Virginia Enacts New Laws on Settlement Agents and Notaries

Virginia recently enacted four laws imposing new duties, written disclosures, conduct prohibitions, and education requirements on settlement agents and notaries public.

Settlement Agents

HB 1358 requires settlement agents for real estate transactions who know a subject property is valued, assessed, and taxed by a local authority under a special assessment on the basis of use must provide written notice to the purchaser prior to settlement, and maintain proof of this disclosure for five years.  The Department of Taxation will be developing a disclosure form for agents’ use.  The law becomes effective on January 1, 2027.

In any transaction involving the purchase or sale of residential real property, HB 39 will require settlement agents to notify purchasers of their right to remove any prohibited restrictive covenants (e.g., covenants based on race, color, religion, national origin) that were found during the title search.  This law becomes effective on July 1, 2026.

Notaries Public

HB 163 will require, among other things, that applicants for a notary public commission successfully complete four hours of approved education consisting of best practices and procedures for notaries, and verification of identity.  Two hours of education will be required to renew a commission.  In both instances, one hour of education must be about real estate fraud and financial exploitation of the elderly, including training on current trends and how to recognize fraud and financial exploitation. The new education requirements will take effect July 1, 2027.

Beginning on July 1, 2026, records of nonelectronic notarial acts performed must be maintained for at least 5 years from the date of the transaction.

HB 163 also imposes a new duty on settlement agents to exercise ordinary care to reasonably ascertain the identity of a property seller through any one of five listed identification methods.  A settlement agent who uses any of the listed methods will not be liable for any act or omission resulting from relying on such identification information when settling and recording the mortgage or deed, unless the agent had actual knowledge the information was false, or there was gross negligence or willful misconduct on the part of the agent.  This part of HB 163 becomes effective on July 1, 2026.

Lastly, HB 1262 provides the Virginia Attorney General with authority to issue a civil investigative demand if there is reasonable cause to believe that a notary is offering or providing legal advice on immigration or other legal matters, or is advertising using certain titles such as “notario,” “notario publico,” “licenciado,” or other non-English words which imply that the notary is authorized or licensed to practice law in Virginia.  The AG can bring a civil action for injunctive relief and restitution, as well as reasonable expenses of the investigation and attorney fees.  This law becomes effective on July 1, 2026.