An Act to amend and reenact § 55.1-903 of the Code of Virginia, relating to duty of settlement agent; restrictive covenants.
HB39 amends Virginia’s settlement-agent statute to add a new disclosure requirement in residential real estate transactions. In addition to the existing duties to record the deed, deed of trust, mortgage, or other required documents and to disburse settlement proceeds within two business days, a settlement agent may not disburse loan funds or other funds before recordation except in limited circumstances already recognized by law.
The bill also requires settlement agents, in any purchase or sale of residential real property, to notify the purchaser of two things: the availability of owner’s title insurance and the purchaser’s right to remove certain prohibited restrictive covenants if they are discovered in a title search. The restrictive-covenant notice ties to Virginia law allowing removal of covenants barred by § 36-96.6, and the title-insurance notice tracks existing consumer disclosure requirements.
HB39 directly amends § 55.1-903 of the Code of Virginia, expanding the settlement agent’s statutory disclosure obligations in residential real estate closings. It affects settlement agents, purchasers, sellers, and title companies by requiring notice of both title insurance availability and the right to remove prohibited restrictive covenants found in the chain of title. The bill does not change the underlying law on restrictive covenants themselves, but it increases the likelihood that buyers learn of and can exercise existing rights under § 55.1-300.1.
The available record shows the bill was enacted as Chapter 359, which suggests it had sufficient support to pass both chambers and receive the Governor’s approval. No committee transcripts or recorded votes are provided, so there is no direct evidence of debate or opposition in the supplied materials. Based on the final enactment, the overall sentiment appears favorable and noncontroversial.
No specific points of contention are documented in the provided transcripts or vote history. The most likely areas for discussion would have been the added compliance burden on settlement agents and title professionals versus the consumer-protection benefit of ensuring buyers are informed about title insurance and the ability to remove unlawful restrictive covenants. Because no recorded debate is included, it is not possible to attribute any objections to a particular stakeholder group.