Virginia State Bar

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Real Property

A Section of the Virginia State Bar.

Meeting Minutes - January 22, 2010

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, and Section Area Representatives, with section members and other attendees, was held at the Williamsburg Inn, in Williamsburg, Virginia on Friday, January 22, 2010, commencing at 1:15 p.m.

The following persons were in attendance in person: Joe Cochran (Chair), Paul Melnick (Sec/Treas), Paula Caplinger, Michelle Peters, Amanda Smith, Will Sleeth, Jean Mumm, Ed Waugaman, Ray King, Philip Hart, Steve Blaine, Brian Dolan, Rick Richmond, Christina Meier, William Nusbaum, Lynda Butler, Chip Land, Janie Rhoads, Grice McMullan, Mike Barnes, Ken Dickinson, David Helshcher, Page Williams, Howard Gordon, Larry McElwain, Susan Pesner, Mark Graybeal, Courtland Traver, Eric Zimmerman.

The following persons were in attendance via conference call: Paul Bellegarde (Vice-Chair), Susan Walker, Todd Condrin, Whitney Levin, Lisa Graziano, Steve Gregory, Pam Sellers, Neil Kessler.

Minutes of Last Meeting
Joe Cochran called the meeting to order and, with Secretary Paul Melnick, presented the minutes of the September 11, 2009 meeting of the Real Property Section Board of Governors (at Charlottesville). Joe noted that on page 4 there was a typographical error where Rick Richmond's name was set forth as Rich Richmond. With that correction taken into account, and upon motion duly made, and seconded, the minutes were unanimously approved as written.

Joe Cochran then presented the minutes of the November 2, 2009 conference call meeting of the Real Property Section Board of Governors and upon motion duly made, and seconded, the minutes were unanimously approved as written.

Financial Report
Joe Cochran handed out a financial report which is attached to and made a part of these minutes as an Exhibit. Joe noted that we are doing fine concerning cash flow and the budget. He noted that the $300.00 to be spent on the Williamsburg Inn meeting room and telephone for the conference call was not reflected on the report. Also VA CLE has requested our Section to contribute $2,500.00 toward the Advanced Real Estate Seminar which the Board has approved. Joe noted that we usually have about $10,000.00 on hand at the end of the year. It is a "use it or lose it" situation.

Ed Waugaman inquired as to the reason for the $2,500 request from VA CLE. Joe explained that the seminar is going to be more expensive this year. Also, the seminar room is smaller this year so there will be less people participating.

Joe noted that next year's budget will not be much different from this year's budget. The budget is due February 12th. He and Dolly Schaffner will work on the budget.

Fee Simple
Lynda Butler presented the report concerning the Fee Simple publication. She set forth the expenditures for the November issue of the Fee Simple (with cents rounded downward):

Printing: $4,346.00
Mail house: $ 306.00
Postage: $1,133.00
Reimburse Law School $1,373.00

Lynda explained the change concerning how Felicia will be reimbursed in the future. In the past, the law school received one check and cut Felicia a check directly for her services. Now she has to be paid directly-2 checks will be cut now, one to the law school and one to Felicia.

Lynda also detailed the distribution of the Fee Simple. She stated that with the November issue, there was a digital distribution. There were 6000 hits with that link. She explained new rules which could increase costs for mailing the Fee Simple. This time "saddle stitching" was used on the hard copies of the Fee Simple because it creates a smaller, flatter book-it has to look flat and be flat for the lower postage. Spiral bound books may be billed as an "irregular shape" which is more postage.

Also, if the costs of printing the Fee Simple are more than $5,000.00, then the VSB will need to go through a bidding process which will add time to getting the publication out. One proposal to reduce the costs of the Fee Simple is not including the various lists in the Fee Simple in hard copy-only articles would be included with links to the various lists. There was then a general discussion of email vs.mail for the Fee Simple with various opinions stated. Ed Waugaman asked whether it would be cheaper to digitally produce the Fee Simple on a CD to which Lynda replied that she did not know. Joe Cochran mentioned that in the Fall there is a meeting of the Chairs of the VSB Sections and he was impressed with how many of the Sections send their newsletters by email with a portion sent in hard copy form by mail. There was then a discussion of what should be mailed with the hard copy-titles of articles, a table of contents? Lynda noted that oftentimes one cannot glean the content of an article solely by its title. Lynda also commented that some people just prefer paper and some prefer an electronic version. She noted that the more options you provide, the more expensive the publication will be. She took a quick poll of the meeting attendees concerning their preferences with the following results:

Prefer hard copy 16
Prefer emailed version 16
Would prefer CD 3

Joe Cochran noted that the November issue printing costs of the Fee Simple were well within the budget. A discussion continued over concerns that an email attachment containing the Fee Simple would be very large and Lynda stated that a link to the copy of the Fee Simple would be emailed, not an actual document attachment. Lynda noted that a poll was conducted among the Section members which favored sending a hard copy. Neil Kessler noted that we can afford to send a hard copy and we are very fortunate in that regard. A hard copy is nice to have around and it provides good exposure for our Section. A discussion continued about emailing, versus sending a hard copy and costs. Joe Cochran said that he would like to hear from folks on this issue. Bill Nusbaum proposed using something like Survey Monkey to get the sentiment of our Section. Lynda noted that the most recent survey on the subject was in the May 2008 Fee Simple. Joe recommended that we look at this issue in the next 30 days and discuss it at the next Board meeting.

After the conclusion of Lynda's report, Susan Pesner noted that Lynda Butler just was named a Fellow at the Virginia Law Foundation.

Area Rep Nominations - Susan Pesner nominated her associate, Mark Graybeal, to be an Area Representative. He wrote an article in the recent Fee Simple about being a new real estate attorney. This nomination was moved, seconded, and approved by a unanimous vote.

Future Seminars
A. ADVANCED REAL ESTATE SEMINAR - Joe Cochran reported that this seminar will be held February 26th , and 27th at the Kingsmill Resort in Williamsburg, VA. Section members should have signed up by now. Larry McElwain reported that he, Nancy Kern and Joe Cochran worked on this seminar. He stated that he wants to "beef up" the program committee-it is very hard to come up with seminar topics. This program went through about 4 or 5 drafts. He would like to see some interest of section members to serve on the program committee. He described the contents of the Advanced Real Estate Seminar including the Green section, and the breakout sections. He would like feedback on the residential side regarding subjects for the future. This year, the seminar is limited to 75-80 attendees. He stressed that people need to sign up ASAP because there could be a sell out crowd for the seminar. The room used previously for the seminar was not available this year.

B. ANNUAL SEMINAR - Joe Cochran reported that the legislative and case law updates will be in the morning, as well as an ethics section. Topics were mapped out in November. He stated that he needs to talk with Nancy concerning nailing down any outstanding items.

C. VSB ANNUAL MEETING JOINT SEMINAR - Paul Melnick reported that our Section is going to partner with the Construction Law Section and the Tax Section to put on a joint seminar. The subject concerns 1031 Exchanges when construction is involved. Paul read the proposed title and a summary of the program. It will be presented as a panel discussion. Paul stated that two speakers have committed and that the seminar is developing satisfactorily. The names of the speakers and their bios, and the title is due by February 1st.

Unfinished Business
A. "BOARD AND AREA REPRESENTATIVE HANDBOOK" - Joe Cochran reported that the Northern Virginia Area Rep meeting went well with 6-7 in attendance. He stated that he wants to make it down to Roanoke for such a meeting.

B. PURCHASE OF "TITLE EXAMINER'S HANDBOOK" - Joe stated that this project is dead at this time-there is no report to present.

C. BYLAWS REVISION - The revision will be brought up and discussed at the Spring Section meeting as a tee off for the Annual meeting where the revisions can be voted on.

Legislative Matters
Grice McMullan led review of certain proposed legislation which was also discussed at the Virginia Bar Association meeting prior to our meeting today. Several of the proposed/discussed bills were briefly reviewed with some discussion. Among those reviewed were as follows:

- Changing the provisions of Section 58.1-803. Grice stated that a couple of years ago these taxes were increased by 67% to 25 cents. This section drops down the taxes in $10,000,000 increments and a dime was added to each level causing the percentage of tax for the higher levels to be much higher than the percentage of tax for the lower levels. They have discussed this with the legislative subcommittee and the VBA Board recommended that this issue be looked at.

- Trying to drop the credit line Deed of Trust statute of limitation from 40 years to 20 years if there is no maturity date stated. No motion was put onto the table on this measure so it is not going to happen.

- Changing the law after the Town of Culchester case involving the priority of condo and HOA association assessments if there is a first deed of trust on property. After this case it is very difficult for associations to collect assessments because they come after the deed of trust in priority-the deed of trust has to be satisfied first. The issue was trying to make it so that after a foreclosure to collection assessments, the property would pass "subject to" the deed of trust. The bankers lobby stated, however, that they have not done a credit check on any foreclosure buyer. There is an ongoing fight on this.

-Disbursements in foreclosures.

-Changes to the law of adverse possession (brought up by a private citizen).

-Dealing with the issue of tax assessments being higher than the fair market value of the property in the current economy. This was tabled-they will discuss this with the Clerks.

-Dealing with the multi state problem where localities are taxing apartment complexes as condominiums before a condo certificate is issued. The proposed law would not allow this. This would be impossible to get passed.

-Dealing with issues surrounding storm water ponds, lawsuits connected therewith, and the fact that the Fee Simple interest in the ponds is often held by an association.

-Dealing with inter pleaded jurisdiction statutes.

-A law to monitor intermediaries in 1031 exchanges.

-Eliminating rent control statutes.

[Consistent with prior years' "discussions" regarding such proposed legislation, this discussion and reporting was for informational purposes only, and was not intended to elicit any formal endorsement(s) for any proposed legislation (and accordingly, none were provided). As covered in prior years' meetings, the Virginia State Bar is an arm of the Supreme Court, and accordingly, neither it, nor any of its committees or law sections, is permitted to lobby the General Assembly on legislative matters. In this regard, the Virginia Bar Association is the lobby group in the state and if any formal position is to be taken on any of the legislation that is pending, it should be done through the VBA].

New Business
COMMITTEE WORK - Joe Cochran reported that on November 2 there was a conference call meeting where the expectations for Section committees was discussed. Four expectations were approved:

1. Quarterly Committee meetings, in person or conference call;

2. Contribute one Article for the Fee Simple;

3. Develop a well defined topic for one seminar; and

4. Be available to handle and respond to substantive law questions in their area.

Joe also proposed deadlines for Fee Simple article ideas to be submitted by the Section Committees to the Fee Simple committee (the "gatekeeper") as follows: May Fee Simple Deadline will be February 15th ; and the November Fee Simple Deadline will be August 15th. The deadline for getting seminar topics submitted to the Program Committee will be October 1st of each year. [Joe Cochran sent out an email subsequent to this meeting correcting the deadline for submission of seminar topics to the Program Committee to September 1st and stating that in 2010 the deadline for the article ideas for the May Fee Simple will be March 1st ]

It was discussed whether these expectations should be included in the bylaws. Larry McElwain stated that they should be in a separate policy and procedure manual, not in the bylaws. Joe Cochran noted that the perfect place for these items would be in the Board and Area Rep handbook. Joe stated that he will send out these committee policies by email and he will be a catalyst to make sure that they are fulfilled. Concerning the Board and Area Rep handbook, Joe stated that everyone who went to the Area Rep lunches received a handbook. Joe stated that these committee policies will also be noted in the Fee Simple. Susan Pesner noted that Area Reps should be on the lookout for cases that were won by attorneys in their area so they can ask the attorney to write an article for the Fee Simple. Joe agreed that this would be a good job for the Area Reps.

Joe also brought up that the list serve subject also was extensively discussed during the Nov. 2 conference call. He has not been able to follow up with Dolly Schaffner or Doug Dewing on this, however. This will be on his list of things to do. Joe explained that Dolly is our liaison with the VSB.

Subcommittee Reports
MEMBERSHIP: We now have 1,991 members up from 1,957 in September. Usually, our Section has around 2,000 members. The Area Rep lunches have been helpful in generating interest in our Section-the new members coming in as Area Reps were mentioned.

FEE SIMPLE: Lynda Butler stated that she needs articles. She stated that the subcommittees have been producing articles on a regular basis. Susan Pesner stated that Craig Erdman is now working for HUD doing investigations. Also the Alaska RESPA settlement case was discussed.

PROGRAMS - Joe Cochran stated that topic ideas are needed.

COMMERCIAL REAL ESTATE - Bill Nusbaum stated that the written report is in the recent Fee Simple.

CREDITOR'S RIGHTS AND BANKRUPTCY - Phil Hart reported that next week will be the first meeting of the year. They will have a Fee Simple article this year as well as a seminar topic. He likes the idea of the deadline dates. A new member joined the committee: Chris Jones. He would also like to have someone on the committee from the Hampton Roads area.

EMINENT DOMAIN - Chuck Lollar had a committee meeting prior to this Board meeting.

ETHICS - Mark Graybeal reported that Susan Pesnerjust heard from Jim McCauley and had to leave the room. Therefore he reported on her behalf that the attorney acting as settlement agent needs to put his/her name on the settlement statement as the Settlement Agent, and not his/her firm name. This is because the CRESPA bond is issued to individual attorneys and not their firms. A lay settlement company does not need to put an individual's name on the settlement statement, however.

RESIDENTIAL REAL ESTATE - Barbara Goshorn is looking for more Quick Tips for the Fee Simple.

Ed Waugaman stated that the Virginia Bar Association needs members. He said that the dues are $200.00 plus section dues. They need to have cross membership with the Virginia Bar Real Property Section. He stated that if you are not a member of the VBA, you are getting a "free ride" because they are doing work on your behalf. There is going to be a "2 for 1" membership. Grice McMullan also discussed information about the Real Estate Section of the VBA and the importance of real estate attorneys being involved with the development of legislation. Rick Richmond discussed the subject of TOD for real estate.

Future Meeting Date
The next meeting will be February 26th at the Kingsmill resort. Joe Cochran will send out an email with details.

There being no further business, upon motion duly made, and seconded, the meeting was adjourned at 2:35 p.m.

Respectfully Submitted,

Paul H. Melnick

Financial Report (.pdf) - January 22, 2010