much for taking time out of your busy schedules to be here today.

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Michael Levy
Thank you so much for having me.

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Andrea Rice
Yeah, I really appreciate it. So let's begin with a little bit of context.

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Andrea Rice
What are the driving factors behind these upcoming changes coming July 1st?

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Amy Harman
It's a mixture of things. Obviously, we've just gotten through the General Assembly session for 2025, and that did impact various components of our forms, our dealings, and also topics of conversation that are at the local level and the state level. There's also where REIN, as always with our SMAC and their PMAC committees, always looking for feedback from our members and what's either ease of use or clarity.

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Amy Harman
And this was a question in your deal. So we had taken those feedbacks and tried to update our input sheets and things like that. And we're trying to reduce ambiguity and making things clearer, transparent and clearly working to make sure everything is in compliance with applicable laws and even course of dealing.

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Andrea Rice
Yeah. So this time around, we have a lot of great changes and nothing too overwhelming, but a lot of great changes. So Amy, let's start with the resale forms. What are the most notable updates that our members need to know about?

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Amy Harman
So the first in this talks brings in the idea of feedback from our members, as well as conversations that have been happening at the state and local level, and even at the national level. Accessory dwelling units in the concept of the broader concept of additional structures. So we were hearing that, well, we don't have anything on here regarding an ADU under our residential data input sheet.

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Amy Harman
And that, of course brought the conversation to what's an ADU. So we looked at that and there is no clarification of what an ADU is. For those who don't know the what the ADU stands for that accessory dwelling units and it differs by locality. But that started up a okay, what do we do here? And it's a conversation that's happening everywhere.

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Amy Harman
And we want to make sure that we're addressing your needs, to make sure that if you happen to have an ADU, whatever that may be. And as we all know, Newport News has been addressing that. Hampton has been addressing that. Norfolk has been addressing that there was even legislation at the state level that brought that conversation to the state level this year.

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Amy Harman
So we're like, okay, we'll add an ADU to the data input sheet. But then it was a matter of, okay, if we have ADU here, but we have barn and carriage house greenhouse over here, that doesn't make sense. It's not easy for you all. So we changed that. We added a concept called Additional Structures. And you can choose up to three categories.

00;03;26;27 - 00;03;51;14
Amy Harman
And that now includes ADU. It moves garage, apartment, barn, greenhouse, guest house, carriage house, pool house, stable and shed. Because obviously we have quite a different mixture of properties in Hampton Roads into this new category. So hopefully it is easier for all of you to identify what you may have as far as offering on the market or what you're looking for with your on behalf of your clients.

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Andrea Rice
Yeah, I think that'll make it a lot easier, especially when you're searching for something particular.

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Amy Harman
Then we were looking obviously, a conversation that has been happening because of national issues or settlements, but also changes in law. And that would be, making changes regarding unrepresented buyers or making sure the buyers document exactly what the relationship is going to be, if any relationship. And so, with the standard purchase agreement, we noticed that one of the options in 16 A 3 did not have the qualification that the other ones had, and that was buyer has signed the disclosure of broker brokerage relationship to unrepresented party form.

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Amy Harman
We had that in one and four, but we didn't have it in three. So we have added that based on feedback for shouldn't it be there as well and just clarification. And just again, a reminder that that document really does need to be signed. That is that again, the disclosure of brokerage relationship to unrepresented party form. Then we get into a mixture of changes for the all important consumer disclosure information form.

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Amy Harman
That's for CDIF. One is a clarification. Again taking feedback. And just as you review this, if you see something let us know. And this is one of those things where we used interchangeably, most notably because we were through the years using language directly from the statute that while our forms, they refer to the purchasing party as the buyer, we used buyer.

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Amy Harman
But then we also had the word purchaser in there. So a clarification or just a nice let's make it tidy. We added a provision that says the buyers, who is also referred to as the purchaser or at the start of that CDIF form. But then we start getting into some changes needed for real world application. And that is, for instance, such as the audio and video recordings, as we're all learning, everybody has a camera and your life will be videod and that is for our sellers when they are practicing, you know, trying to protect their homes, as we all do.

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Amy Harman
They have cameras inside and out. And then our buyers also have cameras so that they're videotaping and whether videotaping or taking still photos. And with that, we want to make it clear that you all need to be cognizant. You, your clients need to be cognizant that when you are taping things, you need to make sure you are not violating federal or state wiretapping or privacy laws, and that as a seller, you need to be aware that your property, when it's for sale, if you're having an open sale, is now a public area.

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Amy Harman
So you may want to make sure your personal items, things that are very important, whether they're pictures or just names of people, are taken down because they may end up in people's videos or their video capturing moments from when they're walking through your home. A seller we added in this and a sellers advised to remove those items. It's also making clear to purchasers that they need to be aware that there may be cameras on site.

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Amy Harman
Don't talk about your offer you're going to make, you know. I'm going to offer this, but here's my highest limit on that, because there may be whether you want them to be or not, or whether law allows, etc. if you're talking in the street or whatever that cameras may be rolling. So for that, we updated that language. We adjusted the formatting, breaking seller and purchaser ideas and concepts into separate paragraphs for clarity.

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Amy Harman
So we hope that is indeed some of your needs. And again, this is coming back to feedback from you all about how the real world is working. So again, there's no comments being made to SMAC and REIN at large. And we hope this addresses those needs for you. Also on the CDIF, if we had to address any change in law.

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Amy Harman
So the aircraft noise disclosure has been added, you're going that's always been there. No, this is different than the aircraft noise accident zones and noise contour district disclosure. Now pursuant to applicable law this is under 55.1703. Your other disclosure provisions you need to add a buyer beware type provision. We're not asking sellers or the state is not asking sellers to tell people how close they are to that municipal airport or Norfolk International or Newport News Regional.

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Amy Harman
The contracts now need to have a specific statement that says the owner makes no representations or warranties with respect to the property's proximity to a public use airport. Nor any noise from aircraft due to the proximity of the property to flight operations. And with that, the Department of Aviation and the Real Estate Board are working to create a website that buyers and their agents can go to to do their own research.

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Amy Harman
But again, making it clear that neither the agent nor the seller are responsible or providing any information that that new home that you have in a more rural area, or what used to be more rural area is not close to or is close to an airport. I know I joke when we were talking about this that, you know, our neighborhoods are starting to encroach on things like Chesapeake Municipal Airport, the airport out in Pungo, etc. and people may not be familiar that there are airports out that way, and they're out there for the first time

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Amy Harman
drinking their morning coffee in their new home and there's an airplane flying over them, or they're getting the kids tucked in and wondering what is flying over their home at 10:00 at night. So just those things and you'll see that this will also be on the real estate board's form as well. And that will include a link to the website that they set up.

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Amy Harman
They have until July 31st to set that up. So it's a little interesting that with the new statue coming to play on July 1st, that actually the state departments have until July 31st to set up that website. But please be on the lookout for that. Then again, and that's another change to the consumer disclosure information form, CDIF,

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Amy Harman
is paragraph 8 K. And this is back to the concept of additional structures. So we have added a provision that is to protect the seller is protect the listing and selling firms as well as any other agent. And this is to make it clear that even though you may think that home has a in-law suite or a garage apartment, that we're making no representations or warranties regarding the ability of the owner of the property to construct views or that it's actually legally compliant.

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Amy Harman
And again, we don't know exactly what an ADU is anymore or we've never had. Everyone is inconsistent, but again, making it clear that the seller nor the listing firms selling form or anyone else making any reps or warranties, it is the buyer who needs to do due diligence as to whether they can have an additional structure, whether the additional structures that are there, even the barn or a gazebo, it's there.

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Amy Harman
It's on them to figure out whether that is legally compliant and whether their intended use of such structures will be in compliance with law. So again, that's another change we made to the CDIF. So then we also we did some changes again, cleanup based on some cleanup or changing of language based on comments from you all in the purchase price escalation addendum, you all commented that you didn't like the word bona fide because you already had in the sentence qualified buyer.

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Amy Harman
So we remove the word bona fide and make some other editorial cleanups changes just for clarity. In the disclosure of dual agency or dual representation, you'll also see some changes. And again, that was streamlined for formatting and easier comprehension. And just minor legal language adjustments to align with state law. So again, nothing new, just more formatting and clarity provisions, being changes being made.

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Amy Harman
The short sale contingency addendum we've made a changed that removes a paragraph related to brokerage fees. Again, as you all know, this was a big change in our forms. Last year, and this is one that we thought also needed for revisions. Talking about broker trades is no longer applicable under the new rules. So those were the actual changes we made to the documents related to resales.

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Andrea Rice
Wow, Amy, thank you. That's a lot of great information about the changes that are coming up, and I love that you pointed out when the changes were based on member feedback, because sometimes, you know, if you're not aware that you can even give feedback, a lot of people aren't aware of our committees, and we do take member feedback and it is considered at the meeting.

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Andrea Rice
So when you do submit a suggestion to SMAC and PMAC just know that it is heard and when possible it is implemented. So thank you for the breakdown of all of those changes. Now I understand there are some law changes going into effect July 1st that while they don't affect our forms, they may affect how people do business.

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Andrea Rice
Do you want to tell us some of those changes coming July 1st?

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Amy Harman
Sure. The main one that's caught everyone's attention in all conversations lately has been a change to section 59.1310.7. You're all going 59.1. What section is that? You know, real estate's under 55.1. And maybe regarding your brokerage relationships, title 54.1. So this actually has to do with legislation that's gone into effect where the General Assembly worked with the on site wastewater industry to establish some minimum standards for inspection of your septic tanks and other components.

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Amy Harman
So they have established to minimum standards, and setting up a timeline. And this is going to be important. Not so much. Again, not for a change in our forms because our forms already addressed these type of concepts. But when you are negotiating your contracts on behalf of your clients, there's now a delivery component regarding this much more entailed a report that you're going to get from a septic inspector.

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Amy Harman
They now have ten business days after they inspect to provide you with the report. So again, that's ten business days. So for those of you who got used to doing things like termite or septic inspection, etc. towards the end of the due diligence, this one now needs to be towards the beginning of your due diligence because that inspector, either from you or on his own, needs to go get information from the Public Health Department, some information that you may have regarding the property, etc., so that they then can say yes, the permit is for four bedrooms, but in the septic system seems to be compliant with a four bedroom house or identify when it's

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Amy Harman
not. They need to have access to these things. This is no longer just a simple what are the agents referred to as stick and sniff test. They're actually now actually doing some testing and some inspections to determine whether you have an issue with the septic system. They have terms in this legislation that are now going to say that one of the parties to this deal has to enter into a contract.

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Amy Harman
In the contract documents, what's going to be performed, the timeline for it. It's also going to include a decision to decline pumping, if that's applicable to the situation that he that he or she finds. So we bring this up to you so that you are aware that when you're negotiating what your due diligence is going to be, you're also going to need to identify is it going to the buyer side of the seller side that's going to coordinate this inspection, and who's going to help the inspector obtain the information from the public health department or what information that you all have regarding the size of the house and the size of the subject.

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Amy Harman
So take a look at that. And again, that is 59.1310.7 through 59.1310.10. And that's again, it's more had to do with onsite wastewater industry and them trying to set some standards. But it does play into how your transactions involving properties and involved septic tanks are going to go from this point forward starting July 1st. But when all it also gives everyone clarity that you nor your seller nor the inspector is, you know, responsible for anything beyond these things.

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Amy Harman
It's saying that standard and making the disclosures that are applicable. And again, this has a little bit of protection for everybody that nothing is going unnoticed or what the parties agree to as to what the inspection should include. We now have a standard of what that inspection is going to include. So take a look at that one and another change that happened that will impact our rules.

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Amy Harman
And our procedures is that, General Assembly amended title 55.1 regarding the definition of brokerage services, and they added a definition called showing property, which is a little different than how we define touring property in our rules. So we are in the process of updating it before July 1st, that our rules will now have the definition or our rules or procedures will include showing the property as opposed to touring the property and you're also going to find that it now the statute now says enter into a brokerage agreement with the prospective buyer prior to showing property to such prospective buyer.

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Amy Harman
One of the exemptions that used to exist no longer does. So take a look at that. Again, that doesn't change our forms, but it will change, sort of require some changes to our rule and procedures. So again, obviously real estate or the world of real estate was a topic of discussion this year at the General Assembly, part of a few changes of how we all do things, and how we all agree on certain definitions.

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Amy Harman
So again, look for those rule changes and also take a look at if you haven't these changes to the septic tank inspections. And again factor that into your due diligence periods. And talking to one another from the different sides of the deal as to who is going to order the subject, taking the inspection, who is going to provide access to it, and who's going to help obtain some of the documents that that inspector may need.

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Amy Harman
Because, again, you don't want him, him or her having to be delayed because they can't get information from the public health department. I know a conversation came up just the other day where someone was saying, one of the local counties had a fire years ago, and so they're missing some of the septic tank permits. Let's identify that up front.

00;18;15;01 - 00;18;28;17
Amy Harman
And that might just be a good practice. When you're dealing with your properties and you have septic tanks. So Andrea, I believe that captures everything that would impact our selling members. But,

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Andrea Rice
Thank you, Amy. Yeah. And a lot of good insights into that septic. I know there were a lot of conversations about it, but just something to be aware of, especially with time frames and the changes and those rules and policies and procedure changes that will be coming. REIN will be communicating any changes to the rules and policies and procedures to members as they become available.

00;18;51;29 - 00;19;07;07
Andrea Rice
So Michael and next you are up. Can you talk a little bit about the rental form updates? What changes can our people doing property management expect to see on the REIN rental forms?

00;19;07;09 - 00;19;21;02
Michael Levy
Well, first let me just say I'm very happy to report that we don't have to deal with anything quite as messy as septic systems. And the stick and sniff test. I don't know exactly what that is, but I can't get it out of my head right now.

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Andrea Rice
Right.

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Michael Levy
We have considerably fewer changes, that we made on the leasing side of the house. That affected primarily four forms. We were looking at the actual, residential lease agreement itself, the renewal of the lease agreement form, a declaration of ownership interest form, and the commercial input forms, for commercial properties. And so let me take each one of those separately and start with the residential lease agreement.

00;19;51;20 - 00;20;34;29
Michael Levy
So the first thing we did on the residential lease agreement, you're really notice it on the very first page is that the payment due section was reformatted. It was broken down into those payments that are due at signing versus those that are going to become recurring payments over time. And so I think that helps to clarify the form and make it easier for agents and the renters to understand, right up front in the in the lease agreement, we also reformatted, I guess, the, if you will, the client section in paragraph two B of the lease agreement.

00;20;35;01 - 00;21;00;29
Michael Levy
And so there really weren't any content changes that were made here, but the reformatting adds some legibility, some clarity to that section. And then the last piece of the residential lease agreement form that was changed to deals with the photography section. And you'll find that, paragraph eight R of the lease agreement. And in that section it used to refer to just photography.

00;21;00;29 - 00;21;27;20
Michael Levy
But now we've added that it is applicable to video as well. And it clarifies, our changes clarify, you know, who might be conducting that photography or videography. And so we just made it clear that not only could it be the agent, it could be the landlord, it could be agents or contractors or employees of the agent or landlord, who might be there for all sorts of different purposes.

00;21;27;20 - 00;22;00;08
Michael Levy
They may be there for an inspection, they may be there for a repair, and they want to document that repair. But we just wanted to make it clear to renters that, you know, the landlord, the agents, their contractors, employees, they all have the right to photograph and video of the property. And, you know, that gives the renter an opportunity to tuck away things that they don't want out, just personal items, maybe photographs, whatever it may be, before somebody comes over to the property.

00;22;00;11 - 00;22;39;05
Michael Levy
The next form that we addressed was the renewal of the lease agreement. And it was clear to us that this form really hadn't been touched in some time. On the renewal of the lease form, we wanted to include some language that appears in the lease that basically states that if the tenant fails to terminate the lease or fails to respond to the renewal agreement at all, that the lease will automatically renew and it will automatically renew with any change of terms that were identified in the renewal of lease agreement.

00;22;39;05 - 00;23;10;12
Michael Levy
So we added some language to clarify that, I think it will reduce some ambiguity during the renewal process for a lease. The next one that we addressed was the Declaration of Ownership Interest form. And all we did hear was first of all, we simplified it. So it now appears on just one page. And we were really able to do that because we removed a bunch of blanks or bunch of spaces in there that were reserved for identifying the properties of that particular owner.

00;23;10;15 - 00;23;39;15
Michael Levy
It's not necessary to include the actual property addresses, and by removing the addresses, we've now saved owners from having to redo the form or resubmit the form whenever they've had a change of ownership of one of their properties. As long as that change of ownership is still, it's not affecting their the number of total rental units that they have, then there shouldn't be a need to submit a new form.

00;23;39;17 - 00;24;17;26
Michael Levy
And then the final form that we change is the commercial input forms. This is an input we well, actually that affects both the commercial property input forms for both leasing and the sale of property. And all we did here is we added some co-working or shared office category to the different use types, for the property. So this would, you know, allow the owner and the agents to identify, you know, whether that property was available for rent, like a we work situation or a gather situation that that type of thing.

00;24;17;28 - 00;24;45;14
Andrea Rice
Yeah, great. Thank you, Michael. And you know, I think with the declaration of ownership interest form, you know, we always love it when we can get a form down to one page. So I think that's like a big win. So thank you for covering those form changes a lot of great, great changes coming especially for clarity. You know we do our form changes January 1st and July 1st to coincide with any law changes that come about.

00;24;45;14 - 00;24;57;21
Andrea Rice
But really you know, any time we can clean them up and make them more clear and easier to use for our members is wonderful. So what should our agents be doing now to prepare for these changes?

00;24;57;23 - 00;25;18;28
Michael Levy
I think they should just familiarize themselves with the forms. I think hopefully they should be when they're doing that. Think about the properties that they are representing and how these changes might affect, information that they're providing as they’re, as they’re filling out these forms. I mean, it's just really a matter of familiarity. I believe.

00;25;19;01 - 00;25;42;15
Andrea Rice
Yeah, I agree, and all of the changes that were covered here today are available on REINMLS.com. Full red lines, a PowerPoint presentation that you can go through at your own speed. So if you want to use that for training purposes, if you're a broker or just you know, follow along with it so you can see these changes before they come out

00;25;42;15 - 00;25;54;24
Andrea Rice
July 1st. Michael, Amy, thank you so much. And before we sign off today, do you have any last thoughts, parting comments that you would like to share with our members?

00;25;54;27 - 00;26;17;26
Amy Harman
I would just reiterate Mike's recommendation to familiarize yourself with the forms. I would also remind those of you who practice in other areas, or who may be dealing with counterparts from different regions of the state, that if you're not using a REIN form, that they are forms, especially regarding the septic system, may be a little different than how we address it.

00;26;18;03 - 00;26;54;16
Amy Harman
REIN was proactive years ago to address these type of concepts. And so our forms we built already taken the, you know, take into consideration things. But as a good practice, whether it's a lease or a resales, document, just make sure that, while you get comfortable with are very are very thorough forms that if you are dealing with a agent or counterpart elsewhere in the state that, you make sure you read over theirs and don't, count that they haven't made the decision already, that it will be the seller who gets the septic take inspection versus the buyer, or vice versa.

00;26;54;18 - 00;27;15;22
Amy Harman
But we also know that you all we've already been talking about this because it's already started to make, you know, the conversations at REIN meetings, etc.. So as you all go into your height of, your busy seasons, with summer sales and, move ins and move outs on leasing properties, we hope these changes in the forms will make things easier for you.

00;27;15;25 - 00;27;27;22
Amy Harman
And if you have any feedback again, I think, PMAC and SMAC, we both welcome your comments or any other suggestions you may have as you start dealing with these new concepts or any other concept.

00;27;27;24 - 00;27;30;15
Andrea Rice
Yes. Thank you.

00;27;30;17 - 00;27;51;28
Michael Levy
I would just wanted to reiterate, I know that some of our changes may have been prompted by agents referring that or referring questions to the committees, and I think that's very helpful. And I can I really hope that, that folks will continue to do so so that we can improve these forms, for the community to make it that much more user friendly.

00;27;52;01 - 00;27;54;06
Michael Levy
The more input we have.

00;27;54;08 - 00;28;13;10
Andrea Rice
Yes. Thank you. Great point. So I want to thank both of you, Amy and Michael, for not only your time but your legal expertise. SMAC and PMAC are truly lucky to have you, and we really appreciate you coming on here to explain all these changes to our members. And I also want to thank all of you who tuned in.

00;28;13;12 - 00;28;30;19
Andrea Rice
And if you have missed any of the previous episodes of REINCheck, I do invite you to go to REINMLS.com and take a listen and make sure you subscribe while you're there so that you can get future episodes delivered directly to you when they are released. Thank you and have a great rest of your day.

00;28;30;21 - 00;28;46;00
VO
You've been listening to REINCheck with Andrea Rice. Stay in the know from those who know. Delivered straight from the source, REIN MLS.

00;30;33;06 - 00;30;38;20
Andrea Rice
What are the driving factors behind these upcoming changes coming July 1st?

00;30;38;20 - 00;30;55;27
Amy Harman
It's a mixture of things. Obviously, we've just gotten through the General Assembly session for 2025, and that did impact various components of our forms, our dealings, and also topics of conversation that are at the local level and the state level.

00;30;55;27 - 00;31;07;14
Amy Harman
There's also where REIN, as always with our SMAC and their PMAC committees, always looking for feedback from our members and what's either ease of use or clarity.

00;31;07;14 - 00;31;26;19
Amy Harman
And this was a question in your deal. So we had taken those feedbacks and tried to update our input sheets and things like that. And we're trying to reduce ambiguity and making things clearer, transparent and clearly working to make sure everything is in compliance with applicable laws and even course of dealing.