It’s springtime in Northern Virginia. For the real estate market, warmer weather means more prospective homebuyers are looking to buy, and conversely, more homeowners will be looking to place their homes on the market. For Virginia real estate attorneys, this typically means buyers and sellers will be looking for real estate legal assistance.
Quite often, legal disputes arise over the terms within residential real estate contracts. Sometimes, real estate agents are caught in the middle, and more reputable real estate sales agents reach out to Virginia real estate lawyers to help their respective clients resolve their legal disputes, since they’re not attorneys.
So what are the common real estate contract issues that we encounter? Obviously, we can’t list them all, but in the next installment of blogs written by me, I’ll attempt to set forth more common issues that make their way into our office. We’ll start the series by going over the legal form of residential real estate contracts in Virginia. This blog will cover the basics of what Virginia courts consider to be proper residential real estate contracts.
Types of Residential Real Estate Contracts in Virginia
Let me start off by saying that we’ve reviewed dozens of different types of Virginia residential real estate contracts. There is no mandated form that Virginia real estate owners and Virginia real estate homebuyers must use under Virginia real estate law, but there are mandatory disclosures that must be provided, regardless of which residential real estate contract is used. Most often, buyers and sellers choose the standard form NVAR® real estate contract or Northern Virginia Association of Realtors standard form contract. It is ALWAYS a good idea to seek independent legal advice from an experienced Virginia real estate attorney before signing any real estate contract.
Statute of Frauds
The statute of frauds is a legal principle that requires certain types of contracts to be in writing, signed by both parties. In Virginia, the Virginia Code of 1950, as amended, requires that agreements for the sale of real estate be in writing (other types of contracts must be in writing, too, but this blog only covers real estate contracts). In addition to having an agreement memorialized in writing, the Virginia Statute of Frauds requirement mandates that the written contract set forth the basic terms of the agreement or understanding between the parties.
Necessary Elements for Binding Real Estate Contract Under Virginia Law
1. Essential terms of contract include consideration, identification and sales price. In order for a real estate contract to be binding or legally enforceable, it must be written, as previously stated, and it must be signed and contain enough information so that the terms of the contract are readily ascertainable. Common elements are consideration, or value exchanged between the buyer and seller, the identification of the property and the sales price.
2. Contingencies excuse non-performance of contract. Commonly, real estate contracts also include contingencies or “escape clauses.” For example, a buyer may need to use a financing contingency which means that either party may be able to cancel the contract if the buyer is unable to secure financing within a specified time. Sometimes, there is a home inspection contingency that allows the buyer to cancel the contract, without being in “breach” based on the terms of the home inspection report. Another common contingency is an appraisal contingency that allows the buyer to cancel the contract if the home doesn’t appraise for a specific amount – typically, the sales price.
3. Signatures of owners necessary. Real estate contracts must be signed by all owners. This means that husband and wife must both sign if they’re both on the deed, unless they can sign for one another with a power of attorney.
4. Mandatory disclosures. The Virginia Residential Property Disclosure Act requires that real estate contracts made in Virginia contain certain disclosures. Under Virginia law, subject to Section 55-519 of the 1950 Codeof Virginia, as amended, buyers must provide certain disclosures to prospective buyers. The types of disclosures requires are beyond the scope of this blog, but hopefully, I can cover it in a subsequent blog in this installment.
Fairfax Real Estate Lawyer: If you’re looking for an experienced Virginia real estate law attorney or Virginia property lawyer, contact Keithley Law, PLLC, PLLC today by calling (703) 454-5147 and schedule an initial consultation in our Fairfax law office.
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