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HB39 • 2026

Duty of settlement agent; restrictive covenants.

An Act to amend and reenact § 55.1-903 of the Code of Virginia, relating to duty of settlement agent; restrictive covenants.

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Simon
Last action
2026-04-08
Official status
Acts of Assembly Chapter
Effective date
Not listed

Plain English Breakdown

The official source material does not provide information on consequences if settlement agents do not comply with these requirements.

Settlement Agent Notification for Home Buyers

This law requires settlement agents to inform home buyers about their right to remove certain restrictive covenants found during a property title search.

What This Bill Does

  • Requires settlement agents to notify purchasers of residential real property about the purchaser's right to remove prohibited restrictive covenants that are disclosed as part of a title search.

Who It Names or Affects

  • Settlement agents involved in real estate transactions of residential properties.
  • Home buyers purchasing residential real estate.

Terms To Know

settlement agent
A person or company that handles the financial and legal details during a property sale, including transferring ownership documents and managing money exchanges.
restrictive covenant
An agreement in a deed that limits how the land can be used, such as not allowing certain types of buildings or activities on the property.

Limits and Unknowns

  • The bill does not specify what happens if settlement agents do not follow these requirements.
  • It is unclear whether this law applies to all real estate transactions or only specific ones involving residential properties.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

HB39ASC1

2026-02-24

General Laws and Technology Amendment

Plain English: The amendment modifies the duties of a settlement agent by adding restrictions on certain types of property covenants.

  • Adds a new section under § 55.1-300.1 to include additional requirements for settlement agents.
  • Inserts language after 'covenant' to specify that certain restrictive covenants prohibited by § 36-96.6 are not allowed.
  • Modifies the text after 'property' to remove a reference and add new wording related to the restrictions.
  • The exact nature of the changes might be unclear without understanding the full context of existing laws § 55.1-300.1, § 36-96.6.
  • Technical legal language may make it difficult to fully explain the amendment's impact.
HB39AS1

2026-03-05 • Committee

General Laws and Technology Amendment

Plain English: The amendment adds a new requirement for settlement agents regarding restrictive covenants on property.

  • Adds a reference to § 55.1-300.1 after 'right' in the bill text.
  • Inserts 'prohibited by § 36-96.6 that is' after 'covenant'.
  • Strikes out 'pursuant to § 36-96.6' and inserts 'and' after 'property'.
  • The exact impact of these changes on the duties of settlement agents is not fully explained in the provided text.
HB39EDOC

2026-03-09 • Senate

Senate Amendments

Plain English: The amendment adds references to specific sections of Virginia law regarding restrictive covenants and prohibits certain types of property restrictions.

  • Adds a reference to § 55.1-300.1 after the word 'right'.
  • Inserts 'prohibited by § 36-96.6 that is' after the word 'covenant'.
  • Strikes out 'pursuant to § 36-96.6' and replaces it with 'and'
  • The exact impact of these changes on settlement agents' duties is not fully explained in the provided text.

Bill History

  1. 2026-04-08 Governor

    Approved by Governor-Chapter 359 (effective 7/1/2026)

  2. 2026-04-08 Governor

    Acts of Assembly Chapter text (CHAP0359)

  3. 2026-04-01 House

    Fiscal Impact Statement from Department of Planning and Budget (HB39)

  4. 2026-03-31 House

    Enrolled Bill communicated to Governor on March 31, 2026

  5. 2026-03-31 Governor

    Governor's Action Deadline 11:59 p.m., April 13, 2026

  6. 2026-03-31 House

    Signed by Speaker

  7. 2026-03-31 House

    Enrolled Bill communicated to Governor on March 31, 2026

  8. 2026-03-31 Governor

    Governor's Action Deadline 11:59 p.m., April 13, 2026

  9. 2026-03-30 Senate

    Signed by President

  10. 2026-03-30 House

    Enrolled

  11. 2026-03-30 House

    Bill text as passed House and Senate (HB39ER)

  12. 2026-03-10 House

    Senate amendments agreed to by House (99-Y 0-N 0-A)

  13. 2026-03-09 Senate

    Read third time

  14. 2026-03-09 Senate

    Engrossed by Senate as amended

  15. 2026-03-09 General Laws and Technology

    General Laws and Technology Amendment agreed to

  16. 2026-03-09 Senate

    Passed Senate with amendments Block Vote (40-Y 0-N 0-A)

  17. 2026-03-06 Senate

    Rules suspended

  18. 2026-03-06 Senate

    Passed by for the day

  19. 2026-03-06 Senate

    Constitutional reading dispensed Block Vote (on 2nd reading) (39-Y 0-N 0-A)

  20. 2026-03-06 Senate

    Passed by for the day Block Vote (Voice Vote)

  21. 2026-03-04 General Laws and Technology

    Reported from General Laws and Technology with amendments (15-Y 0-N)

  22. 2026-02-25 Housing

    Assigned GL&T sub: Housing

  23. 2026-02-24 Housing

    Senate subcommittee offered

  24. 2026-02-03 Senate

    Constitutional reading dispensed (on 1st reading)

  25. 2026-02-03 General Laws and Technology

    Referred to Committee on General Laws and Technology

  26. 2026-02-02 House

    Read third time and passed House Block Vote (99-Y 0-N 0-A)

  27. 2026-01-30 House

    Read second time and engrossed

  28. 2026-01-29 House

    Read first time

  29. 2026-01-27 General Laws

    Reported from General Laws (21-Y 0-N)

  30. 2026-01-23 House

    Fiscal Impact Statement from Department of Planning and Budget (HB39)

  31. 2026-01-22 Housing/Consumer Protection

    Subcommittee recommends reporting (10-Y 0-N)

  32. 2026-01-19 Housing/Consumer Protection

    Assigned HGL sub: Housing/Consumer Protection

  33. 2025-12-23 House

    Prefiled and ordered printed; Offered 01-14-2026 26100583D

  34. 2025-12-23 General Laws

    Referred to Committee on General Laws

Official Summary Text

Duty of settlement agent; restrictive covenants.
Requires a settlement agent to notify the purchaser of any residential real property of the purchaser's right to remove a prohibited restrictive covenant that is contained in an instrument affecting the title of the property and disclosed as the result of the title search performed pursuant to the real estate transaction.

Current Bill Text

Read the full stored bill text 
An Act to amend and reenact §
55.1-903
of the Code of Virginia, relating to duty of settlement agent; restrictive covenants.
Be it enacted by the General Assembly of Virginia:
1. That §
55.1-903
of the Code of Virginia is amended and reenacted as follows:
§
55.1-903
. Duty of settlement agent.
The settlement agent shall cause recordation of the deed, the deed of trust, or the mortgage or other documents required to be recorded and shall cause disbursement of settlement proceeds within two business days of settlement. A settlement agent may not disburse any or all loan funds or other funds coming into its possession prior to the recordation of any instrument except (i) funds received that are overpayments to be returned to the provider of such funds, (ii) funds necessary to effect the recordation of instruments, or (iii) funds that the provider has by separate written instrument directed to be disbursed prior to recordation of any instrument. Additionally, in any transaction involving the purchase or sale of an interest in residential real property, the settlement agent shall provide notification to the purchaser of
(a)
the availability of owner's title insurance as required under §
38.2-4616
and (b) the purchaser's right

under §
55.1-300.1
to remove a restrictive covenant prohibited by §
36-96.6
that is

contained in an instrument affecting the title of the property
and
disclosed as the result of a title search performed pursuant to the transaction
.