REINCheck

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Voiceover [00:00:06] 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 [00:00:21] Hello and welcome to REINCheck. I'm your host, Andrea Rice, and today we are checking in with attorney Brandon Allred to discuss some important law changes that took effect on July 1st. Brandon is an attorney with Kaufman and CAnoles and serves as legal counsel for REIN Property Managers Advisory Committee. Brandon, thank you so much for taking time out of your busy schedule to be here today.

Brandon Allred [00:00:43] Well, good morning and thank you very much for having me. Always nice to be with REIN.

Andrea Rice [00:00:49] Yes. Well, thank you, Brandon, for being here. Today, let's go ahead and talk about some of those law changes that took effect July 1st, particularly some of those changes that impact our members that do property management. So, there was a change in notice to the time frame for access to the property from 24 hours to 72 hours. What can you tell us about this change?

Brandon Allred [00:01:11] Yeah, sure. Happy to talk about that. So those of you who have been doing any property management at all really will probably be familiar with Section 55.1-1229 of the Virginia Landlord Tenant Act. And this tells us that we have to give reasonable notice to tenants prior to entering onto lease premises. And previously that time frame, what constitutes reasonable notice, at least for purposes of providing routine maintenance services, was 24 hours notice. And there's always been an exception for emergency situations. But by and large, there was a 24-hour notice requirement. As of July 1st, that notice requirement has changed to 72 hours from 24 hours. Now, we got an interesting question from one of the REIN members just a few weeks actually before the new law became effective on July 1st. And the question that was asked was, I know that 72 hours is the set in stone rule or routine maintenance, but what about if I want to show the property to a prospective tenant? So, I've got the property on the market for rent. I need to do a property showing the 72 hours still apply, or is there some other standard that I can look to in that situation? And interestingly enough, the answer is yes. A very careful reading of Section 1229 will reveal that 72 hours is set in stone, a requirement for routine maintenance. But interestingly enough, that code section also deals with entry for other purposes, among them showing rental units to prospective tenants. And it imposes a reasonableness standard there without a specific set time period. And there are very clearly two different entry mechanisms in that section as a landlord-tenant act. So, it's a little bit unclear. Unfortunately, there's not a set in stone standard or entry for other reasons. The standard is what is reasonable and usually that means what is reasonable in the context of any given situation. I think if you stick with 72 hours, you're going to be safe pretty much regardless. And it will be interesting to see what the General Assembly does with this in the next session if they come up with something a little bit clearer in other contexts. So hopefully that's a little bit of background on the new code change. I wish we had some more clarity there, but that's the situation as it stands as of July 1st. Is that helpful?

Andrea Rice [00:04:16] I think that that's going to be very helpful in explaining that change. Thank you, Brandon. And another change that took effect July 1st was the change in time frame for material noncompliance in response to House Bill 1889. What can you tell us about this change?

Brandon Allred [00:04:34] Yeah, and unfortunately, this change is going to be much more straightforward than the last change we talked about. This was really one of the covid protections that came about last year, and it's just been extended. So originally, this protection was intended to expire July 1st of this year. It has now been extended to expire July 1st, 2022. So, an additional year on that. And really, this is the requirement that landlords give advance notice to tenants of nonpayment or breach of a lease prior to taking action to pursue some sort of remedy under the lease. So, you now have to give tenants 14 days advance notice of nonpayment rent under a lease and provide them an opportunity here before you can exercise any remedies under the lease that applies to all landlords, regardless of how many units they own. And then, of course, for landlords who earn more than four rental units, there's the additional requirement that they offer a payment plan option to send their tenants. And again, that's extended. So, it now expires July 1st, 2022.

Andrea Rice [00:05:56] OK, great. That's good to know. That's an important time frame to our members who do property management will want to pay attention to. And lastly, let's talk about the change to the Virginia code section that addresses the SCRA waiver. Basically, what changed? And can our members still use the REIN SCRA waiver in some situations?

Brandon Allred [00:06:21] Well, thank you for bringing this up, because I think this is a significant change and it's going to have a significant impact on the way many of REIN members do business as far as property management is concerned. And I think most property managers will be familiar with the SCRA waiver. There are two universes of protections for service members. One is the Service Members Civil Relief Act, which is the federal statute providing protections for service members and their dependents. The other is a set of protections available to just service members, generally not their dependents, under Section 55.1-1235 of the Virginia land or tenant act. The federal statute, the SCRA is a little bit broader in the scope of protections that it provides, and it is waivable pursuant to federal law. It's written into the statute. The Virginia counterpart, 55.1-1235 Is not going full. So, it becomes common practice in recent years for landlords as a condition to renting to service members or dependents of service members to have them waive the federal protections as a condition to signing the lease. And obviously, they continue to have the protections under the Virginia statute. In recent years, there has been an awful lot of discussion about that practice. And as you may imagine, there are some in the military who are not particularly thrilled with that practice, and without getting too much into the academics of it, there's been a legal discussion surrounding that practice because the waiver of the SCRA is expressly contemplated by the federal statute. But there are also those who say that requiring service members to waive their protections under the SCRA really doesn't match with Virginia law on the issue in that in the Virginia public policy sort of dictates that you cannot waive a legal protection afforded to you without having a complete understanding and having complete knowledge of the protection that's being waived. And there's some common law underpinning this. The argument goes that you can't have that knowledge and understanding until an actual issue at law has occurred. So, without getting any more into the background of it, that's sort of the discussion that's been ongoing for the last couple of years. And the legislature in the last session, without really getting into the legal analysis of it, finally said, OK, in Virginia, we've decided we are no longer going. Permit waivers under the SCRA as a matter of statute unless a dispute has already occurred between the landlord and the service member to whom the landlord has rented. So, I think the biggest takeaway here and the most important takeaway for our property managers is that you can no longer condition signing a lease with a service member or a service member's dependent on that service member waiving their protections under the SCRA. So, the SCRA waiver is no longer applicable, no longer available, no longer enforceable in Virginia if it is entered into as a condition to signing a lease. The one context in which the SCRA waiver is available is if there is an ongoing active dispute between a service member tenant and a landlord and in connection with resolving that dispute, the service member and the landlord enter into a waiver, presumably as part of a settlement agreement and with respect to the set of facts that gave rise to the dispute. So, I know that's a lot of words. Maybe to put sort of a more digestible example on it. If you've got a landlord leasing to a service member and the service member breaches the lease for whatever reason, [inaudible] never fails to comply with the terms of the lease. And the landlord pursues judicial action against the service member under the SCRA the service member can take advantage of an automatic stay from judicial proceedings. So, let's say the service member does that. At a later date, the service member and the landlord enter into negotiations to resolve the dispute. And as part of those negotiations, they reach a settlement. And that settlement could include the service member waiving protections of the SCRA with respect to the set of events giving rise to the dispute. So, I think the key takeaways are we cannot use the SCRA waiver as a condition to leasing to service members anymore. Again, a very, very limited set of circumstances in which it is usable, namely only where a dispute has already occurred, and then only with respect to the set of events giving rise to that dispute.

Andrea Rice [00:12:31] All right, that's really informative, and I think that's going to be something that our members will really want to pay attention to. And because of this important change to the Virginia code surrounding the SCRA waiver, REIN has made the decision to remove the SCRA waiver from REIN's library of forms because it would be such a limited scope when it could be used and really could have some liability issues for our members. So, starting July 1st, that form will no longer be available. Is that correct, Brandon?

Brandon Allred [00:13:07] Absolutely.

Andrea Rice [00:13:09] All right. Well, thank you, Brandon. I really appreciate you taking the time to help us stay informed and up to date on all of these recent changes to the Virginia code. And I want to thank all of you out there for listening. I hope you enjoyed this episode of REINCheck. And if you missed any of the previous episodes, I do invite you to go to REINMLS.com/podcast to take a listen. Thank you and have a great rest of the day.

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Voiceover [00:13:34] You've been listening to REINCheck with Andrea Rice. Stay in the know from those who know. Delivered straight from the source, REIN MLS.

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