Key Takeaways
- Virginia requires the Disclosure of Brokerage Relationship form at the first substantive discussion
- The disclosure form explains the different types of brokerage relationships available
- Licensees must disclose material adverse facts about property condition to all parties
- Agency disclosure must occur before confidential information is shared
- Brokers must retain copies of all disclosure forms for at least 3 years
Agency Disclosure Requirements in Virginia
Virginia has specific requirements for when and how agency relationships must be disclosed. Proper disclosure protects all parties and ensures informed consent.
Timing of Disclosures
First Substantive Discussion
Agency disclosure must occur at first substantive discussion about a specific property:
| Trigger | Disclosure Required |
|---|---|
| Discussion of specific property | Yes |
| Discussion of specific terms | Yes |
| Discussing price or financing | Yes |
| General market conversation | No |
| Providing general listings | No |
Before Confidential Information
Agency disclosure should occur BEFORE:
- A party shares confidential information
- Financial details are discussed
- Negotiation strategy is revealed
- Motivation or urgency is disclosed
Why This Matters: If someone shares confidential information before knowing who the licensee represents, that information could inadvertently be used against them.
The Disclosure of Brokerage Relationship Form
Virginia requires use of the Disclosure of Brokerage Relationship form, which:
- Explains different types of relationships
- Identifies who the licensee represents
- Describes duties owed in each relationship type
- Must be provided at first substantive discussion
Form Contents
The disclosure form must include:
| Element | Description |
|---|---|
| Relationship Types | Standard agent, limited service agent, customer |
| Duties Explained | What the licensee will do for each type |
| Dual Agency | Explanation if dual agency is possible |
| Signature | Acknowledgment of receipt |
Disclosure Duties for Property Condition
Material Adverse Facts
Virginia licensees must disclose to all parties:
- Material adverse facts about the property's physical condition
- Facts that the licensee knows which affect the property's value or desirability
- Latent defects (hidden problems not apparent to a reasonable buyer)
What Must Be Disclosed
| Must Disclose | Examples |
|---|---|
| Structural defects | Foundation problems, roof issues |
| Water problems | Flooding, leaks, water damage |
| Environmental hazards | Lead, asbestos, mold (if known) |
| Unpermitted work | Additions or changes without permits |
| Material facts | Known issues affecting value |
What Virginia Does NOT Require Disclosure Of
Virginia law provides that certain facts are NOT material:
| Non-Material Facts | Explanation |
|---|---|
| Deaths on property | Including natural death, murder, suicide |
| Disease/illness | Prior occupant had communicable disease |
| Sex offender status | Nearby registered sex offenders |
| Felony conviction | Of prior occupants |
Note: While not required to volunteer this information, licensees should answer truthfully if directly asked.
Documentation and Record Retention
Required Records
Brokers must maintain:
- All brokerage engagement agreements
- Disclosure of Brokerage Relationship forms
- Transaction files and correspondence
- Escrow account records
Retention Period
All transaction records must be kept for a minimum of 3 years after:
- The transaction closes, OR
- The listing/engagement expires or terminates
Record Storage
Records can be maintained:
- At the main office
- At a branch office
- In electronic format (if properly secured and retrievable)
Virginia Disclosure Requirements Summary
| Disclosure Type | When Required | To Whom | Form/Method |
|---|---|---|---|
| Brokerage Relationship | First substantive discussion | All parties | Disclosure of Brokerage Relationship form |
| Dual Agency | Before acting as dual agent | Both parties | Written consent |
| Material Adverse Facts | As soon as known | All parties | Written recommended |
| Lead-Based Paint | Before contract (pre-1978 homes) | All buyers | Federal disclosure form |
| Property Condition | When known | Buyers | Virginia disclosure forms |
What type of property information does Virginia law exempt from disclosure requirements?
How long must Virginia brokers retain transaction records?