Virginia Real Estate Law Updates for 2025

Effective July 1, 2025, Virginia is implementing several key changes affecting real estate transactions, land use approvals, local governance, and secured lending. Below is a comprehensive overview of what’s changing – and how those changes may impact your real estate interests and business operations.

Courts and Dispute Resolution

• Higher General District Court Limit: The jurisdictional cap for civil claims in general district court rises from $25,000 to $50,000, allowing more mid-size property disputes and contract claims to be resolved faster and less expensively. (SB 1291)

• Extended First Return Date: For unlawful detainer actions and other civil proceedings, the first court date may now be set up to 90 days from service – up from 60 days – offering more flexibility in scheduling and negotiation. (SB 761)

Environmental and Infrastructure

• Stormwater Management Access Expanded: Localities operating a storm sewer system gain broader rights to enter private property for inspections and enforcement under the Virginia Erosion and Stormwater Management Act. (HB 2008 / SB 1093)

• C-PACE Financing Expanded: Commercial Property Assessed Clean Energy (C-PACE) financing eligibility now includes multifamily buildings with five or more units and commercial condos, supporting broader clean energy upgrades. (HB 1819)

Homeowners’ Associations and Condominiums

• Terminate Management Contracts Without Cause: HOAs and condominium associations can terminate an automatic-renewal management contract with at least 60 days’ written notice, and outgoing managers must promptly transfer all funds and close accounts at no added cost. (HB 2750)

• No Buyer Name Required for Resale Certificates: Associations may not demand disclosure of a buyer’s name before preparing a resale certificate or disclosure packet, streamlining closings and protecting buyer privacy. (HB 2110)

• Insurance Deductible Disclosure: Resale packets must now state if the association’s governing documents allow unit owners to be charged for an insurance policy deductible – clarifying an often overlooked expense for buyers. (HB 1704 / SB 808)

• Community Land Trust Governance Changes: Community land trusts are no longer required to maintain an open membership or to have a majority board elected by members, providing greater flexibility in governance structures. (HB 2151)

Landlord-Tenant

• Fee Disclosure on First Page of Lease: Landlords must now include on the first page of any written lease, extension, or renewal an itemized list of all additional fees – such as cleaning, late payment, or amenity fees – that may be charged. Clear disclosure must occur up front, and no new fees can be added later unless formally incorporated into an amendment. (HB 2430)

• Ban (sort of) on Processing Fees for Payment: It is now unlawful for landlords to charge tenants processing or convenience fees tied to any form of payment (rent, deposits, etc.), unless they also offer a fee-free alternative method, such as cash, check, or money order. This protects tenants from hidden costs based solely on payment method. (HB 2218) / (SB 1356)

• Permanent Eviction Diversion Program: Virginia’s pilot eviction diversion program is now permanent and available in all district courts, providing mediation opportunities and payment plan options to help tenants avoid eviction for nonpayment. (HB 1623 / SB 830)

• New Notice of Nonrenewal Requirement: Landlords who own more than four residential units (or a 10% interest) must provide tenants with at least 60 days’ written notice if they do not intend to renew a lease, adding predictability for tenants. (HB 1867 / SB 1043)

Planning, Zoning, and Land Use

• Subdivision and Site Plan Approvals Streamlined: In most localities, planning commission approval is no longer required for administrative plats or minor site plans, cutting red tape and speeding up local development processes. (HB 2660 / SB 974)

• Shorter Public Hearing Notice Periods: The second required public hearing notice for planning and zoning matters must be published at least five days before the hearing (down from seven), modestly expediting land use decision timelines. (HB 1996)

• Enhanced Civil Penalties for Zoning Violations: Local governments now have clearer authority to levy increased civil penalties for repeat zoning violations affecting multifamily properties, promoting prompt compliance. (SB 1267)

Property Disclosures and Consumer Protections

• Standard Septic Inspection Requirements: Real estate transactions involving septic systems must meet new minimum inspection standards performed by qualified inspectors, with a written report provided within ten days of inspection. (HB 2671)

• Certified Mold Remediation Required: Mold removal in dwellings must be performed by nationally certified professionals following industry standards; failure to comply may trigger Virginia Consumer Protection Act liability. (HB 2195)

• Residential Airport Noise Disclosure: Residential property disclosures must now include information advising buyers to check publicly available airport noise data for properties near public-use airports. (HB 1706 / SB 1210)

• Deed Fraud Advisory Group Formed: The Virginia Housing Development Authority must convene a study group to examine deed fraud and deliver recommendations for statutory reforms by November 1, 2025. (HB 2396 / SB 1270)

Real Estate Brokerage and Licensing

• Written Agreements Required Before Showings: Agents representing buyers or tenants must have a signed brokerage agreement in place before showing any property, closing a longstanding exception and aligning practice with consumer protection goals. (HB 1684 / SB 1309)

• Broker Employee Leasing Authority Expanded: Unlicensed employees working under a licensed broker may now sign certain residential lease agreements and collect security deposits, easing operational burdens for property management firms. (HB 2557 / SB 993)

Secured Transactions and Commercial Code

• Priority of Security Interests in Fixtures Clarified: Virginia updates UCC § 8.9A-334 to confirm rules for determining priority of security interests in fixtures and crops, providing more certainty for lenders. (Va. Code § 8.9A‑334)

• Written Lease Modification Rule Affirmed: Commercial lease modifications may be enforceable without new consideration if documented in writing, clarifying contract law under Virginia’s version of the UCC. (Va. Code § 8.9A‑208)

Tax and Valuation

• Affordable Housing Real Estate Tax Assessment Reform: Starting January 1, 2026, localities must value affordable rental housing using the income approach, but developers must submit standardized forms beginning September 1, 2025. (HB 2245)

Tax Delinquency, Blight, and Redevelopment

• Increased Nonjudicial Auction Threshold: Local treasurers can auction tax-delinquent property valued up to $15,000 (up from $10,000) without a court order, expediting cleanup of vacant or abandoned parcels. (HB 1792)

• Lis Pendens Clarification: Parties may file a lis pendens or request an Order of Publication to protect interests in actions to enforce delinquent tax liens or in partition suits, so long as all interested parties are named in the pleading. (HB 2362)

• Land Bank Transfers for Blighted Property: Localities may petition to convey long-vacant, blighted, tax-delinquent parcels directly to a land bank or nonprofit instead of selling them at auction – encouraging reuse and community revitalization. (SB 1476)

Other Notable Changes in the Law

• Expanded Civil Liability for Employers: Employers can now be held civilly liable for intentional acts committed by their employees – such as assault or sexual battery – when the conduct occurs within the scope of employment and the victim is a “vulnerable person” (such as a patient, tenant, or business invitee in a care setting). This marks a significant departure from prior Virginia law, which generally shielded employers from such liability absent gross negligence. The new statute applies to personal injury or wrongful death actions accruing on or after July 1, 2025, and is expected to have wide-ranging implications for businesses in healthcare, property management, hospitality, and other industries with close client contact. (HB 1730)

• Ban on Non-Competes for Overtime-Eligible Employees: Virginia law now prohibits employers from entering into non-compete agreements with any employee classified as non-exempt under the federal Fair Labor Standards Act (FLSA) – regardless of how much they earn. This expands the prior law, which only protected “low-wage” employees. Employers may still use nondisclosure and non-solicitation agreements, but covenants restricting post-employment competition with the company are now unenforceable if applied to non-exempt staff. The law takes effect July 1, 2025, and may require employers to revise existing agreements and reconsider how they classify key personnel. (SB 1218)