Since the Virginia Supreme Court released its decision in Game Place, LLC v Fredericksburg 35, LLC a lot of attention has been focused on the longstanding requirement under the Virginia Statute of Conveyances, Virginia Code § 55-2, that any conveyance of an estate in land of more than five years be in the “form of a deed”. Several attributes of a deed are discussed in the opinion but the one held to be particularly lacking in Game Place was that of a “seal” as defined in Virginia Code § 11-3. Needless to say, this opinion has caused considerable consternation in the commercial real estate industry as the status of many existing leases was suddenly thrust into doubt.
Senate Bill No. 1422, introduced by Senator Obenshain, and House Bill No. 2287, introduced by Delegates Leftwich, Garrett and Murphy, unwind the Game Place conundrum. (Click here to read our original alert on Game Place). The essential provision of these identical bills amends Virginia Code § 55-2 to delete the phrase “term of more than five years” so that it no longer applies to leases. Also, a subsection B is added that has the effect of validating existing leases which lack the requisites of a deed as previously required. The bills go on to amend several other provisions of Title 55 to delete references to “deeds of lease” and the like.
Finally, the bills provide that this is emergency legislation that will take effect immediately upon passage. The Senate passed SB 1422 by a vote of 40-0 on January 17. The House passed HB 2287 yesterday, January 23, by a vote of 96-0.