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CounseL’s Corner
The Home Builders Association of
Virginia, the Peninsula Housing &
Builders Association, NAHB and
certain member builders recently
enjoyed a significant victory in an ongoing legal
battle over a state law enacted in 2010 to provide
temporary relief to the building industry. That
law, for which HBAV was the leading advocate,
provides a short-term benefit to the building
industry by delaying certain cash proffer payments
until a time when such payments might be more
quickly recouped through sales.
The law in question, codified as § 15.2-2303.1:1
of the Code of Virginia, provides that, notwith-
18 HBaV annual RepoRt 2012
Leading the charge
HBaV and peninsula developers challenge
James City County cash proffer policy
by Edward A. Mullen, Esq.
standing the terms of any cash proffer agreement,
cash payments owed on a per-unit/per-home basis
may not be collected or accepted by a locality prior
to the final inspection on the subject property or
after the certificate of occupancy has been issued.
Prior to July 1, 2010, when the statute took
effect, localities were authorized to accept cash
proffer payments at any time agreed to by the
parties. This allowance resulted in many localities
demanding cash proffer payments at a point so
early in the development process (e.g., site plan
approval or building permit approval) that it could
take months or even years for builders to recoup
their costs through sales, if at all. Acknowledging
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the impact of the economic downturn on the building
industry, the General Assembly elected to curb
this local practice for a limited period of time (the
statute is now set to expire July 1, 2017).
Application was not uniform
Unfortunately, application of the statute has not
been uniform across the Commonwealth. Since its
enactment, certain local governments have questioned
whether the statute applies to cash payments owed
pursuant to proffer agreements entered prior to the
statute’s July 1, 2010, effective date.
As a result, in July 2010, HBAV asked Delegate
Chris Peace of Hanover to support the building industry
by requesting an official opinion of the Virginia
attorney general declaring that the statute applied
to proffer agreements entered prior to its effective
date. Peace gladly made the request and on Sept.
13, 2010, Attorney General Ken Cuccinelli opined
that, so long as it is effective, the plain language of
the statute and its legislative history make clear that
the General Assembly intended the statute to be
retroactive (i.e., applying to proffers formed prior
to its effective date).
Even after the attorney general’s opinion was
issued, a very few localities, including James City
County and Chesterfield County, still refused to
apply the statute to per-lot cash proffers formed prior
to July 1, 2010, without condition. As a result, the
2011 General Assembly passed, and the governor
signed, an act to extend the effective period of
the statute from its original expiration (July 1,
2014) until July 1, 2015. It also allows landowners
forced to enforce their rights under the statute to
collect reasonable attorney’s fees and costs from
recalcitrant localities.
Further, the 2012 General Assembly passed
legislation to extend the statute’s sunset date until
July 1, 2017, and to prohibit localities from penalizing
landowners for asserting their rights under the