Virginia State Bar

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Real Property

A Section of the Virginia State Bar.

Meeting Minutes - February 25, 2005

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

Williamsburg, Virginia

The Spring 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 Kingsmill Resort in Williamsburg, Virginia on Friday, February 25, 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: Eric V. Zimmerman, Paula S. Caplinger (Immediate Past Chair), Lawrence A. Daughtrey, Jean D. Mumm and Nancy Kern (as Virginia CLE Liaison); Area Representatives: Courtland L. Traver, Paul A. Bellegarde, Mark D. Williamson, Joseph W. Richmond, Jr., Susan M. Pesner, Michael E. Barney, Howard E. Gordon, Cynthia A. Nahorney, Edward R. Waugaman, Ray W. King, David C. Helscher, Joann Wang, William L. Nusbaum, Lawrence M. Schonberger, and Randy C. Howard. There were also two guests in attendance who were Philip Miller and Bonnie Taliaferro.

Larry McElwain called the meeting to order at 10:30 a.m., made welcoming remarks and had all attendees introduce themselves.

The minutes of the winter meeting held at the William and Mary Law School in Williamsburg on January 21, 2005 were approved at the meeting.

A discussion of the finances of the Section next occurred with L. McElwain stating that overall that the Section is doing much better than last year as to its expenditures when compared to its income, and may have 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 then discussed the status of the Advanced Real Estate seminar that was to take place after the meeting, saying that it was fully subscribed with a waiting list.

Doug Dewing next reviewed the seminars scheduled for the spring and summer and described in detail the program for the 23rd Annual Real Estate Practice Seminar that was scheduled to take place in Richmond on May 3, in Roanoke on May 4, in Norfolk on May 10, and in Fairfax on May 12. As was stated at the Winter meeting, 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 discussing issues surrounding environmental site assessments will be presented in conjunction with the State Bar Environmental Section. L. McElwain said that Lisa Murphy, who is involved with organizing the seminar, had requested that an additional speaker be found, preferably with banking and/or insurance experience, to also speak at the seminar. 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.

On a call for committee reports, L. McElwain first asked Court Traver about the Fee Simple Newsletter Committee report, upon which C. Traver said that since the last Fee Simple had just been sent out, very little work had been yet done for the next Fee Simple. Thereafter a discussion was held as to what articles various persons attending the meeting might be working on. J. Wang said that she was preparing an article on prepayment penalties and W. Nusbaum said that he was willing to prepare an article on subleases. L. McElwain then suggested that an article on ground leases might be appropriate. Thereafter it was pointed out that if a ground lease article was to be prepared, it should be on a specific issue or issues pertaining to ground leases, since ground leases were discussed generally in the Third Edition of the Landlord-Tenant Law and Practice Handbook published by Virginia CLE. C. Traver stated, however, that there had been recently cases addressing the issue of when a ground lease may be extinguished in a situation where the landlord has declared bankruptcy. G. McMullan said that one of the topics for today's Advanced Real Estate Seminar was to have this issue addressed as to all lease situations where a landlord has declared bankruptcy.

As the discussion continued concerning other articles that might be of interest for publication in the Fee Simple, E. Waugaman thought that the issue of land sales under installment sales contracts would make a good topic in light of whether such a contract would survive the bankruptcy of the seller, and E. Zimmerman said that he would contact an attorney he knows in the northern Virginia area to write on the subject of land contracts, since that attorney has recently been extensively involved with them. E. Zimmerman also said that he would volunteer one of his associates to write an article on the actual meaning of time of the essence clauses.

The topic of 1031 tax deferred exchanges was raised and was discussed as a possibility for an article. D. Helcher said that there had been recent issues raised as to 1031 exchanges when tobacco allotments were involved. L. McElwain said that he would contact Louis Rogers on preparing an article on various current aspects of 1031 exchanges, such as the use by tenants in common as to this tax deferral device.

A discussion was then held as to the Membership Committee. L. McElwain said that he, Randy Howard, and C. Traver had recently met and discussed the future of the Section from a membership standpoint. The consensus from the meeting was that there was a danger of the Section gradually losing members; especially since the Section was not obtaining younger members to replace those members who would retire as practicing real estate lawyers. L. McElwain first read a list that was prepared by R. Howard and him as to the various kinds of real estate practices there were by those persons who practiced real estate law. He said that a major purpose of this Section was to educate Virginia's real estate lawyers as to those kinds of real estate practice and a major purpose of the VBA Real Estate Council was to protect real estate lawyers from ill-prepared or poorly considered statutes affecting real estate law in Virginia.

L. McElwain said that he thought that in order to better serve Virginia's real estate lawyers three new committees should be created, with the first one being a liaison committee with the VBA in order to assist them as to better reviewing new laws proposed by the legislature.

The second committee that L. McElwain suggested be created was one that would be a liaison committee with the Virginia Clerk's Association. A discussion was then held as to G. McMullan's past attempt to achieve coordination with the Clerk's Association, which attempt was unsuccessful for reasons that were discussed. The reasons seemed to be ones primarily associated with the Clerk's perception that the VSB had not that much to offer that would benefit the Clerk's Association and a general reluctance to have outsiders attend their meetings.

The attendees at the meeting determined that it might be best if G. McMullan could discuss with Clerks located in jurisdictions near to him if they thought there might be a need for such a liaison committee, and would they support such an idea that might allow a VSB member to attend their meetings and one of their members to attend meeting of this Section or the meetings of the VBA. Contingent on such an acceptance of the idea by the Clerk's Association, a motion was made, seconded, and approved that such a committee be formed with G. McMullan to initially chair the committee and have a right to appoint sufficient members to the committee should no one volunteer to serve. A motions was also made at the same time, seconded, and approved that a committee be created to serve as a liaison committee with the Virginia Bar Association. As for the Committee to serve as a liaison committee with the Clerk's Association, S. Pesner said that she thought that there should be representatives on the Committee that came from all parts of the Commonwealth so that the Clerks could identify with representatives of the Committee. Thereafter a discussion occurred, primarily by C. Traver and E. Zimmerman, as to ways this Section's newly formed Clerks Liaison Committee could provide valuable services to the Clerk's Association. Assistance in helping upgrade the technology in the smaller and less well funded Clerk's offices, support for the legislation that the Clerk's Association wanted passed, and exploring the possibility of providing assistance to the smaller Clerk's offices by volunteer lawyers was discussed.

The third committee that L. McElwain suggested be established was one which dealt with the financial aspects of real estate, and R. Howard presented to the Board and Representatives the reasons for forming such a committee. R. Howard pointed out that the practice of real estate law has evolved so that many lawyers spend a significant amount of their time in handling the financial aspects of real estate transactions by representing lenders and developers of commercial projects who become borrowers. He said that there is no other section within the Virginia State Bar that has a section devoted to this type of practice, and he therefore thinks it might be a committee that would attract new members to the Section. At this point in the meeting, a suggestion was also made for consideration that it might be wise to change the name of the Section so that it included a reference to the financial aspects of real estate law. L. McElwain said that before we enter into a discussion as to such a name change, we should first determine if the Section would be allowed to change its name.

G. McMullan suggested at this point that it might be a good idea to combine any finance committee with the Commercial Real Estate Committee. L. McElwain and S. Pesner also wanted to obtain the names of those lawyers who worked in the finance area including as in-house lawyers for those lenders and borrowers (such as Ryan Homes) who loaned or borrowed significant amounts of money in Virginia.

Next, G. McMullan reported briefly for the Commercial Real Estate Committee, stating that everyone on it were submitting articles for the Fee Simple in a prescribed order based on two teams of two persons each preparing articles by a prescribed date.

The meeting then discussed other methods of raising the membership within the Section. M. Barney said that he recalled from the past that when a seminar that dealt with the "first day in practice" concept was regularly presented, it assisted in raising the membership of the Section. R. Richmond said that recently the first day in practice seminars had decreasing attendance. Thereafter a discussion was held as to reasons for the Section not acquiring new members, such as the fact that the bigger Virginia law firms are not supporting the efforts of the Sections within the Bar. L. McElwain said that the dues for the Section will be increased to $25 per member, which is at a level with the most expensive Sections to join. E. Zimmerman also pointed out that formerly almost all lawyers at least engaged in general real estate closings, which is no longer the case.

One result from the foregoing discussion was a motion made, seconded, and passed to include in the Fee Simple an invitation to join the Section. Another was that L. McElwain will try to get a list of all lawyers who are members of the Section from VSB headquarters. C. Traver suggested that consideration should be given to the idea of making Section members join a committee, and if they did not join a committee, select a committee for them to join. Another suggestion was that at least each board member should be required to be involved actively in the work of a committee. E. Zimmerman stated that we must obtain a list of the Section's membership and also a notice when a lawyer joins the Section. Thereafter, anyone joining should be promptly contacted in order that some member of the Section could welcome them and discuss getting them involved with a committee. E. Zimmerman went on to say that Area Representatives or Board members should maintain contact with members within their areas and especially those members who have just joined the Section and ask them what is going on as to real estate law in their practice and how can the Section help them. E. Zimmerman pointed out that no Section member will be willing to be active in the Section unless the Section indicates it is also willing to help that member.

L. McElwain then stated that there was no report from the Creditors Rights and Bankruptcy Committee, since S. Wood was absent, and the same was the case as to the Land Use and Environmental Committee since S. Blaine was absent. S. Pesner said for the Ethics Committee said that her Committee had nothing that it was required to do at the current time. One suggestion for the Ethics Committee was to make a study of the feasibility of having law firms owning title agencies. A warning as to this kind of activity was made to the effect that it may be dangerous to take a stand on various ethics issues, since this is more within the province of the State Bar itself. The consensus of the meeting seemed to be that the Ethics Committee should not be proactive, but be reactive; i.e., not produce recommendations or opinions unless specifically called upon to do so by the Bar.

L. McElwain stated that there would be no report from the Residential Committee since C. Meier was not present at the meeting. E. Waugaman for the Title Insurance Committee reported that House Bill 2821 passed and will go into effect if the Governor signs the Bill. This bill authorizes title companies to establish risk rates pursuant to negotiations for what will be charged for title insurance.

L. McElwain reported that there is nothing new as to the writing contest by law students, and he pointed out that the time for nominations for the Gardner DeMallie award would be necessary soon.

D. Dewing stated that the Technology Committee had turned in its report, and that Betty Jean Ostergren with Virginia Watchdog was on television arguing her case about the need to eliminate on-line access to court records. D. Dewing informed the Section as to how her television presentations and other presentations by her could be accessed.

L. McElwain then again reminded everyone at the meeting as to the next meeting being scheduled for June 18 at Virginia Beach.

Upon motion made and seconded the meeting was adjourned.

Respectfully Submitted,

C. Grice McMullan, Jr.

Secretary

 

The next meeting of the Real Property Section of the Virginia State Bar will be held on February 25, 2005 at Kingsmill Resort. The schedule is as follows: Kingsmill Resort 1010 Kingsmill Road Williamsburg, VA 23185 (757) 253-1703

10:30 - 11:30 Area Representatives and Board of Governors Meeting
11:30 - 12:00 Voluntary meeting with the Real Property Section of the Virginia Bar Association
12:00 noon A Buffet Lunch is offered at a cost of $15.99. All are invited.
1:00 Advanced Real Estate Seminar begins.

AGENDA

"SPRING" MEETING OF THE BOARD OF GOVERNORS
AND AREA REPRESENTATIVES
OF THE REAL PROPERTY SECTION OF THE VIRGINIA STATE BAR
10:30 AM
FEBRUARY 25, 2005
THE RANDOLPH ROOM, KINGSMILL RESORT
WILLIAMSBURG


Welcoming remarks and introductions - McElwain

Review/Approval of Minutes from the June 18, September 24 2004, and January 21, 2005, meetings - McElwain

Financial Report - McMullan

Seminars Report - McElwain

Committee Reports - Committee Chairs

Old Business

New Business

Adjournment

 

Notes:

Our meeting is scheduled for 10:30-11:30, to be followed by an informal meeting with the leadership of the Real Property Section of the Virginia Bar Association. Everyone is encouraged to attend. Beginning at noon there is a buffet lunch offered ($15.99)

Nominations for the Gardner G. DeMallie, Jr., Continuing Legal Education Award will be sought.