Ask NVAR: Understanding the Virginia Residential Landlord and Tenant Act

Understanding the Virginia Residential Landlord and Tenant Act REGISTERED AGENTS FOR NONRESIDENT PROPERTY OWNERS

By Daniel B. Harris, Esq.

Q.

What does the Virginia Residential Landlord and Tenant Act (“VRLTA”) require of nonresident property owners who wish to lease their Virginia residential properties?

A. § 55.1-1211 of the VRLTA requires any nonresident individual or group of individuals who own and lease residential real property in Virginia to appoint and continuously maintain an agent (“Registered Agent”) for the purpose of service of any process, notice, order, or demand required or permitted by law to be served upon such nonresident property owner.

Q.

Who can serve as a Registered Agent?

A. A nonresident property owner may appoint any individual or entity (corporation, limited liability company, partnership, or other entity) as a Registered Agent, provided the individual or entity maintains a business office in Virginia and (i) if the owner is an individual, they are a Virginia resident, or (ii) if the owner is an entity, it is authorized to transact business in Virginia.

Q.

Should the listing agent serve as a Registered Agent?

A. No. Outside of a property management agreement, the listing agent should not serve as a Registered Agent. Pursuant to the Exclusive Right to Lease Listing Agreement, the listing broker’s agency relationship ends at lease ratification. Since the Registered Agent is appointed for the duration of the tenancy, the listing agent would be providing services outside the scope of a written brokerage agreement. Any errors or omissions to occur in this capacity would likely not be covered by the listing agent’s standard E&O insurance.

Q.

Does the Registered Agent requirement also mean that a nonresident property owner must retain the services of a property manager?

A. No. A Registered Agent is a statutory requirement for the purpose of service of any process, notice, order, or demand required or permitted by law to be served upon such nonresident property owner. A property manager could provide these services as long as the property manager fulfills the requirements for a Registered Agent. Property managers may want to consult their E&O insurance carrier to ensure this activity is covered. However, simply because a property manager may be a Registered Agent does not mean that a nonresident landlord must retain the services of a property manager. Property managers provide services other than as a Registered Agent per the terms of a property management agreement.

Q.

How does the nonresident property owner properly designate the Registered Agent?

A. The designation is made in Paragraph 8 of the NVAR VRLTA Lease. In addition, the name and office address of the Registered Agent must be filed in the office of the clerk of the court in which deeds are recorded in the county or city in which the property lies (usually the Circuit Court). The Clerk may charge a fee of $10 to record this information.

Q.

What about commercial properties?

A. The same rules apply to nonresident owners of commercial real estate. Any nonresident individual or group of individuals who own and lease residential real property in Virginia must also appoint a Registered Agent. See § 55.1-1401.

Q.

What if the nonresident property owner fails to appoint a Registered Agent?

A. If the nonresident property owner fails to appoint or maintain a Registered Agent or if the Registered Agent cannot be found with reasonable diligence, then the Secretary of the Commonwealth is deemed the Registered Agent and may be served any process, notice, order or demand. The Secretary of the Commonwealth will then forward such information by registered or certified mail to the nonresident property owner at their address as shown on the official tax records maintained by the locality where the property is located. Nonresident property owners should think twice before relying on this default provision. Under the VRLTA, a nonresident property owner who fails to designate a Registered Agent is prohibited from maintaining an action in Virginia courts concerning the property.

Q.

Are there any resources listing agents can provide clients in designating a Registered Agent?

A. The concept of appointing an agent “for the purpose of service of any process, notice, order, or demand” is nothing new in Virginia. Virginia business entities are required to appoint Registered Agents for such purposes and have been for many years. A simple online search will reveal a myriad of businesses that specialize in providing these services. If your client has an existing relationship with an attorney, most law firms offer these services for a nominal fee. Check with your broker for additional resources and guidance. If you have any questions, contact the Legal Hotline at NVAR.com/LegalHotline.

Daniel B. Harris, Esq. is the NVAR staff attorney.