Virginia State Bar

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Real Property

A Section of the Virginia State Bar.

Meeting Minutes - January 21, 2005

Minutes of the Virginia State Bar
Real Property Section
Board of Governors

Williamsburg, Virginia

The Winter Meeting of the Board of Governors of the Real Property Section of the Virginia State Bar, with Area Representatives in attendance and participating at the meeting, was held at William & Mary Law School in Williamsburg, Virginia on Friday, January 21, 2005.

The following persons (based on execution of the roll sheet or otherwise known to be present) were in attendance: Larry J. McElwain, the Section's Chair; Douglass W. Dewing, the Section's Vice-Chair; Grice McMullan, the Section's Secretary-Treasurer; Members of the Board of Governors or ex officio members: Steven W. Blaine, James M. McCauley, Eric V. Zimmerman, Paula S. Caplinger (Immediate Past Chair), Lucia Anna Trigiani (Council member and VBA Real Estate Council Chair) and Nancy Kern (as Virginia CLE Liaison); Area Representatives: Courtland L. Traver, Kenneth L. Dickenson, Paul A. Bellegarde, Mark D. Williamson, Harry R. Purkey, Jr., Joseph W. Richmond, Jr., Joseph M. Cochran, Susan M. Pesner, Michael E. Barney, Howard E. Gordon, Charles M. Lollar, Cynthia A. Nahorney, Edward R. Waugaman, K. Wayne Glass, David C. Helscher, Joann Wang, and William L. Nusbaum.

Larry McElwain called the meeting to order at 1:00 p.m., and made welcoming remarks and had all attendees introduce themselves.

The minutes of the summer meeting held at Virginia Beach on June 18, 2004 prepared by Doug Dewing and the autumn meeting held at Charlottesville, Virginia on September 24, 2004 prepared by Grice McMullan were approved at the meeting.

A discussion of the finances of the Section next occurred with L. McElwain stating that overall the Section is doing much better as to its expenditures when compared to its income than last year and has some excess money with which to use for other purposes. The main reason for this is due to the fact that the expenses of printing the Fee Simple have been reduced.

L. McElwain and Nancy Kern next discussed the status of the Advanced Real Estate seminar that is to be organized by Virginia CLE with the assistance of the Section, which will take place at Kingsmill in Williamsburg on February 25 and 26, 2005 for continuing legal education credits of eight hours including credits for two hours for Ethics. As of the date of the meeting, forty-three persons had registered for the seminar, bringing the seminar just under half-way towards the necessary number to make the seminar profitable, which number of attendees is one hundred. Nancy Kern said that for this seminar there would be opportunities for more social interaction among the attendees than in the past.

L. McElwain next reviewed the seminars scheduled for the spring and summer, pointing out that the 23rd Annual Real Estate Practice Seminar was scheduled to take place on the following dates at the following locations: May 3, 2005 at the Richmond Marriott, May 4, 2005 at the Roanoke Wyndham in Roanoke, May 10, 2005 at the Holiday Inn Select in Norfolk, and May 12, 2005 at the Waterford at Fair Oaks in Fairfax. The annual Summer seminar is scheduled to take place at the Summer State Bar meeting in Virginia Beach on June 18 at the Holiday Inn-Sunspree Hotel, where a seminar will be presented in conjunction with the State Bar Environmental Section. After the seminar, there would be a joint meeting of the Section with the Virginia Bar Association's Real Estate Council, and in the evening there would be the customary dinner of the Section at Steinhilbers. L. McElwain said that the date for the autumn Section meeting had not yet been determined.

Nancy Kern also pointed out that there would be a seminar presented by Pia Trigiani and David Mercer as to Community Associations in Richmond on March 29 and in Fairfax on April 6 with video replays in six other locations on May 10 for four MCLE credit hours.

Thereafter various Subcommittee Reports were heard as follows:

For the Commercial Real Estate Subcommittee, Grice McMullan reported that the team concept seemed to be working very well with four set of teams having prepared articles for the Fee Simple and with articles from the next teams expected for its spring edition.

Steve Wood, as the Chair was not present to report for the Creditors Rights and Bankruptcy Subcommittee nor was Christina Meier present to report for the Residential Real Estate Subcommittee.

For the Ethics Subcommittee, Susan Pesner reported that the biggest issue existing at the current time is the fact that various banks and title insurance agencies are combining forces to agree as to what title insurance rates will be charged by stating if a certain title agency is used there will be a cut rate for doing so. L. McElwain stated that he was not sure if this issue should be handled by the Ethics Subcommittee or by the Title Insurance Subcommittee or perhaps both should work together to address the issue.

Another companion issue was raised by Jim McCauley as to the fact that even though there is a statute prohibiting attorneys or settlement agencies from receiving reassignments of the right to pursue banks that have not released liens within the required time and therefore incurring a $500 penalty, there have been cases where attempts have been made to circumvent the statute by setting up independent entities that were neither attorneys nor settlement agents to take such a reassignment. Following an extended discussion among the meeting attendees, L. McElwain stated that he would like to have the Ethics Subcommittee report on whether or not there is an ethical issue as to whether an independent entity can be set up to take reassignments of such claims.

P. Trigiani next handed out certain bills currently being tracked by the VBA and specifically discussed two bills, Senate Bill 982 and House Bill 2821. SB 982 requires title insurance companies to issue insurance only at published rates. P. Trigiani pointed out that this issue is not a new legislative issue, having come up in 1993. Charles Menges has offered and is willing to get involved on behalf of the VBA to represent the VBA in meetings where the bill will be discussed, in order to speak against the bill. P. Trigiani also said that the VBA Council's Executive Committee supported a recommendation to oppose this bill.

House Bill 2821 authorizes title insurance companies to charge risk rates that it negotiates with a potential insured. Such rates shall be presumed not to be unfairly discriminatory if they are sufficient to furnish a reasonable margin for profit after provision for probable losses, exposure to loss under policies, allocations to reserves, costs of participating insurance, operating costs and other items of expense fairly attributable to the operation of the business, and are not unfairly discriminatory between risks involving essentially the same hazards and expense elements. P. Trigiani said that this bill softens SB 982 somewhat, and the VBA Council Executive Committee is recommending support for this bill.

P. Trigiani also discussed, among other bills currently being debated, a bill concerning the Uniform Trust Act, which is being supported by the VBA's Trusts and Estate Section and Senate Bill 1267, which makes the necessary changes in the Code to provide for the incorporation of previously unincorporated churches. The bill also includes a redefinition of "church" and "minister."

An interesting bill was next discussed concerning condemnation, which was Senate Bill 301. This bill provides that if property acquired by the power of eminent domain is declared surplus within 15 years of the condemnor's being vested with title, the condemnor must offer to sell the property to the former owner at the original sale price plus interest at an annual rate of six percent, with price adjustments made for any improvements to the property.

Senate Bill 920 was also discussed, which allows cities and counties to impose a fee not to exceed $250 on certain recorded instruments that are subject to the state recordation tax. The fee will be paid by the grantor and will only be allowed in localities having a growth rate in kindergarten through 12 school-age population of one-half percent over the previous three years combined growth rate. Also, affordable housing is exempt from the fee. The revenues generated by the fee are to be used by the locality for public school capital projects. Various opinions were expressed as to this bill and SB 301.

Next, House Bill 2604 was discussed, which provides that a possibility of reverter or a right of re-entry is extinguished if the specified contingency does not occur within 30 years after such possibility or right was created. Any person owning such possibility or right may record an initial or renewal notice of intention to preserve such interest for a subsequent 30-year period. Grice McMullan asked for opinions as to this bill, and, after several comments about the effect of and examples involving reverter as well as what other states were legislating as to the reverter issue, disapproval of the bill as written was registered by Court Traver. It was finally agreed that a recommendation be made that the bill be returned for further study, and that to the extent that the VBA be allowed to participate in the study, it be allowed to do so.

Finally discussions were held as to House Bill 1588, which makes the provisions governing removal of residential unlawful detainer actions applicable to unlawful detainer actions involving commercial tenancies and House Bill 2542, which provides that "person under a disability" shall not include an incarcerated person for purposes of executing a will, powers of attorney, deeds, or deeds of trust.. Ed Waugaman expressed support for HB 2542. A bill not listed on the report provided was raised by Ed Blaine in the land use area where there was an attempt to cap the tax credit imposed on easement tax credits.

Ed Waugaman stated that there was nothing to report from the Title Insurance Subcommittee and Doug Dewing stated the same for the Technology Committee.

L. McElwain stated that the results of the survey of readers of the Fee Simple would be discussed at the spring meeting of the Section. He also stated that the idea for a law student writing contest had received favorable approval by the Bar Council. Also that it had been decided not to try to expedite an increase in the dues at this time. L. McElwain stated that in any event the dues increase would not go into effect until one year after its adoption.

Joann Wang was introduced to the Board as a candidate to be a new area representative for the Northern Region, and she was moved to be admitted by Susan Pesner, which motion was seconded and unanimously approved.

On motion made, seconded, and unanimously approved the deepest sympathy was expressed by the Board on learning of the deaths of the wives of J.B. Lonergan and Ed Waugaman.

Upon motion made and seconded the meeting was adjourned.

Respectfully Submitted,

C. Grice McMullan, Jr.

Secretary

AGENDA
WINTER MEETING OF THE BOARD OF GOVERNORS
OF THE REAL PROPERTY SECTION OF THE VIRGINIA STATE BAR
January 21, 2005
Location: Marshall Wythe School of Law, Room 127
Williamsburg, Virginia

Welcoming Remarks and Introductions - McElwain

Review/Approval of Minutes from the June 18, 2004 and September 24, 2004 meetings - McElwain

Financial Report - McMullan

Seminars Report - McElwain

Committee Reports - Committee chairs

Old Business

News Business

Adjournment

Note: Immediately subsequent to our meeting there will be an informal meeting with the leadership of the Real Property Section of the Virginia Bar Association. Everyone is encouraged to attend with the hope that we can identify projects and/or areas where cooperation will be beneficial to both groups.