CONSUMER PROTECTION LAWS

by Thomas A. Leggette

Introduction
Common Law
    A. In General
    B. Actual Fraud
   
C. Constructive Fraud
    D. Litigation

        1. Material Misrepresentation
                a. In General
                b. Present Intent Not to Perform
                c. Misrepresentation Must Lie Outside the Contract
                d. Fraud Must Be Based on a Common-Law or Statutory Duty
                e. Proximate Cause Between Misrepresentation and Damages
        2. Reliance
        3. Standard of Proof

        4. Statute of Limitations
        5. Remedies
                a. Rescission
                b. Damages
                c. Punitive Damages
                d. Specific Performance
                e. Attorney Fees
                f. Arbitration
        6. Equitable Defenses
        7. Economic Loss Rule
Statutes Affecting Consumer Contracts
   
A. In General
   
B. Federal Trade Commission Act
    C. Virginia Consumer Protection Act
        1. In General
        2. Personal, Family, or Household Transactions
        3. Suppliers
        4. Exclusions
        5. Prohibitions
        6. Enforcement
            a. In General
            b. Intent. 
            c. Enforcement of Other Statutory Provisions
        7. Civil Remedies
            a. Civil Enforcement
            b. Private Causes of Action
            c. Sovereign Immunity
            d. Cure Offers
            e.  Attorney Fees, Costs, and Settlement
        8. No Duty to Elect Between Remedies when also Suing for Fraud
    D. Additional Virginia Statutes Affecting Consumer Contracts.
        1. Virginia Home Sales Solicitation Act.
            a. In General
            b. Notice Requirements
            c. Three-Day Cooling Off Period
            d. Tenders Required
            e. Additional Remedies
        2. Prizes and Gifts Act.
            a. In General
            b. Exclusions
            c. Disclosures Required
            d. Remedies
        3. Virginia Membership Camping Act.
            a. In General
            b. Maximum Fifteen Contracts per Camping Site
            c. Enforcement
        4. Virginia Travel Club Act.
            a. In General
            b. Exemptions
            c. Disclosures.
                (1) Travel Services Agreement.
                (2) Public Offering Statement
            d. Prohibitions
            e. Enforcement
        5. Virginia Lease-Purchase Agreement Act.
            a. In General
            b. Disclosures
            c. Reinstatement
            d. Inapplicability of Other Laws
            e. Exempted Transactions
            f. Enforcement
        6. Comparison Price Advertising Act
    E. Motor Vehicles.
        1. Federal Odometer Disclosure Requirements.
            a. In General
            b. Prohibitions
            c. Enforcement
        2. Virginia Automobile Repair Facilities Act
        3. Virginia Motor Vehicle Warranty Enforcement Act (Lemon Law)
        4.
Federal Magnuson-Moss Warranty Provisions
        5. Virginia Collision Damage Waiver Act
    F. Credit
        1. Truth-in-Lending Act.
            a. In General
            b. Creditor Civil Liability  
            c. Remedies
        2. Federal Fair Credit Billing Act.
            a. In General
            b. Disclosure Reports to Consumer Reporting Agencies
            c. Credit Card Issuers
        3. Consumer Leasing Act
        4. Fair Credit Reporting Act.
            a. Requirements
            b. Consumer Rights
            c. Remedies
            d. Statute of Limitations
        5. Federal Equal Credit Opportunity Act
        6. Virginia Equal Credit Opportunity Act
        7. Virginia Credit Services Businesses Act
            a. In General
            b. Consumer Rights
            c. Enforcement
    G. Unclaimed Gift Certificates
Virginia Recovery Funds
    A. Contractor Transaction Recovery Fund
    B. Motor Vehicle Transaction Recovery Fund
    C. Real Estate Transaction Recovery Fund
    D. Manufactured Housing Transaction Recovery Fund
Consumer-Related Business Promotions.
    A. Pyramid Sales
    B. Referral Rebate Sales
    C. Home Businesses
    D. Business Opportunity Sales Act
    E. Unsolicited Merchandise
Contractual Merger and Disclaimer
    A. Merger Clauses
    B. Collateral Agreements
Misrepresentations and Other Offenses 
Collections
    A. Fair Debt Collection Practices Act.
        1. In General
        2. Venue
        3. Disclosures 
        4. Applicability to Attorneys
        5. False or Misleading Representations
        6. Unfair Practices
        7. Civil Liability
    B. Consumer Defenses to Enforcement of Security Interests.
        1. Security Interests.
            a. In General
            b. Requirements
            c. Accessions and After-Acquired Property
            d. Termination of a Security Interest
        2. Consumer Default.
            a. In General
            b. Missed or Late Payments
            c. Debtor's Limited Right to Cure Default
        3. Repossession.
            a. Proceeding in Detinue
            b. Self-Help Repossession
            c. Consent to Repossession
            d. Criminal Concealment
        4. The Creditor's Disposition of Property.
            a. Creditor Retention
            b. Debtor's Redemption
            c. Sale of Collateral.
                (1) In General
                (2) Notice
                (3) Discharge of Maker, Co-Maker, or Endorser
                (4) Public Versus Private Sale
                (5) Sale Price
            d. Calculating a Debtor's Deficiency.
                (1) In General
                (2) Credits to the Debtor
                    (a) Pro Rata Method
                    (b) ActuTimes New Roman Method
                    (c) Rule of 78s Method
                (3) Charges by the Creditor
            e. Deficiency Claims

Residential Leases
    A. The Virginia Residential Landlord and Tenant Act

        1. In General
        2. Breach of Covenant to Repair
        3. Tenant’s Remedy
    B. Common-Law Cause of Action for Making Negligent Repairs
Residential Real Estate Contracts.
    A. Virginia Residential Property Disclosure Act.
        1. In General
        2. Disclosures
        3. Right to Terminate the Contract
        4. Exemptions
        5. Real Estate Broker's Responsibility

    B. Action Against Realtor for Breach of Listing Contract
    C. Action Against Certified Home Inspector or Non-Certified Home Inspector
    D. Property Owners' Association Act.
        1. In General
        2. Association Disclosure Packet

    E. New Home Mechanics' Lien Disclosure
    F. New Home Implied Warranties
    G. Settlement Agent Disclosure
Real Estate Settlement Procedures Act.
    A. In General
    B. Disclosures 
    C. Damages
Mortgage Lending Contracts.
    A. Mortgage Lenders and Brokers
        1. In General
        2. Prohibited Practices
    B. Additional Mortgage Lending Requirements.
        1. Appraisal Fee
        2. Assignment of Mortgage
        3. Assumption of Mortgage
        4. Discrimination Prohibited
            a. Virginia Fair Housing Law
            b. Virginia Equal Credit Opportunity Act
        5. Due on Sale Clause
        6. Escrow Accounts
        7. Loan Fees and Charges
        8. Fire Insurance
        9. Private Mortgage Insurance
        10. Late Charges
        11. Prepayment
        12. Loan Payoff
Real Estate Foreclosure
    A. In General
    B. Consumer Defenses
        1. Equitable Arguments
        2. Bankruptcy.
            a. In General
            b. Equity of Redemption
        3. Truth-in-Lending Act Rescission
        4. Lis Pendens
        5. Servicemembers Civil Relief Act
        6. Federal Equal Credit Opportunity Act
        7. Selected Federal Requirements Regarding Home Mortgages.
            a. Housing and Urban Development Act
            b. Fair Housing Act
            c. Federal Housing Authority-HUD Insured Mortgages
            d. Veterans' Administration Insured Mortgages
            e. Farmers Home Administration


 

Introduction. Consumer contracts establish the terms for consumer consumption. These contracts involve personal, family, or household transactions.  Examples include contracts for food, clothing, housing, transportation, vacations, communications, and other consumption. Consumer contracts and consumer contract law address the rights and remedies of the parties regarding, for example, contract inducements, sales practices, warranties, credit, and remedies for breach.

Consumer contracts often involve terms that may be affected by federal and state consumer protection laws establishing additional contractual terms, procedures, substance, and remedies.  Accordingly, consumer contracts are affected by both the common law and the consumer protection statutes. Under the common law, consumer contracts are affected by misrepresentations in the context of fraud and constructive fraud. Under the consumer protection statutes, consumer contracts are affected by nondisclosures and by deceptive, unfair, monopolistic, and unconscionable business practices. Examples of these statutory requirements include state and federal standards for truth in lending, warranties, and fair debt collection practices.

Additionally, consumer statutes often authorize both legal and equitable remedies. Examples include agency and administrative relief, criminal prosecution, arbitration, injunctive and declaratory relief, and specific statutory civil recourse.

Consumer contracts should be analyzed not only for common-law requirements, but also for the limits, supplements, and exceptions interposed by the various consumer statutes.

Common Law.

A. In General. The common law of actual fraud and constructive fraud applies to consumer contracts. The principal difference between actual fraud and constructive fraud is that constructive fraud does not require knowledge of falsehood and the attendant intent to deceive.

B. Actual Fraud. Virginia common-law actual fraud arises when the speaker makes a false statement with the knowledge that it is false and with the intent to deceive. The elements of common-law actual fraud in Virginia are (i) a false representation; (ii) of a material fact; (iii) made intentionally and knowingly; (iv) with the intent to mislead; (v) reliance by the party misled; and (vi) resulting damage to the party misled.[1] Although “sales puffing” is not generally considered to be fraud when the parties deal on equal terms, as the difference in bargaining power between the parties increases, the likelihood that a seller’s representation would be viewed as mere “sales puffing” decreases.[2]

C. Constructive Fraud. Virginia common-law constructive fraud arises even when the speaker does not have knowledge of the falsehood. This absence of knowledge also removes an intent to deceive. Instead, the speaker may only mistakenly make a false statement. The speaker’s intent need only be that the statement be acted upon. Attorneys should advise parties that the truth and the fact that the speaker knows the representation to be the truth are sound policies for sellers making sales representations. On the other hand, attorneys should advise parties that the seller’s honest mistake is not a defense. The elements of common-law constructive fraud in Virginia are (i) that there was a material false representation; (ii) that it was meant to be acted upon; (iii) that the hearer believed it to be true; (iv) that it was acted upon; and (v) that damage was sustained.[3] As with actual fraud, the seller’s representations are more likely to be viewed as mere “sales puffing” as the consumer’s bargaining disadvantage decreases.[4]

D. Litigation.

1. Material Misrepresentation.

a. In General. If the misrepresentation is not material to the contract, it will not support an action for fraud.[5]  The misrepresentation must relate to a preexisting or present fact. Accordingly, the misrepresentation is not material if it is a promise,[6] a future prediction,[7] a broken promise,[8] or an opinion.[9]  However, claims of misrepresentation are interpreted in the context of the relative bargaining power of the consumer and the seller. If the consumer is in a relatively weak contractual bargaining position, what might otherwise not be a fact sufficient to prove fraud may be interpreted as such a fact. For example, an opinion may be viewed as an affirmation of fact by the seller sufficient to qualify as a material misrepresentation.[10] Similarly, a seller’s statement concerning his or her experience may be perceived by a consumer as an expert’s statement of fact, sufficient to qualify as a material misrepresentation.[11]  Moreover, a seller’s affirmation of the quality of an item for sale - or similar commendation - could be construed to be sufficient to qualify as a seller’s warranty and support a finding of fraud.[12]

b. Present Intent Not to Perform. While fraud usually cannot be predicated on a mere opinion or a promise to do something in the future,[13] if the promisor expressly or impliedly avers that he or she has an existing intention to fulfill a promise, that intention is a fact and, if false or fraudulent, is a fraudulent representation that may support an action for deceit.[14]

c. Misrepresentation Must Lie Outside the Contract. A claim for actual or constructive fraudulent inducement will not lie where there is merely a breach of contract and not a misrepresentation that lies outside the contract.[15] Where the claims for fraudulent inducement are actually material breaches of the contract, there is only an action for breach of contract and not for the tort of fraudulent inducement. For a fraudulent inducement claim, there must be a breach of a common law duty, not a duty that exists merely because of a contract between the two parties.[16]  While failure to perform an antecedent promise may constitute a breach of contract, the breach does not amount to fraud.[17]

d. Fraud Must Be Based on a Common-Law or Statutory Duty. To avoid turning every breach of contract into a fraud claim, the Virginia Supreme Court has indicated that the “law of torts provides redress only for the violation of certain common-law and statutory duties involving the safety of persons and property, which are imposed to protect the broad interests of society.”[18]

The Virginia Supreme Court has also stated:

If the cause of complaint be for an act of omission or non-feasance which, without proof of a contract to do what was left undone, would not give rise to any cause of action (because no duty apart from contract to do what is complained of exits) then the action is founded upon contract, and not upon tort.[19]

In Flip Mortgage Corp. v. McElhone,[20] the United States Court of Appeals for the Fourth Circuit recognized a tort of fraud in the inducement arising from a contractual relationship where the submission of false revenue reports was circumstantial evidence of an intent never to abide by the terms of the contract. The Fourth Circuit cited Colonial Ford Truck Sales, Inc. v. Schneider[21] as supporting its view. The Virginia Supreme Court later noted in Richmond Metropolitan Authority v. McDevitt Street Bovis, Inc. that “[i]n Colonial Ford, we held that ‘the promisor’s intention . . . when he makes the promise, intending not to perform . . . is a misrepresentation of present fact . . . [that] is actionable as an actual fraud.’”[22] But nothing in the record in McDevitt suggested that it did not intend to fulfill its contractual duties at the time it entered into the contract.

e. Proximate Cause Between Misrepresentation and Damages. Where a consumer claims damages for fraud, he or she must show the damages were proximately caused by the fraud.[23]

2. Reliance. Generally, a sales statement likely to induce a purchaser to act will support an inference of reliance.[24] However, an attorney reviewing a consumer’s reliance should resolve whether an exception to the rule may apply. For example, if the consumer conducted an examination of the goods before the sale that should have revealed inadequacies in the goods, then the consumer’s reliance would not be justified.[25]  Moreover, a buyer’s knowledge of an inadequacy in a sales item can raise a buyer’s duty to inquire, and without inquiry, a buyer cannot rely upon a seller’s representations.[26]  In comparison, when a consumer is on notice to inquire and does inquire, his or her reliance on sales representations that divert the consumer from the inquiry has generally been found to support the consumer’s reliance.[27]  Additionally, when a consumer is in an inferior bargaining position and is induced not to read contractual documents, the consumer’s reliance upon the misrepresentation of the other party or that party’s agent regarding the document contents can support a cause of action for fraud.[28]

A disclaimer of reliance clause might protect a party from an allegation of fraudulent inducement. In Goodyear Tire & Rubber Co. v. Chiles Power Supply,[29] a federal district court in Ohio rejected the defendant’s counterclaim for fraud in the inducement, finding that the agreement contained not only a limited disclaimer of liability but also a full disclaimer of reliance that precluded the defendant from having reasonably relied on the purported oral misrepresentations. The court noted that Goodyear disclaimed reliance when it declared that “no representative has authority to make any representation, promise or agreement, except as stated herein.”[30] This disclaimer gave the defendant “fair warning as to the reliability of any representation external to the terms.”[31] Whether such a clause would work in a consumer contract in Virginia remains to be seen.[32]

3. Standard of Proof. The standard of proof for fraud in Virginia is “clear, cogent, and convincing evidence.”[33] However, in federal bankruptcy court, fraud may be proved by a preponderance of the evidence when a creditor seeks to prove that his or her claim is eligible for exception to discharge under 11 U.S.C. 523.[34]

4. Statute of Limitations. The statute of limitations for fraud is two years from when the cause of action accrues.[35] Where the fraud occurs more than two years before the suit is filed, the consumer should allege facts in his complaint showing why the statute of limitations has not run. For example, the consumer could allege facts showing that despite the exercise of due diligence, he or she could not have discovered the facts forming the basis of the claim for fraud or facts establishing a basis for the statute of limitations to be tolled, such as concealing the cause of action,[36] obstructing the filing of the lawsuit,[37] equitably stopping the statute of limitations,[38] or equitable tolling.[39] A consumer who fails to plead due diligence or one of these other doctrines must have evidence to show his or her due diligence or other basis for tolling.[40] Some statutory claims may have different limitations. For example, the Virginia Residential Property Disclosure Act has a one-year limitations period running from when the purchaser received the required disclosure statement or from when the property was sold (or occupied).[41]  The Virginia Consumer Protection Act has a two-year statute of limitations,[42] and the Truth in Lending Act has a one-year statute of limitations that runs from the date the violation occurred.[43]

5. Remedies.

a. Rescission. When a contract is procured by fraud, the consumer upon discovery may promptly rescind the contract.[44] This is because a contract induced by actual or constructive fraud is not void but voidable at the option of the party injured by the fraud. In the alternative, the party deceived may affirm the contract and seek compensation for damages caused by the fraud and deceit.[45]

Several cases suggest that if the deceived party remains silent, he or she will be held to have waived the objection and will be conclusively bound by the contract as if the fraud had not occurred.[46] However, these cases apparently only stand for the proposition that one waives the right to rescind; a number of cases affirm the right of the deceived party to recover damages.

b. Damages. Instead of rescinding the contract, the deceived party may affirm the contract and seek damages. In Horner v. Ahern,[47] the contract for the purchase of land and a house required the sellers to supply a termite certificate and provided that the buyers would be released if termite damage was shown. In their suit, the buyers alleged that after the sellers’ agent was informed by one termite inspector of damage, a certificate was procured from another company showing infestation only and that, relying on this certificate, the buyers took title and had added expense as a result. 

Rejecting the sellers’ claim that the buyers could only rescind because the contract provided for rescission, the court held that “one complaining of fraud and deceit may either rescind what was done as a result thereof, or affirm the action taken and sue for damages.”[48]

Similarly, in Nationwide Insurance Co. v. Patterson,[49] an insurance agent had mistakenly misrepresented the meaning of certain language in an insurance policy. Based on the agent’s misrepresentations, the customer purchased the policy. Contrary to what the customer was told, the insurance contract had a “stop loss” payment provision which prevented the customer’s hospital bills that exceeded the “stop loss” from being paid. The court found that the customer was entitled to damages based on constructive fraud.

In Prospect Development Co. v. Bershader,[50] the court held that when a person is fraudulently induced to acquire property, he or she may recover as damages the difference between the actual value of the property at the time the contract was made and the value that the property would have possessed had the representation been true.

c. Punitive Damages. If the plaintiff can prove that the fraud was committed with actual malice or under circumstances amounting to a willful and wanton disregard of the plaintiff’s rights, that party may also seek punitive damages.[51]  Actual malice may be shown if the defendant’s actions were prompted by ill will, malevolence, grudge, spite, wicked intention, or a conscious disregard of the rights of another.[52]

d. Specific Performance. Although section 8.2-716 of the Virginia Code provides for specific performance of a contract involving consumer goods, as a practical matter, Virginia law disfavors this remedy where there are adequate remedies at law. The only exception is where, for example, the goods are unique or otherwise not fungible, so that money damages will not make the nonbreaching party whole.[53]

e. Attorney Fees. Additionally, attorney fees may be recoverable in a claim for fraud.[54]

f. Arbitration. By entering into contracts calling for binding arbitration, consumers can waive their right to a jury trial. Consumers’ claims of fraud in the inducement that apply to the terms of the contracts in general rather than specifically to the arbitration clause in their respective contracts are for arbitrators to decide.[55]

6. Equitable Defenses. At common law, the seller who defends a claim of fraud may assert several equitable defenses including, for example, the defense of laches. This defense includes delay to the prejudice of the party raising the defense.[56]

Additionally, if a claimant has affirmed a contract or waived a term of the contract, that affirmation or waiver may be argued to preclude the claimant’s remedy.[57]  Similarly, an attorney should examine whether a return of property would effect a contractual rescission.[58]

Waiver can also be raised as an affirmative defense. Proof of waiver is usually a question for the trier of fact, and it must be “clear.”[59] A waiver must be distinctly made with full knowledge of the rights waived, and the defrauded party must “[know] his rights, and [intend] to waive them.”[60] The mere delay of the deceived party in rescinding a contract after learning of the fraud will not amount to a waiver of the wrongful act if the delay results from a reasonable expectation that the wrongdoer will fulfill the repeated assurances of its agent to grant the relief to which the plaintiff is entitled.[61]

7. Economic Loss Rule. Economic losses are “disappointed economic expectations.”[62]  These losses consist of damages for inadequate value, costs of repair or replacement of the defective product, and any consequent loss of profits as well as diminution in value due to inferior quality or failure to work as expected.[63]  While the economic loss rule does not apply in actual fraud cases, it does bar recovery under a constructive fraud theory; otherwise, every breach of contract case would turn into a tort.[64]  However, “a claim of a nonworking product can be brought as a breach-of-warranty action. Or, if the customer prefers, it can reject the product or revoke its acceptance and sue for breach of contract.”[65] The damages for a breach of warranty relate to the failure of a product to meet the consumer’s expectations and, as the court notes, “[t]he maintenance of product value and quality is precisely the purpose of express and implied warranties.”[66]

A disclaimer of warranty clause does not bar a claim for fraudulent inducement. In Packard Norfolk, Inc. v. Miller,[67] the court held that an express agreement stating that there “are no warranties express or implied made by the dealer or manufacturer [except the manufacturer’s 90-day or 4,000-mile warranty]” and that “the manufacturer warrants each new motor vehicle . . . chassis or parts manufactured by it to be free from defects in material or workmanship,” with the further provision that “this warranty being expressly in lieu of all other warranties, express or implied, and all other obligations or liabilities on its part,” did not insulate the dealer from the legal consequences of fraud practiced by its agent to obtain the challenged contract. The agent had mistakenly represented to the consumer “that the car would be in perfect condition . . . thoroughly checked . . . gone over carefully . . . [and] in as good running condition as it could be when delivered to me. . . .”[68] These representations were found to be material representations of an existing fact that were false and that induced the consumer to purchase the car to his damage and permitted the contract to be rescinded based on constructive fraud.

Statutes Affecting Consumer Contracts.

A. In General. Modern statutes that prohibit deceptive and unfair trade practices often eliminate the common-law requirement of intent by the seller and provide specific remedies. For example, the Virginia Consumer Protection Act (VCPA)[69] generally prohibits misrepresentations and deceptive practices by “suppliers” in consumer transactions. It also enforces at least thirty other states’ consumer statutes.[70]

The VCPA authorizes administrative, injunctive, and public and private civil remedies. In addition, actions under section 18.2-214 et seq. of the Virginia Code include civil, injunctive, and criminal actions for misrepresentation and other offenses connected with sales.[71]

B. Federal Trade Commission Act.[72] The Federal Trade Commission Act (FTCA) states that “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.”[73] Examples of unfair competition include unauthorized use of another’s trade name and business activities in restraint of trade. Examples of deceptive acts or practices include false advertising and other misrepresentations related to consumer sales. The FTCA also authorizes the Federal Trade Commission (FTC) to issue rules, investigate and obtain information, issue administrative orders, and obtain compliance by administrative, injunctive, civil, and criminal enforcement. Consumers may request the FTC to investigate, or they may pursue their own private actions under the FTCA. The FTC has issued several regulations, including, for example, the regulation prohibiting the “holder in due course” doctrine in consumer transactions.[74]  The Virginia codification of the “holder in due course” doctrine allows a creditor to sell a debt to a third party that does not have notice of any claims or defenses regarding the debt, and the third party takes the debt without being subject to the defenses that a consumer might otherwise have to its collection.[75]  This statutory provision should be considered with section 8.3A-106(d) of the Virginia Code, which enforces the FTC rule.[76] Thus, the Virginia “holder in due course” doctrine is limited with respect to consumers and is now consistent with the FTC rule. Accordingly, it is a deceptive trade practice to use an installment contract that does not state in conspicuous type that third parties are subject to all the claims and defenses that a consumer could raise against the seller.[77] Deceptive trade practices should also be reviewed under the VCPA.

C. Virginia Consumer Protection Act.[78]

1. In General. The intent of the Virginia legislature in enacting the Virginia Consumer Protection Act (VCPA) is “that this chapter shall be applied as remedial legislation to promote fair and ethical standards of dealings between suppliers and the consuming public.”[79] In addition to the prohibitions set forth in the VCPA itself, the VCPA also enforces a number of other Virginia consumer laws as enumerated in the VCPA.[80]

2. Personal, Family, or Household Transactions. The VCPA applies to contracts involving advertisements, offers, sales, or leases of land, goods, intangibles, and services used primarily for personal, family, or household purposes. These are called “consumer transactions.”[81]

3. Suppliers. The VCPA is designed to promote fair and ethical standards of dealings between suppliers and the consuming public.[82] The VCPA applies to products in consumer transactions and to products destined for consumer transactions.[83]  The term “supplier” includes, for example, manufacturers or distributors who advertise and sell or lease goods or services to be resold or leased by other persons in consumer transactions.[84] The remedies under the VCPA also apply to persons who personally approve actions by others that violate the VCPA. Thus, corporate officers and joint venturers who approve contracting actions by others may be liable as suppliers.[85]

4. Exclusions. The relationship between enforcement under the VCPA and enforcement under other consumer laws is not always clear. For example, the VCPA does not apply to certain regulated industries, such as savings and loan associations, small loan companies, and insurance companies (regulated by the State Corporation Commission).[86] These industries are excluded because the agencies overseeing them are perceived to actively regulate them and to prevent deceptive consumer practices in their transactions. Actions under the regulatory authority of the Landlord and Tenant Act[87] and the Virginia Residential Landlord and Tenant Act[88] are also generally excluded from enforcement under the VCPA. Arguably, however, these exclusions may not apply to, for example, landlord misrepresentations or fraud.[89]

Although the practices of doctors, contractors, or other professionals are regulated by other statutory authorities, they arguably are not entirely excluded from enforcement under the VCPA. For example, if another regulatory authority fails to forbid a certain practice, that particular practice may not be excluded from enforcement under the VCPA. Therefore, if misrepresentations (for example, those concerning certain charges for services) are not “permitted by law” by another regulatory agency and the contract is silent regarding the charges, the VCPA may apply to the misrepresented charges.[90] In comparison, federal law can preempt enforcement under the VCPA. For example, litigation interpreting the federal Consumer Credit Protection Act[91] has drawn distinctions between those parts of a transaction that are regulated by that Act and those that are not.[92]

5. Prohibitions. Attorneys reviewing consumer contracts should consider the prohibitions under the VCPA regarding misrepresentations, deceptions, and unfair practices.[93] Examples of misrepresentations include false or misleading statements of characteristics, uses, benefits, origins, approvals, certifications, and quality.[94] Examples of deceptive advertising include “bait and switch,” advertising a consumer product for sale without the intention of selling it, and failing to describe clearly and unequivocally goods that are irregular, imperfect, repossessed, or blemished.[95] Misleading prices are also prohibited—for example, misleading price comparisons or amounts of price reductions.[96] The unfair practice of including unlawful terms in contracts or attempting to collect on unlawful contract terms when they are void or unenforceable is also prohibited. Examples include liquidated damages, penalties, and waivers of defenses.[97] Other prohibited misrepresentations and deceptions include misrepresentations regarding the terms of layaway purchase programs, the terms of open-end credit, and other terms of consumer contracts.[98]  Mere statements of opinion are not actionable under the VCPA.[99]

6. Enforcement.

a. In General. Any deception used in connection with a consumer transaction is a violation of the VCPA.[100]

b. Intent. Proof of intent is not necessary.[101] However, the VCPA provides that a supplier is not liable if a violation occurred when the supplier had no control or the violation was a result of a bona fide error if procedures had been adopted to prevent such an error. This is the unintentional error defense. Importantly, even if the supplier is successful in the defense, restitution and attorney fees may still be awarded to the consumer.[102]

c. Enforcement of Other Statutory Provisions. The VCPA, by its terms, also enforces the following statutory provisions:[103]

(1) Virginia Health Spa Act;[104]

(2) Virginia Home Solicitation Sales Act;[105]

(3) Automobile Repair Facilities Act;[106]

(4) Virginia Lease-Purchase Agreement Act;[107]

(5) Prizes and Gifts Act;[108]

(6) Virginia Public Telephone Information Act;[109]

(7) Motor Vehicle Manufacturers’ Warranty Adjustment Act;[110]

(8) Pay-Per-Call Services Act;[111]

(9) Extended Service Contract Act;[112]

(10) Virginia Membership Camping Act;[113]

(11) Comparison Price Advertising Act;[114]

(12) Virginia Travel Club Act;[115]

(13) Rights of purchaser to return hearing aid;[116]

(14) Merchandise pricing;[117]

(15) Towing of trespassing vehicles;[118]

(16) Pawnbroker requirements;[119]

(17) Animal sales requirements.[120]

(18) Illegal Sale or Distribution of Cigarettes Act;[121]

(19) Using the consumer’s Social Security number as the consumer’s account number with the supplier, if the consumer has requested in writing that the supplier use an alternative number not associated with the consumer’s Social Security number;[122]

(20) Payday Loan Act;[123]

(21) Unsolicited transmission of advertising materials by facsimile machine;[124]

(22) Bedding and upholstered furniture;[125]

(23) Legal services contracts;[126]

(24) Nonprofit Credit Counseling Act;[127]

(25) Virginia Post-Disaster Anti-Price Gouging Act;[128]

(26) Gift certificate disclosures;[129]

(27) Restricted use of Social Security numbers;[130]

(28) Influenza vaccine price-gouging;[131]

(29) Loans secured by anticipated tax refunds;[132]

(30) Persons undertaking work without any valid Virginia contractor’s license or certificate when a license or certificate is required;[133]

(31) Contriving, preparing, setting up, operating, advertising, or promoting any pyramid promotional scheme;[134]

(32) Uniform Trade Secrets Act;[135]

(33) Selling, offering for sale, or manufacturing for sale a children’s product the supplier knows or has reason to know was recalled by the federal Consumer Product Safety Commission;[136]

(34) Requirements for use of automatic dialing-announcing devices;[137]

(35) Regulations governing motor vehicle title loans; and[138]

(36) Regulations governing the use of warranty registration cards.[139]

7. Civil Remedies.

a. Civil Enforcement. Under the VCPA, the Attorney General, attorneys for the commonwealth, and attorneys for any county, city, or town in Virginia may seek investigative orders, injunctions, civil penalties, costs, and restitution.[140]  Governmental authorities seeking injunctive relief must give the defendant advance written notice of intent to sue and an offer of opportunity either (i) to explain that the alleged violation did not occur or (ii) to execute an assurance of voluntary compliance.[141] The VCPA provides broad powers to the foregoing governmental authorities. For example, the VCPA also authorizes ex parte investigative orders to inquire into the contractual activities of the respondent if voluntary requests are unproductive.[142]  Prerequisite to such orders is reasonable cause to believe that a violation of the VCPA has occurred or is about to occur.[143] Reasonable cause is viewed as a lower standard than probable cause.[144] Moreover, if an alleged violator receives a notice from one of the foregoing governmental authorities by certified mail that an act or practice is in violation of the VCPA, and the act or practice continues, it is prima

facie evidence of a willful violation.[145] For a willful violation of the VCPA, the Commonwealth is authorized to recover civil penalties, costs, attorney fees, and expenses.[146]

In Paramount Builders, Inc. v. Commonwealth,[147] the court construed the standard for issuing a civil investigative order. The court found the commonwealth’s attorney’s application statement, which expressed concern that documents would be destroyed, was sufficient because it clearly identified why efforts to obtain the information from Paramount without a court order would be impractical. The court found that this statement supported the issuance of the investigative order.

b. Private Causes of Action. Any person who suffers a loss under a consumer contract may seek to recover the greater of $500 or actual damages, plus attorney fees and court costs. Moreover, if the violation is found to be willful, a trier of fact may increase the damages to an amount not exceeding three times the actual damages or $1,000, whichever is greater.[148] A contractual limit on liability for negligence will be strictly construed, limiting the likelihood that such a contractual  limit will be enforced.[149]

A supplier can avoid liability in two ways.[150]  First, the supplier can show by a preponderance of the evidence that the act or practice complained about was an act or practice of a manufacturer or distributor over which the supplier had no control. Second, the supplier can show that the violation resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid a violation.[151] However, nothing in the VCPA prohibits the court from ordering restitution and payment of reasonable attorney fees and court costs.

The statute of limitations under the VCPA is two years from the date the right to bring an action accrued.[152]  However, a person initiating an action under the VCPA may toll the time during which a governmental suit (and appeal) is pending.[153]

In Polk v. Crown Auto, Inc.,[154] and Alston v. Crown Auto, Inc.,[155] an allegedly excessive 10 percent fee for late payments was found not to violate section 59.1-200(A)(13) of the Virginia Code, which makes unlawful using a penalty clause in any contract or attempting to collect penalties that are void or unenforceable under the law (relying on section 6.1-330.80(C), since recodified as section 6.2-400(D), which states that “[a]ny provision for late charges in excess of the amount permitted by this section shall be void as to the amount in such excess but shall not otherwise affect the validity of the obligation”). The courts found that a loan that is not usurious when made cannot be made usurious by subsequent events. Because Alston was reimbursed by Crown for the excess late fee and because Polk never made a late payment, neither had suffered a loss, and they were, therefore, not entitled to initiate a cause of action under section 59.1-204.

c. Sovereign Immunity. Sovereign immunity remains a bar to claims against a governmental entity. In an action brought against a city under the Virginia Multiple Claimants Litigation Act, the lead plaintiff asserted a violation of the Virginia Consumer Protection Act and fraud claims, alleging that she suffered a miscarriage caused by toxic water during a period when the city was upgrading its water treatment plant to conform to newly imposed federal safe drinking water standards. The Virginia Supreme Court upheld the city’s plea of sovereign immunity.[156]

d. Cure Offers. A “cure offer” is a written offer of one or more things of value, including the payment of money, from a supplier to a person claiming to have suffered a loss as a result of a consumer transaction. A cure offer must be sufficient to remedy the loss and include a minimum additional amount equal to 10 percent of the value of the cure offer or $500, whichever is greater, as compensation for inconvenience, attorney fees, expenses, or other fees or costs that the person may incur because of the loss. The minimum additional amount need not exceed $4,000.[157]

When a cure offer is timely delivered, the supplier may introduce the offer into evidence at trial. The supplier is not liable for the consumer’s attorney fees and court costs that are incurred after the cure offer is delivered unless the actual damages awarded, less attorney fees and court costs, exceed the value of the cure offer.[158]

A cure offer is timely when it is delivered to the consumer, or the consumer’s attorney, before the supplier files an initial responsive pleading in a proceeding brought against the supplier by the consumer. A cure offer is not admissible in a proceeding unless it has been timely delivered.[159]

If a cure offer is accepted, the person accepting it may not initiate or maintain any other or additional action based on any cause of action arising under any other statute or common law theory that is based on substantially the same allegations of fact as the violation under the VCPA.[160]

e. Attorney Fees, Court Costs, and Settlement. If the parties to an action wish to settle all matters in dispute, the question of whether to award reasonable attorney fees and court costs to the plaintiff, and the amount thereof, may be tendered to the court for its consideration.[161]

8. No Duty to Elect Between Remedies When also Suing for Fraud. In Wilkins v. Peninsula Motor Cars, Inc.,[162] Wilkins purchased a 1998 BMW 540I from Peninsula. An employee of Peninsula represented to Wilkins that the car was new even though the car’s odometer read 972 miles. In fact, the car had been previously titled and was considered a used car, which Wilkins discovered when he received the title to the car in the mail. Wilkins brought an action against Peninsula for, inter alia, fraud and violating the VCPA. A jury awarded Wilkins enhanced damages of $12,000 (a trebling of his $4,000 in actual damages) under the VCPA and $1,862.86 in actual damages and $100,000 in punitive damages under his common law fraud claim. The court awarded Wilkins attorney fees and costs of $34,183 under the VCPA. The trial court required Wilkins to elect between the remedies, but the Virginia Supreme Court held the case did not present irreconcilable causes of action that would require Wilkins to elect between them. Because Wilkins conceded that he was only entitled to one award of compensatory damages, one award of exemplary damages, and one award of attorney fees, the court remanded with directions to enter judgment for Wilkins in the amount of $138,183 plus an award of reasonable attorney fees and costs for successfully prosecuting the appeal.

D. Additional Virginia Statutes Affecting Consumer Contracts.

1. Virginia Home Solicitation Sales Act.[163]

a. In General. Home solicitation sales involve contracts for sale or lease in which the seller uses personal solicitation (or telephonic or other electronic means) at any residence other than the residence of the seller.[164] The Virginia Home Solicitation Sales Act (VHSSA) excludes farm equipment sales or leases, cash sales less than $25, sales or leases pursuant to an existing revolving charge account, and sales or leases made pursuant to prior negotiations between the parties.[165]

b. Notice Requirements. The seller must provide to the consumer a copy of the full receipt or offer to purchase containing all the terms of the contract. The receipt or written contract must contain the items set forth in the VHSSA, including a statement of the consumer’s rights and a “Notice of Cancellation” as set forth in the VHSSA.[166] Additionally, the seller is prohibited from misrepresenting the nature or purpose of the transaction. The seller is required, immediately at the time of the solicitation, to identify himself or herself as a seller or a lessor, or the consumer has 30 days to cancel the sale and tender the goods or merchandise back in good condition.[167]

c. Three-Day Cooling Off Period. The consumer is authorized to cancel a home solicitation sale until midnight of the third business day after the day on which the consumer signs an agreement or offer to purchase.[168]

However, if a consumer gives the seller a request, signed by the consumer and dated, that the seller provide the goods or merchandise without delay because of an emergency - and the seller makes substantial good faith performance - the consumer’s three-day right to cancel the contract will not apply.[169]  All other waivers of the consumer’s right to cancel the contract are void.[170]  The seller is not entitled to compensation if there has been a proper cancellation.

d. Tenders Required. After proper cancellation, the seller must tender any payments back to the consumer within 10 days after the cancellation.[171]  Until the seller complies with this requirement, the consumer may retain the goods, but the seller has a lien on the goods.[172] The consumer is not required to tender the goods or merchandise at any place other than the consumer’s residence.[173]

e. Additional Remedies. In addition to the relief authorized under the VHSSA, several other bases for consumer relief are authorized. For example, a violation of the VHSSA may be enforced as a VCPA violation.[174] The attorney should also review the transaction for common-law actual fraud.[175]  Truth-in-lending and other statutory contractual disclosure requirements and rescission rights should be reviewed as well.[176] In addition to the seller’s loss of right to compensation if a proper cancellation under the VHSSA has been made, a seller’s request for quantum meruit may also be rejected.[177]

2. Prizes and Gifts Act.[178]

a. In General. The Prizes and Gifts Act (PGA) requires that anyone stating that a person has “won” something in connection with a sale or lease of goods, property, or services must actually deliver the prize within 10 days without obligation or expense to the recipient.[179] The PGA also prohibits false representations that a person has been specially selected[180] and simulation of checks and invoices unless they are clearly identified as something other than checks and invoices.[181]

b. Exclusions. The PGA excludes solicitations for books, recordings, video cassettes, periodicals, and similar goods regulated by the Federal Trade Commission Rules and contractual plans to which the consumer has consented in advance.[182]

c. Disclosures Required. The sponsor must be clearly and conspicuously identified, and all material conditions that the participant must satisfy must be disclosed. Additional required disclosures include the retail value of the prize, the actual number of prizes to be awarded, and the odds of receiving each prize. The prize solicitation materials must contain a separate disclosure statement (set forth in the PGA), and the statement must be in at least 10-point bold-faced type.[183]  A seller who makes misleading statements instead of the disclosures required under the PGA violates the PGA.[184]

d. Remedies. The PGA authorizes a consumer’s private cause of action, reasonable attorney fees, and court costs.[185] Moreover, the PGA may be enforced under the provisions of the Virginia Consumer Protection Act.[186]

3. Virginia Membership Camping Act.[187]

a. In General. The Virginia Membership Camping Act (VMCA) applies to campgrounds and recreational facilities that use contracts for periods of more than one year’s duration to grant certain nonexclusive rights to the purchaser. Specifically, the VMCA applies when the seller grants a nonexclusive right or license to use a campground or any portion thereof on a first come, first serve or reservation basis. The requirements of the VMCA include registration and bonding by the sellers as well as a disclosure statement in the contract setting forth the purchaser’s statutory rights of cancellation, contractual services and financial obligations, escrow of purchase money, and statutory bases for voiding the contract. Moreover, the VMCA requires several contractual terms, including a disclosure statement, in at least 10-point bold-faced type, containing the right to cancel without penalty by midnight of the seventh day following the date of contract.[188]  Additionally, any noncomplying contract is voidable at any time at the option of the purchaser.[189]

b. Maximum Fifteen Contracts per Camping Site. The VMCA prohibits the sale of any membership camping contract that causes the total number of contracts to exceed a ratio of fifteen such contracts for each camping site.[190]

c. Enforcement. The VMCA includes provisions for misdemeanor prosecutions under several specific sections including those requiring disclosures and those prohibiting misrepresentations.[191] Additionally, any violation of the VMCA is also a prohibited practice under the Virginia Consumer Protection Act and is subject to its enforcement provisions.[192]

4. Virginia Travel Club Act.[193]

a. In General. The Virginia Travel Club Act (VTCA) applies to for-profit entities that charge an advance fee or annual charge of more than $100 for the privilege of arranging or obtaining future travel services.[194]  The VTCA sets forth several requirements, including registration and bonding by the sellers, a disclosure statement in the contract identifying the purchaser’s statutory rights of cancellation, services and financial obligations, escrow of purchase money, and prohibitions against misleading statements.

b. Exemptions. The VTCA exempts credit card issuers[195] whose cards are honored by 100 or more merchants other than the issuer. Additionally, the VTCA does not apply to selected investment contracts regarding time-shares[196] under section 55-360 et seq. of the Virginia Code or membership camping contracts under section 59.1-311 et seq.[197]

c. Disclosures.

(1) Travel Services Agreement. The VTCA requires the travel services agreement to contain a written disclosure of all terms and limitations on the membership. These disclosures must be provided to the purchaser at the time the agreement is executed. Also, the VTCA sets forth the specific terms of the purchaser’s right to cancel within seven calendar days from the date the contract is executed. The VTCA requires that this right to cancel be printed immediately above the buyer’s signature, in capital letters under the caption, in no less than 10-point bold-faced type.[198]

(2) Public Offering Statement.[199]  The VTCA also requires that a public offering statement be prepared and given to any prospective buyer before a travel services agreement is executed. The public offering statement must include, for example, the name and address of the club and, if the seller’s net worth is below $500,000, a copy of the audited balance sheet. The statement must also describe the services offered, the duration and types of memberships, and the fees.

d. Prohibitions.[200] It is unlawful for the travel club to offer a promotion where the cost is more than what the cost would be without a club membership. The VTCA also prohibits several material misrepresentations and the use of the terms “time-share,” “vacation ownership,” “interval ownership,” “time-share benefit,” and “incidental benefit.”

e. Enforcement.[201] Any violation of the VTCA is subject to the enforcement provisions of the Virginia Consumer Protection Act.

5. Virginia Lease-Purchase Agreement Act.[202]

a. In General. The Virginia Lease-Purchase Agreement Act (VLPAA) applies to personal property agreements by natural persons primarily for personal, family, or household purposes. The VLPAA applies only to agreements (i) that are for an initial period of four months or less; (ii) that are automatically renewable; (iii) that are not required to continue leasing or use beyond the initial period; and (iv) that permit the consumer to become the owner of the property. The VLPAA also sets forth several disclosure requirements[203] as well as several exceptions, inclusions, prohibitions, and contractual provisions.[204]

b. Disclosures. The VLPAA requires specific disclosures before the lease-purchase agreement is executed. These disclosures must be stated on the face of the contract above the line for the consumer’s signature.[205]  The statutory disclosures are extensive and include, for example, (i) the number, amount, and timing of all payments necessary to own the leased property; (ii) a statement that the consumer will not own the property until all payments are made; (iii) a statement that the consumer is responsible for the fair market value if the product is lost, stolen, damaged, or destroyed; and (iv) a statement of the cash price.[206]

c. Reinstatement.[207]  A consumer in default may reinstate the agreement without losing any rights or options under the agreement by paying all past due rental charges, costs of pickup and redelivery if the property has been repossessed, and any late fee. This right to reinstatement must be effected within five days for contracts with monthly payments and within two days for contracts with payments made at lesser intervals.

d. Inapplicability of Other Laws.[208] The VLPAA provides that lease-purchase agreements that comply with the VLPAA are not governed by laws relating to home solicitation sales,[209] certain installment contracts,[210] and certain security interests.[211]

e. Exempted Transactions. The VLPAA does not apply to lease-purchase agreements primarily for business, commercial, or agricultural purposes, or those made with governmental organizations or other organizations; moreover, the VLPAA does not apply to the lease of safe deposit boxes, the lease of automobiles, or the lease of certain personal property that is incidental to the lease of real property and that provides that the consumer has no option to purchase the leased property.[212]

f. Enforcement.[213] A violation of the VLPAA is subject to the enforcement provisions of the Virginia Consumer Protection Act.

6. Comparison Price Advertising Act.[214]  The Comparison Price Advertising Act (CPAA) prohibits advertising a former price unless there is veracity demonstrated by the following: (i) the date of the former price is also stated in the advertisement; (ii) substantial sales of the item in the normal course of business were made at the advertised former price; or (iii) the former price that is advertised is based on the cost to the supplier plus the ordinary markup.[215] Further, the CPAA prohibits knowing advertisements of comparison prices that are not verified by the seller.[216]  The CPAA is enforced under the Virginia Consumer Protection Act.[217]

E. Motor Vehicle Statutes.

1. Federal Odometer Disclosure Requirements.[218]

a. In General. A person transferring title to a motor vehicle must certify on the title either the cumulative mileage registered on the odometer or that the mileage is unknown. The statute also provides for verifying the mileage in cases of a lienholder possessing the title, a lost title, and the use of secure powers of attorney.[219]

b. Prohibitions. The statute prohibits tampering with the odometer,[220] removing or altering the required notice of adjusted mileage from the left door frame,[221] and violating the disclosure requirements when transferring the motor vehicle.[222]

c. Enforcement.[223] Government authorities and private parties are authorized to enforce these requirements. The Secretary of Transportation may impose a civil penalty of not more than $2,000 for each automobile and not more than $100,000 in the aggregate. The Attorney General of the United States may bring a civil action to enjoin the offense and to collect any penalty awarded by the Secretary of Transportation[224] and may also prosecute a knowing and willful violation as a criminal offense.[225]  The Attorney General of Virginia may seek a civil injunction and, when there is intent to defraud, may seek treble damages (or $1,500, whichever is greater).[226]  A private person may also seek $1,500 or treble damages, whichever is greater,[227] when an intent to defraud exists, and a prevailing private plaintiff will be awarded costs and reasonable attorney fees.[228]  The statute of limitations is two years after the claim accrues.[229]

In Nigh v. Koons Buick Pontiac GMC, Inc.[230], the court found that a consumer can bring a civil action for a car dealer’s attempt to defraud the Virginia Department of Motor Vehicles.

2. Virginia Automobile Repair Facilities Act.[231] The Virginia Automobile Repair Facilities Act (ARFA) sets forth requirements for automobile repair facilities’ contracts with consumers. Written estimates are required upon request and must be provided before work of more than $25 is commenced.[232] Unauthorized charges for repairs that exceed the written estimate by more than 10 percent are prohibited.[233]

Additionally, the ARFA requires that a sign setting forth the consumer’s right to an estimate and other rights under the ARFA be posted in a conspicuous place where automobiles are normally received for repairs.[234] The repair facility is also required to offer to return the replaced parts,[235] as well as to provide a written invoice that clearly states the work performed and the charges for parts and labor.[236]  A violation of the ARFA is a violation of the VCPA and is subject to its enforcement provisions.[237]

3. Virginia Motor Vehicle Warranty Enforcement Act (Lemon Law).[238] The Virginia Motor Vehicle Warranty Enforcement Act (VMVWEA) provides that a good faith motor vehicle warranty complaint made by a consumer within the lemon law rights period should be resolved by the manufacturer or its agent within that period.[239]  The lemon law rights period is 18 months from the date the vehicle is delivered to the consumer.[240]  Proof of any one of three sets of facts will create a rebuttable presumption that a consumer has made a reasonable number of attempts to conform the vehicle to the warranty during the 18 months.[241]  These sets of facts are (i) that the same problem has been the subject of three or more attempts to repair it by the manufacturer; (ii) that a serious safety defect has been the subject of one or more attempts to repair it by the manufacturer and it continues to exist; or (iii) that the motor vehicle is out of service due to repair for a cumulative total of 30 calendar days. The manufacturer may also provide an informal settlement procedure, and it is the consumer’s choice whether or not to use it.[242]  A suit by the consumer against the manufacturer is barred unless it is filed within 18 months of the consumer taking delivery of the vehicle or within one year of the final decision of the manufacturer’s informal dispute settlement procedure.[243] If the consumer properly reports a nonconformity under applicable warranties during the lemon law rights period, and the manufacturer or its agent does not conform the vehicle to the applicable warranties within that period (or applicable extensions), the consumer may seek either a refund or a replacement.[244]

A private right of action is not created by the requirement for a duplicate buyer’s order for each sale or exchange of a motor vehicle contained in the Motor Vehicle Dealers Act.[245]

4. Federal Magnuson-Moss Warranty Provisions. The federal counterpart to the VMVWEA is contained in the Magnuson-Moss warranty provisions in the Federal Trade Commission Improvement Act (Magnuson-Moss).[246]  A consumer may bring suit in federal court under Magnuson-Moss if the amount in controversy exceeds $50,000 or where supplemental jurisdiction is properly exercised under 28 U.S.C. 1367. A consumer may also bring suit in any court of competent jurisdiction in any state or the District of Columbia.[247]

Magnuson-Moss provides that “[n]o claim shall be cognizable in a suit brought [in federal court] . . . if the amount in controversy is less than the sum or value of $50,000.00.”[248] In Donahue v. Bill Page Toyota, Inc.,[249] the court held that where the claim under Magnuson-Moss is less than $50,000, the damages sought in the pending related state claims cannot be added to meet the $50,000 federal jurisdiction threshold. Nor can attorney fees and costs be used to satisfy the jurisdictional amount.[250] In Barnes v. West, Inc.,[251] a disgruntled car purchaser who resided in the District of Columbia sued a Virginia car dealership that sold her an allegedly new car when, in fact, the car was used and had been severely damaged. Her Magnuson-Moss claim survived a motion to dismiss for lack of subject matter jurisdiction in federal court even though she had paid only $18,235.85 for the car, because she had also filed a fraud claim seeking $350,000 in damages and the fraud claim met the requirement for federal diversity jurisdiction. If the fraud claim had not met the federal diversity jurisdiction amount, the court noted in dicta that the plaintiff could not have aggregated her state claims to meet the Magnuson-Moss amount in controversy.

A buyer’s claim under Magnuson-Moss is not subject to binding arbitration. In Browne v. Kline Tysons Imports, Inc.,[252] the court held that even though a car buyer had signed a buyer’s order containing an agreement to submit all claims related to the sale of the car to binding arbitration and all the car buyer’s other claims were stayed pending binding arbitration, the car buyer’s claim under Magnuson-Moss was not subject to stay because Magnuson-Moss, even though it encourages informal dispute settlement mechanisms, preserved the car buyer’s right to have his dispute decided in a judicial forum.

Weinstein v. Todd Marine Enterprises[253] addressed the issue of a federal court’s exercise of personal jurisdiction in a federal question case under Magnuson- Moss. Noting that Magnuson-Moss did not authorize nationwide service, the court followed a two-step analysis in determining whether there was personal jurisdiction. Because plaintiffs claimed personal jurisdiction under the general jurisdiction theory rather than the specific jurisdiction theory, the court analyzed the New Jersey defendant’s contacts with Virginia to see if they were “fairly extensive” or “systematic and continuous.” The court found that advertising in several national magazines that are distributed in Virginia, having advertisements that can be accessed via the Internet from a computer located in Virginia, and occasionally mailing product information directly into Virginia was insufficient to establish personal jurisdiction.

In Chase v. DaimlerChrysler Corp.,[254] the court held that a consumer who ended her case against a car manufacturer under the VMVWEA in a settlement that did not conclude with an order or judgment in her favor was not a “successful party” entitled to attorney fees pursuant to section 59.1-207.14 of the Virginia Code.

In Kniska v. Subaru of America, Inc.,[255] the plaintiffs asserted that the VMVWEA permits an extension of the limitations period if the claimant notifies the manufacturer of the nonconformities during the lemon law rights period as provided in section 59.1-207.13(C). They further claimed that Subaru received actual notice of the vehicle’s nonconformities during the lemon law rights period since the car was brought in for repairs at least 4 times before the 18-month period ran, and each time its nonconformities were reported to the dealer. Pointing out that “notice” is given when (i) a written complaint of the defects has been mailed to the manufacturer; (ii) the manufacturer has responded to the consumer in writing regarding the complaint; or (iii) a factory representative has either inspected the vehicle or met with the consumer or an authorized dealer regarding the nonconformity, the court found that notice to the dealer was not notice to the manufacturer. Moreover, the plaintiffs’ having brought their car in for repair for a variety of alleged nonconformities to two different car dealerships was not sufficient to find that Subaru had notice based on the warranty history.

5. Virginia Collision Damage Waiver Act.[256] In a contract for the lease of a motor vehicle that imposes upon the lessee an obligation to pay for any damage to the motor vehicle, the Virginia Collision Damage Waiver Act (CDWA) applies.[257] The CDWA prohibits collision damage waivers from containing an exclusion from the waiver of damages caused by the ordinary negligence of the lessee.[258]  Written notice in the text of the contract is required, stating that the lessee has the option to purchase a collision damage waiver and that purchase of the collision damage waiver is not mandatory.[259] The text of the notice is set forth in the CDWA, and the notice is required to be in type no smaller than bold-faced 10-point type. Any violation of the CDWA is subject to the enforcement provisions of the Virginia Consumer Protection Act.[260]

F. Credit.

1. Truth-in-Lending Act.[261]

a. In General. Attorneys who review consumer credit transactions should review for compliance with the federal Truth-in-Lending Act (TILA). The TILA and Regulation Z of the Code of Federal Regulations apply to each individual or business that offers or extends credit when four conditions are met: (i) the credit is offered or extended to consumers; (ii) the offers or extensions are done regularly; (iii) the credit is subject to a finance charge or by a written agreement is payable in more than four installments; and (iv) the credit is primarily for personal, family, or household purposes.[262]  The TILA requires written disclosures, including, for

example, the annual percentage rate and total finance charge.[263] The TILA also requires refunds of all unearned interest. Calculation of refunds by the Rule of 78s is prohibited for loans lasting more than 61 months—in such a case, the TILA requires a method for calculating refunds at least as favorable to the consumer as the actuTimes New Roman method.[264]

b. Creditor Civil Liability. The creditor is liable when failing to comply with any requirement imposed under the TILA, including for example, failure to make the required disclosures.[265]  The TILA allows creditors to correct errors to avoid liability—for example, if the creditor corrects an error within 60 days of discovery of the error, the creditor is not liable for the error.[266] Also, if a creditor has made an error using the Federal Reserve Board model forms or in conjunction with the creditor’s compliance with the Federal Reserve Board’s published commentary to Regulation Z, the creditor is not liable for the error.[267]

An action may be brought by a consumer within one year of the violation.[268]  However, the consumer may exercise his or her right of rescission within three years of the transaction if the required disclosures are not made.[269]  Moreover, a court may award damages and other relief under 15 U.S.C. 1640 in addition to rescission.[270]  Importantly, regardless of whether the three-year or the one-year limitation applies, neither limits the consumer’s right to raise the violation as a counterclaim or as a setoff after the limitations period has expired, except as provided by state law.[271]

In Nigh v. Koons Buick Pontiac GMC, Inc.,[272] Nigh initially purchased a truck from Koons Buick on February 4, 2000, when he signed the first buyer’s order and retail installment sales contract (RISC I), reflecting that he would pay $4,000 down and trade in his old vehicle. Nigh was given a temporary certificate of ownership and left with the truck. Koons, however, was unable to find a willing lender, and the deal was restructured to require an additional $2,000 down payment. The dealership represented this change to Nigh as a “better deal” at a lower rate, which necessitated a new RISC (RISC II). Nigh returned to the dealership on February 25 based on this representation but told Koons he did not have an additional $2,000. He asked to return the new truck, retrieve his trade-in vehicle, and walk away from the deal. Koons, however, told him he could not withdraw because it had already sold his trade-in. Nigh, unaware of this statement’s falsity, signed RISC II and a $2,000 promissory note to cover the added down payment. Koons, again unable to find a willing lender, had Nigh come back and sign a new RISC (RISC III) on March 5, which was back-dated to February 25, and threatened Nigh that if he did not sign it, the truck would be reported as stolen.

Subsequently, Nigh learned that his trade-in vehicle had not been sold as Koons had told him. It had been subsequently repossessed from the Koons lot by its noteholder because Nigh had failed to make required payments, thinking that Koons now owned it. Nigh also learned that one of the reasons Koons had been unable to get a lender to accept RISC II was that it contained an unaccounted-for charge, later determined to be for a product whose sale to Nigh had not been properly documented, which Nigh did not recall seeing on the transaction documents, and which he had never requested, agreed to accept, or received. The product, a car alarm, was listed on the second buyer’s order and on RISC II at a price of $965. Absent from the transaction documents was a “we owe” form, which is used in retail car sales to document the sale of “after market” products in financed transactions.

Nigh sued and at trial prevailed on his TILA claim that Koons intentionally included the charge for the alarm on RISC II without a basis for the charge and on his Virginia Consumer Protection Act (VCPA) claim that Koons violated the VCPA by telling him that he did not have valid possession of the truck in order to induce him to sign RISC III. In upholding Nigh’s verdict, the Fourth Circuit Court of Appeals[273] noted that Regulation Z[274] defines consummation as the “time that a consumer becomes contractually obligated on a credit transaction” and that Nigh had become committed to the transaction when he signed and gave the documents to Koons and that consummation, or extension of credit, could therefore encompass an unfunded financing agreement.

Although the Fourth Circuit further upheld the trial court’s allowance of statutory damages of twice the finance charge in connection with the transaction, the United States Supreme Court reversed this part of the decision and held that TILA capped the award for finance charges at $1,000.[275]  On remand, the district court reduced the award and ordered the dealership to pay $85,083.60 in attorney fees.[276]

Koons again appealed to the Fourth Circuit,[277] this time arguing that Nigh no longer deserved the award of costs and attorney fees in the protracted litigation, or at least did not deserve fees for the work done in connection with the Supreme Court appeal and subsequent proceedings. The court rejected Koons’ argument noting, inter alia, that while the extent of relief obtained by the plaintiff was important in determining reasonable attorney fees, Nigh’s TILA action was successful, so Koons must pay costs and reasonable fees. The Fourth Circuit remanded only so that a believed error in transcription with respect to the initial trial proceedings’ fee award could be corrected.

In Barnes v. West, Inc.,[278] a car dealer erroneously calculated the annual percentage rate of interest based on interest commencing on the date the plaintiff made a down payment and drove the car away and not on the date, nine days later, when she signed the retail installment sales contract RISC). Mrs. Barnes included with her other claims a violation of the TILA. The dealer moved to dismiss since the suit was filed more than one year after the transaction. Mrs. Barnes countered, arguing equitable tolling. Noting that every circuit that has considered the issue has concluded that the TILA is subject to equitable tolling when there has been fraudulent concealment of the plaintiff’s cause of action, the court examined whether she was entitled to equitable tolling on the facts she alleged. To invoke fraudulent concealment as a ground for equitable tolling, the court noted that a plaintiff must demonstrate three elements: “(1) the party pleading the statute of limitations fraudulently concealed facts that are the basis of the plaintiff’s claim; (2) the plaintiff failed to discover those facts within the statutory period, despite (3) the exercise of due diligence.”[279]  The court found, however, that the defendant’s act of back-dating the RISC concealed nothing from the plaintiff and that the plaintiff’s ignorance of the law did not stem from any act of concealment by the defendant since it had no duty to explain the law.

In Scroggins v. LTD, Inc.,[280] Scroggins agreed to trade in her old car towards the purchase of a 2002 Toyota RAV 4 from Lustine Toyota Dodge (LTD). At that time, Scroggins was advised by the LTD representative that if she traded in her old car and made a $1,000 down payment, LTD would finance the remaining $22,104.74. In the salesman’s words, the financing given the trade-in and the $1,000 payment was “a done deal.” Scroggins then signed a buyer’s order and retail installment sales contract (RISC) and gave LTD a post-dated check for $1,000. LTD, in turn, provided Scroggins with a temporary certificate of ownership and allowed her to drive the car away. Scroggins returned a few weeks later to pay $1,000 to replace the post-dated check and again signed a buyer’s order and RISC. Both buyer’s orders contained the clause, “This sale is conditioned upon approval of your proposed retail installment sale contract.” About three months after Scroggins’ initial agreement in November to buy the car, LTD advised Scroggins that LTD would not provide the financing for her purchase of the car. Instead, according to Scroggins, LTD demanded that she return the car, which she did. When Scroggins demanded that LTD return her trade-in car, LTD informed her that it had already been sold at auction. Scroggins sued, alleging among other counts a violation of the TILA. The court concluded, however, that the dealer did not violate the TILA by declining to provide the financing promised in the RISC or by failing to pay a license and registration fee listed in the RISC.

In Rucker v. Sheehy Alexandria, Inc.,[281] Rucker purchased a car from Sheehy Alexandria, Inc. (Sheehy) on April 3, 2001, and, after the parties executed an initial agreement including a buyer’s order, a retail installment sales contract (RISC), and a bailment agreement, he drove the car away. The deal was conditioned upon financing being obtained from a third party under the terms of the RISC within five days, but no financing was obtained. Sheehy did not immediately demand that Rucker return the car. On April 13, 2001, Sheehy received a counteroffer approving financing on terms less favorable to Rucker and asked Rucker to return to the dealership. The parties reached a second agreement that required an additional $1,000 down payment from Rucker and resulted in financing a smaller amount for a shorter term at a stated APR of 24.95 percent, an increase of 2 percent over the originally proposed rate. Rucker signed a new buyer’s order and RISC, which were back-dated to April 3, 2001. The 24.95 percent APR disclosed in the April 13 RISC was calculated based on an interest accrual date of April 3, 2001, the nominal date of the agreement, and not April 13, 2001, the actual date the agreement was consummated. This resulted in the APR being understated by 0.4 percent. Relying upon Regulation Z[282] as well as Krenisky v. Rollins Protective Services Co.,[283] which held that Regulation Z precludes the use of an earlier effective date when calculating an APR, the court granted summary judgment to Rucker on the TILA claim. The plaintiff was awarded statutory damages of $13,345.82 and $18,871 in attorney fees.[284]

In awarding attorney fees, the court noted that where multiple claims are involved that rest on “distinctly different” facts and legal theories, the “burden of showing which hours are recoverable for work on the successful claims” rests on the fee applicant.[285]  It is the applicant’s burden to submit documentation that reflects “reliable contemporaneous recordation of time spent on legal tasks that are described with reasonable particularity” so that the court can determine reasonable hours expended and then multiply that amount by a reasonable hourly rate, in this case $250 for a senior partner, to obtain the lodestar amount.[286]

c. Remedies. In private actions, the consumer may recover damages, including actual damages, costs, attorney fees, and a penalty.[287] Additionally, an assignee may be liable if there is a violation apparent on the face of the contract.[288]

The TILA also allows rescission, as against the creditor and assignees, for failure to make the disclosures required by the TILA.[289]  Violation of this right of rescission, when proved, can trigger additional remedies.[290] In consumer credit transactions in which the security for the credit is the principal dwelling of the person to whom credit is extended, the consumer is authorized to rescind the sales agreement within three days after receiving the disclosure statement required by the TILA.[291]  The creditor may also be liable for criminal penalties if the creditor’s violation of the TILA is willful and knowing.[292]

Consumers can waive their right to a jury trial and consent to binding arbitration in most consumer contracts. In Green Tree Financial Corp.- Alabama v. Randolph,[293] an arbitration clause in a mobile home financing agreement that said nothing about the costs of arbitration was held to be enforceable where the party seeking to invalidate the agreement failed to show that arbitration would be prohibitively expensive.

In Sydnor v. Conseco Financial Servicing Corp.,[294] the Fourth Circuit reversed the denial of the finance company’s motion to compel arbitration brought in a homeowners’ lawsuit for allegedly violating the Virginia Consumer Protection Act and the TILA and fraudulently inducing the home improvement contract. The court held that the arbitration agreement was not unconscionable because there was little evidence that the arbitration was prohibitively expensive, the finance company said it would pay the arbitration fees, and there were no egregiously unfair arbitration rules as there were in Hooters of America, Inc. v. Phillips.[295]  Second, the court held that the homeowners had knowingly waived their right to a jury trial since the arbitration agreement stated in capital letters that “THE PARTIES VOLUNTARILY AND KNOWINGLY WAIVE ANY RIGHTS THEY HAVE TO A JURY TRIAL.” Finally, the case was remanded to hold a hearing under the Prima Paint Corp. v. Flood & Conklin Manufacturing Co.[296] standard to determine whether the homeowners’ allegations of fraud apply to the contract generally (which would be for the arbitrator to resolve) or specially to the arbitration clause (which would be for a court to resolve).

In Camacho v. Holiday Homes, Inc.,[297] the costs of an arbitration pursuant to the Commercial Rules of the American Arbitration Association were found to be an insurmountable financial barrier for an in forma pauperis plaintiff. The arbitration clause was, therefore, found to be unenforceable because it precluded the consumer from effectively vindicating her rights under the TILA. The court, however, offered to entertain a motion to reconsider if the defendant agreed to bear the costs associated with the arbitration.

2. Federal Fair Credit Billing Act.[298]

a. In General. The federal Fair Credit Billing Act (FCBA) provides a consumer 60 days after receipt of a bill to give the creditor written notice of an error in the bill.[299]  The creditor then has 30 days in which to respond.[300] During this period, the consumer is not required to pay the disputed amount.[301]  Moreover, the creditor cannot restrict or close the consumer’s account during that period, except to include the disputed amount when computing expenditures toward the credit limit.[302]

Furthermore, a credit card issuer cannot set off any disputed credit card transaction with other funds on deposit with the card issuer without the written consent of the consumer.[303]

b. Disclosure Reports to Consumer Reporting Agencies.

If a consumer persists in disputing the bill beyond the 30-day period (in which the creditor sent its reply to resolve the problem), the creditor must state in any report to a consumer reporting agency that the consumer disputes the bill and send to the consumer the name and address of each party to whom the creditor sent the report.[304]

c. Credit Card Issuers. For many claims that the consumer may make against the seller, the consumer may also make the same claims against the credit card issuer for the pertinent transaction.[305] However, a credit card issuer’s liability is limited to the amount charged to the card in the transaction.[306]  Before the credit card holder makes a claim against the credit card issuer, the credit card holder is required to make a good faith effort to obtain satisfactory resolution.[307]

When more than one transaction is disputed, the initial disputed transaction is required to have been over $50 and to have occurred within 100 miles of the consumer’s address as listed with the credit card company.[308] The question of where the initial transaction took place is determined under state law.[309] In Virginia, a transaction is presumed to have occurred at the mailing address most recently provided by the cardholder to the card issuer, without regard to the location where the last act necessary for the formation of the contract between the cardholder and the party honoring the card took place.[310]

3. Federal Consumer Leasing Act.[311] The federal Consumer Leasing Act (CLA) requires that creditors disclose the terms of personal property leases that extend for more than four months and are in an amount of $25,000 or less.[312]  The CLA also requires advertising disclosures[313] and prohibits unreasonable charges for default or early termination of a lease.[314]  A lessor who fails to comply with the CLA can also be liable under the Truth-in-Lending Act.[315]  In Kittrell v. RRR, L.L.C.,[316] the Eastern District held that a plaintiff who elected to keep the car and seek CLA damages cannot recover pursuant to an initial lease under which plaintiff made no payment and which became void and was superseded by a second lease. Rather, the plaintiff could only sue over the facial inaccuracies in the second lease. It also held that a plaintiff is limited to a single joint and several judgment against the lessor and the assignee of the lease. Any action alleging failure to disclose or otherwise comply with the requirements of the CLA must be brought within one year of the termination of the lease agreement.[317]  For consumer leases under state law, an attorney should also review the Virginia Lease-Purchase Agreement Act,[318] which is enforceable under the Virginia Consumer Protection Act.

4. Federal Fair Credit Reporting Act.[319]

a. Requirements. The federal Fair Credit Reporting Act (FCRA) requires credit reporting agencies to follow reasonable procedures to assure accuracy.[320]  Consumer credit reporting agencies can only supply information that the recipient intends to use in connection with a credit, employment, insurance, license, or governmental benefit application or other legitimate need for a business transaction.[321]

These broad authorizations can be expanded by consumer instructions to the reporting agency.[322]  On the other hand, additional limits on the credit reporting agencies include, for example, a prohibition against reporting obsolete information (over 7 years old or bankruptcies over 10 years old).[323]  There are several exemptions from the FCRA: (i) credit transactions involving a principal amount of $150,000 or more; (ii) underwriting life insurance policies of $150,000 or more; and (iii) employment of persons with salaries of $75,000 or more.[324]

b. Consumer Rights. Upon request, the consumer reporting agency must clearly and accurately disclose to the consumer all information in the consumer’s file and its source.[325]  The consumer may also request the names and addresses of all entities that obtained reports regarding the consumer in the preceding 12 months or, if the reports were for employment purposes, in the preceding two years.[326]  The consumer reporting agency must provide to the consumer, with each response to the consumer’s request for disclosure, a summary of the consumer’s rights set forth in the FCRA.[327] Consumers are entitled to one free credit report per year from each of the major credit bureaus - Experian, Equifax, and TransUnion.[328]

c. Remedies. If the consumer notifies the consumer reporting agency that he or she disputes the accuracy of a report by the agency, the agency is required to reinvestigate the matter.[329]  Additionally, if the consumer proves that the agency acted with negligence in failing to comply with the FCRA, the consumer’s remedy includes actual damages, costs, and attorney fees.[330]  Furthermore, if the consumer proves that the agency acted in willful noncompliance with the FCRA, the consumer may also obtain punitive damages.[331]

In Dalton v. Capital Associated Industries, Inc.,[332] a prospective employee was not hired after a false report about his criminal record was provided to a prospective employer. Summary judgment for the defendant was reversed because the prospective employee had created a triable issue of fact on two issues. First, the prospective employee created a triable issue of fact on the accuracy of the report where the credit reporting agency said he had been convicted of a felony when he had only been convicted of a misdemeanor. Second, the prospective employee created a triable issue of fact as to whether the consumer reporting agency followed “reasonable procedures to assure maximum possible accuracy of the information” about him as required by 15 U.S.C. 1681e(b).

In Johnson v. MBNA America Bank, NA,[333] the plaintiff, Linda Johnson, alleged that the defendant bank, MBNA, violated a provision of the FCRA[334] by failing to conduct a reasonable investigation of Johnson’s dispute concerning an MBNA MasterCard account appearing on her credit report. The key issue was who had applied for the account and was therefore obligated to pay amounts owed on it. One of the applicants for the account, which was opened in 1987, was Edward N. Slater, whom Johnson married in 1991. MBNA contends that Johnson was a co-applicant with Slater and thus a co-obligor on the account. Johnson claims that she was merely an authorized user and not a co-applicant.

In 2000, Slater filed for bankruptcy, and MBNA promptly removed his name from the account. MBNA then contacted Johnson and informed her that she was responsible for the approximately $17,000 balance on the account. After obtaining copies of her credit report from the three major credit reporting agencies, Johnson disputed the MBNA account with each of the credit reporting agencies. In response, each agency sent to MBNA an automated consumer dispute verification (ACDV). The ACDVs that Experian and TransUnion sent to MBNA specifically indicated that Johnson was disputing that she was a co-obligor on the account.[335]  The ACDV that Equifax sent to MBNA stated that Johnson disputed the account balance.[336]

In response to each of these ACDVs, MBNA agents reviewed the account information contained in MBNA’s computerized customer information system (CIS) and subsequently notified the credit reporting agencies that MBNA had verified that the disputed information was correct. Based on MBNA’s responses to the ACDVs, the credit reporting agencies continued to include the MBNA account on Johnson’s credit report.[337]

Johnson sued MBNA, claiming, inter alia, that it had violated the FCRA by failing to conduct a proper investigation of her dispute.[338]  A jury trial was held, and the jury found that MBNA had negligently failed to comply with the FCRA and awarded Johnson $90,300 in actual damages.[339]  The Fourth Circuit Court of Appeals affirmed.[340]

d. Statute of Limitations.[341]  When the consumer seeks to prove negligent noncompliance with the FCRA, the case must be filed within two years after the date of discovery, or within five years of when the cause of action arose, whichever is earliest.

5. Federal Equal Credit Opportunity Act.[342] The federal Equal Credit Opportunity Act (ECOA) prohibits discrimination against any credit applicant based upon sex, marital status, race, color, religion, national origin, age, receipt of income from any public assistance program, or good faith exercise of rights under the Consumer Credit Protection Act.[343] The ECOA applies to all stages of a credit transaction (including, possibly, an oral request). Attorneys reviewing credit applications under the ECOA should review its numerous exceptions.[344]  The consumer may seek actual and punitive damages, costs, attorney fees, and equitable and declaratory relief.[345]

The statute of limitations is two years from the occurrence of the violation.[346]  However, in cases where a state or federal agency has started an action based upon an event in which the consumer also seeks recovery, the statute of limitations is tolled so that the consumer is authorized an additional year after the commencement of a federal or state government administrative action or suit. There is conflicting case law interpreting when and how the statute of limitations applies. For example, when a consumer seeks to use the provisions of the ECOA as a counterclaim or a defense, the statute of limitations has been applied with varying results—both to bar and to allow the counterclaim or defense.[347]

In Diaz v. Virginia Housing Development Authority,[348] the unmarried plaintiffs’ claims under the Equal Credit Opportunity Act[349] and its Virginia counterpart[350] were dismissed because (i) the Virginia Housing Development Authority regulations requiring recipients of FHA Plus loans to be married were valid and (ii) by counteroffering the applicants a different loan which was accepted, the initial denial was exempted from the definition of “adverse action” under the ECOA and, thus, there was no need to provide written notice of that denial.

6. Virginia Equal Credit Opportunity Act.[351]  The Virginia Equal Credit Opportunity Act (VECOA) is the Virginia counterpart to the federal Equal Credit Opportunity Act.[352]  The VECOA prohibits discrimination against any applicant with respect to any aspect of a credit transaction.[353]  The State Corporation Commission is authorized to enforce the VECOA via mediation.[354] Additionally, any consumer who has a cause of action for violation of the VECOA may seek actual damages, attorney fees, costs, and up to $10,000 in punitive damages if actual damages are awarded.[355]  In a loan involving a married couple, a creditor may require both spouses to execute a secured transaction.[356]  However, the VECOA prohibits a creditor from taking sex or marital status into account in connection with the evaluation of creditworthiness of any applicant.[357]  The VECOA does not require both spouses to sign a deed. Any action under the VECOA must be brought within two years of the occurrence of the violation.[358]

7. Virginia Credit Services Businesses Act.[359]

a. In General. A credit services business attempts, for a fee, to improve a consumer’s credit record, to obtain a credit extension for a consumer, or to provide assistance in those services.[360]  Credit services businesses must register with the Commissioner of Agriculture and Consumer Services and maintain a bond or a letter of credit with the Commissioner.[361]  Additionally, the Virginia Credit Services Businesses Act (VCSBA) requires several disclosures and prohibits misleading statements and certain payments.[362]  For example, a credit services business is not entitled to payment for its services (i) when the credit services have not been completed and (ii) when the consumer is referred to a credit grantor that provides the same opportunities to the general public without referral from the credit services provider.[363] Moreover, the consumer credit services business is prohibited from making false or misleading statements to consumer reporting agencies or prospective creditors regarding the consumer’s creditworthiness.[364]

b. Consumer Rights. Before executing a contract with, or receiving any consideration from, a consumer, a credit services business must provide to the consumer an “information statement.”[365] This statement includes, for example, notice of the consumer’s independent rights regarding the consumer’s credit reports and notice that the credit services business will provide the consumer with a copy of the consumer’s credit report for a nominal fee.[366]  Attorneys should review the substantial statutory provisions regarding prohibitions and disclosures and consider that any breach of these requirements can render the contract null and void.[367]  For example, the credit services contract must contain a conspicuous statement that the consumer can void the contract with the credit services business until midnight of the third day after signing the contract. [368] Under the VCSBA, contracts without this statement are void.[369]  Furthermore, any waiver of a right under the VCSBA by the consumer is void.[370]

c. Enforcement. To enforce the VCSBA, the Attorney General, any attorney for the commonwealth, or any attorney for a county, city, or town may institute a proceeding under the Virginia Consumer Protection Act.[371]  Negligent noncompliance by a credit services business can incur liability to a consumer for actual damages.[372]  Willful noncompliance can incur liability for actual damages plus any punitive damages that the court will allow.[373]  The statute of limitations is two years from the violation, unless a misrepresentation is willful and material, in which case the action may be brought at any time within two years after discovery by the consumer of the misrepresentation.[374]

G. Unclaimed Gift Certificates. Gift certificates that were purchased often contain a time limit in which they must be used. However, many businesses do not realize that a gift certificate issued in the ordinary course of the issuer’s business that has remained unclaimed by the owner for more than five years after becoming payable is presumed abandoned.[375]  This means that if the business is unable to locate the owner, it must voluntarily report the property to the State Treasurer before the statutory due dates, and the property becomes subject to the custody of the commonwealth as unclaimed property.[376]  Thus, consumers have a strong argument with gift certificate issuers that the issuer must honor a purchased gift certificate even though the time to use it has expired. This rule, however, does not apply to credits, gift certificates, coupons, layaways, and similar items, that are redeemable in merchandise or services or through future purchases.[377]

Virginia Recovery Funds.

A. Contractor Transaction Recovery Fund. The Virginia Contractor Transaction Recovery Fund (the Fund) assists consumers who have received a judgment against a home improvement or home building contractor that involves improper or dishonest conduct.[378]  The Fund is generated by assessments upon contractors at the time they pay their contractor license fees. Procedurally, the consumer must first obtain a state civil judgment against the contractor.[379]  The consumer must send copies of all pleadings and documents to the Board of Contractors.[380]  When the consumer files a claim with the Fund, he or she must file a verified claim and must also file a copy of the underlying judgment and additional information set forth by statute.[381]  The consumer is authorized to recover actual damages, attorney fees, and costs.[382]  There is a limit of $20,000 per claim and $40,000 per contractor for each biennium.[383]  The claim must be filed within 12 months of the judgment.[384]

B. Motor Vehicle Transaction Recovery Fund. The Virginia Motor Vehicle Transaction Recovery Fund assists consumers who have been defrauded by motor vehicle dealers or their salespersons.[385] All initial court complaints and subsequent pleadings and documents must be served on the Motor Vehicle Dealer Board.[386]  A consumer may file a verified claim for the amount of an unpaid judgment.[387]

The claim must be filed not less than 30 days and not more than 12 months after the judgment becomes final.[388] Section 46.2-1527.5 of the Virginia Code authorizes consumer recovery of not more than $20,000 per claimant ($50,000 aggregate after the dealer’s $50,000 bond is exhausted, or $100,000 aggregate if there is no bond) for actual damages. It excludes interest and exemplary and punitive damages.

C. Real Estate Transaction Recovery Fund. The Real Estate Transaction Recovery Fund (the Fund) assists consumers who receive a final judgment for loss or damages as the result of improper or dishonest conduct in connection with the sale, lease, or management of real estate.[389] Recovery is authorized from the Fund only for licensed real estate brokers or salespersons against whom a judgment has been obtained but not totally paid.[390]  The consumer must serve upon the Real Estate Board a copy of all pleadings and documents in the underlying case.[391]  The maximum recovery for a single claimant in a single transaction is $20,000, regardless of the amount of the unpaid judgment.[392]  The maximum aggregate recovery against a single licensee is $50,000 (single incident) and $100,000 (more than one incident) per biennial licensing period.[393]  Claims in excess of the applicable maximum amounts are prorated among claimants.[394]  The claim must be a verified claim and must be filed no later than 12 months after the judgment becomes final.[395] The claimant may recover damages, costs, and attorney fees but may not recover interest or exemplary or punitive damages.[396]

D. Manufactured Housing Transaction Recovery Fund. The Manufactured Housing Transaction Recovery Fund (the Fund) assists consumers who experience losses or damages in connection with purchases of manufactured homes that occurred as a result of a statutory violation.[397] The Fund has some unique requirements that do not apply to the funds discussed in the preceding paragraphs. For example, recovery is authorized only after the licensed or registered manufactured home dealer, broker, or salesperson who committed the violation has been directed by the Virginia Manufactured Housing Board (the Board) to pay the amount to the consumer and has failed to do so within 30 days of the Board’s direction.[398]  The maximum recovery for a single claimant for any number of violations is $40,000, regardless of whether there is a greater amount of unpaid judgment.[399]  The maximum aggregate recovery is $75,000 per manufacturer, $35,000 per broker or dealer, and $25,000 per salesperson.[400] Claims in excess of the maximum aggregate amounts are prorated among the claimants.[401] Claims are limited to actual compensatory damages during the license period and do not include attorney fees for representation before the Board.[402]  The Virginia Code imposes warranty requirements for the sale of new manufactured homes.[403]  For warranty purposes, a manufactured home continues to be “new” if it is sold to another dealer and then sold to a consumer within two years of its manufacture. When a home is sold by a subsequent dealer after the two-year period has expired, it must be sold as “used,” and the seller must provide a written notice to the consumer that state warranty requirements for new manufactured homes do not apply.[404]

Consumer-Related Business Promotions.

A. Pyramid Sales.[405] A “pyramid promotional scheme” is a pyramid or chain process by which participants give valuable consideration for the opportunity to receive compensation in return for inducing other persons to participate.[406]  All contracts in which any part of the consideration given is for the opportunity to participate in a pyramid promotional scheme are void and unenforceable.[407]  “Valuable consideration” does not have to be cash payment.[408] Time and effort expended to generate sales to third parties also constitute valuable consideration. In determining whether compensation is based on sales of goods to non-participants (as opposed to inducement of other persons to participate in the pyramid promotional scheme), the predominant theme of songs, cheers, printed materials, and representations about large profits from inducing others to participate should be considered.[409]  Proof of the establishment of a pyramid promotional scheme does not require that intermediate parties receive commissions from the efforts of their recruits.[410]  Participants may be agents of their out-of-state promoters, and their actions may bind the out-of-state promoter corporation.[411]  Violation of the statute is a Class 1 misdemeanor.[412]  Attorneys should also review pyramid promotional schemes for violation of the Virginia Consumer Protection Act.[413]

B. Referral Rebate Sales. A referral rebate promotion is an inducement to contract by an offer of value that is contingent upon specific future events.[414]  An example of a referral rebate promotion would be an offer to give a rebate as an inducement in return for the buyer giving to the seller names of potential buyers, where earning the rebate is contingent upon sales to the potential buyers. Contracts executed in conjunction with such a scheme are void and unenforceable.[415] Moreover, the consumer may retain the goods or recover the sums paid to the seller or lessor.[416]

C. Home Businesses. Attorneys reviewing home business contracts should examine the Virginia Consumer Protection Act (VCPA).[417]  Under the VCPA, the term “business opportunity” means the sale of any products, equipment, supplies, or services that are sold to an individual for the purpose of enabling the individual to start a business to be operated out of his or her residence but does not include a business opportunity that is subject to the Business Opportunity Sales Act.[418]  Additionally, to the extent that a business is operated from a home and also involves a pyramid promotional scheme[419] or a referral rebate sales scheme,[420] see the preceding two paragraphs.

D. Business Opportunity Sales Act.[421] The Business Opportunity Sales Act (BOSA) applies to the “sale of any products, equipment, supplies or services which are sold to a purchaser upon payment of an initial required consideration exceeding $500 for the purpose of enabling such purchaser to start a business” and in which the seller (i) represents that it will provide locations or help find locations for vending devices; (ii) represents that it will buy back any items that the purchaser does not sell; (iii) guarantees income or a refund; or (iv) represents that it will provide a sales program in which the income derived will exceed the price paid by the purchaser.[422] The BOSA requires substantial disclosures regarding the identity of the seller and prohibits misrepresentations regarding the seller’s identity, the prospects of income and, interestingly, reference to the seller’s compliance with the BOSA.[423]  The BOSA is not specifically identified as being enforced under the Virginia Consumer Protection Act, and the following sales are excluded from enforcement under the BOSA: securities, franchises, licenses, newspaper distribution systems, sales of ongoing businesses, sales demonstration equipment, and contracts in which a retailer is granted a right to sell goods or services within a retail business as a department thereof.[424]  If the seller uses untrue or misleading statements in the sale of a business opportunity, fails to give proper disclosures, or fails to deliver the equipment and supplies necessary to begin substantial operation of the business within 45 days of the delivery date stated in the business opportunity contract, then within one year of the date of the contract, the purchaser may void the contract with written notice to the seller.[425]  In such a case, the purchaser is required to tender the seller’s property at the purchaser’s address; unjust enrichment by the purchaser is not authorized under the BOSA for this rescission.[426] The BOSA also authorizes a civil action for damages and attorney fees by the purchaser.[427]

E. Unsolicited Merchandise. Receipt of unsolicited merchandise offered for sale is deemed for all purposes to be an unconditional gift.[428]  The unsolicited merchandise may be used or disposed of without any contractual or lawful obligation to return or pay for it.

Contractual Merger and Disclaimer.

A. Merger Clauses. A merger clause in a contract that disclaims all other representations outside the four corners of the written contract can be unenforceable if a misrepresentation outside the four corners induced the contract.[429] Accordingly, an express contractual warranty given in lieu of all other warranties or disclaiming all other warranties “as is” is ineffective if the contract is induced by misrepresentation.[430]

B. Collateral Agreements. When a contract states that verbal agreements or modifications will not change the contract, this statement must be printed in a separate paragraph in the contract in type not smaller than pica.[431]  However, the Virginia Uniform Commercial Code (UCC) requires that a disclaimer of the implied warranty of merchantability be conspicuous.[432]

Misrepresentations and Other Offenses. Section 18.2-214 et seq. of the Virginia Code sets forth several bases for civil recovery and for criminal prosecution regarding misrepresentations connected with sales. These bases are similar to the Virginia Consumer Protection Act (VCPA) in the context of prohibiting misrepresentations in consumer contracts. For these offenses, civil remedies for damages or $100, whichever is greater, and attorney fees are authorized.[433]  These bases for remedies should be considered in conjunction with other consumer contract prohibitions. For example, section 18.2-214 et seq. prohibits removal and alteration of trademarks, serial numbers, and identification numbers,[434] and the VCPA prohibits misleading statements[435] (which would arguably include, for example, removed or altered trademarks, serial numbers, and identification numbers). The statute also prohibits untrue, deceptive, or misleading advertising, inducements, or documents,[436] just as does the VCPA.[437]  The prohibitions of the statute, however, have been held not to apply to oral misrepresentations,[438] while the VCPA, the common law, and other statutes addressing consumer contracts arguably can be applied to oral misrepresentations by suppliers to consumers.[439]  In Parker-Smith v. Sto Corp.,[440] the two-year “catch-all” limitation period of section 8.01-248 of the Virginia Code was held to apply to claims for false advertising pursuant to section 59.1-68.3.

Collections.

A. Fair Debt Collection Practices Act.[441]

1. In General. In response to “abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors,” Congress enacted the Fair Debt Collection Practices Act (FDCPA).[442] Congress expressed concern that “[a]busive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.”[443]  Accordingly, the FDCPA requires disclosures, prohibits false and misleading statements, and prohibits unfair practices by debt collectors.

2. Venue. A collection case under the FDCPA must be filed in the jurisdiction where the debtor resides or where the contract was signed.[444] The FDCPA’s venue requirements apply to both federal and state courts.[445]

3. Disclosures. Any voice or written communication to a consumer debtor is a “communication,” requiring a statement of the amount of the debt,[446] the name of the creditor to whom the debt is owed,[447] and a clear statement that any information obtained will be used to collect the debt.[448]  Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector must, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing: (i) the amount of the debt; (ii) the name of the creditor to whom the debt is owed; (iii) a statement that the debt will be assumed to be valid by the debt collector unless the consumer disputes the validity of the debt or any portion thereof within 30 days of the notice accompanying the statement; (iv) an additional statement that, if the debt or any portion thereof is disputed in writing within 30 days of the notice, the debt collector will obtain and send a copy of a verification of the debt or judgment to the consumer; and (v) a statement that, upon the debtor’s written request within the 30-day period, the creditor will provide the name and address of the original creditor, if different from the current creditor.[449]

Attorneys who are regularly involved in litigation to collect consumer debts should be careful to follow the FDCPA requirements. The FDCPA prohibits a debt collector from communicating directly with the consumer or sending a copy of a bill of particulars or an affidavit for attorney fees to the consumer if the consumer is represented by an attorney in the matter and the attorney’s name and address can be readily ascertained.[450]  Filing a warrant in debt against a consumer after he or she has timely notified the debt collector that the consumer disputes the debt, without first ceasing collection efforts until obtaining written verification of the debt, violates the FDCPA.[451]  The FDCPA also prohibits a debt collector from making false, deceptive, or misleading statements in attempting to collect a debt.[452]

4. Applicability to Attorneys. The FDCPA applies to attorneys who regularly, through litigation, attempt to collect consumer debts.[453]  Moreover, an inhouse attorney who takes debt collection actions can be a debt collector under the FDCPA and not an employee—particularly when the attorney writes a letter on a letterhead containing his or her own name only, and refers to the employer as the “client.”[454]  While collections practices can benefit from the efficiencies of nonlawyer support, attorneys using such support are limited in their payment options with the nonlawyer support organizations. For example, an attorney cannot enter into a feesplitting arrangement with a nonlawyer corporation that supplies a case tracking system to collection lawyers such that the attorney would agree to pay a percentage of the attorney’s net collections to the nonlawyer corporation.[455]

5. False or Misleading Representations. Sixteen misrepresentations are specifically prohibited under the FDCPA.[456]  Examples include (i) a false representation that a bill collector is an attorney; (ii) false simulation of legal process; (iii) a false representation that a consumer has committed a crime; and (iv) a false threat of an action that a debt collector has no intent of taking or is legally prohibited from taking. Attorneys advising clients concerning these prohibitions against deception should apply the “least sophisticated debtor” standard.[457]

6. Unfair Practices. Eight unfair or unconscionable means of collection are specifically prohibited under the FDCPA.[458]  Examples include collecting excess amounts, taking or threatening to take property without a right to do so, and communicating by post card with a consumer regarding a debt.

7. Civil Liability. Private plaintiffs are authorized to recover actual damages (and additional damages that the court will allow not exceeding $1,000) plus attorney fees and costs. On the other hand, the defendant’s attorney fees and costs are authorized against the unsuccessful plaintiff who brings a case in bad faith for the purpose of harassment.[459]

B. Consumer Defenses to Enforcement of Security Interests.

1. Security Interests.

a. In General. A security interest is an interest to secure payment or performance of an obligation.[460]  One way to create a security interest is by a statutory lien.  There are over 30 statutory liens authorized in Virginia.[461]  A security interest can also be created by a written agreement, such as a deed of trust, an automobile loan, or other secured credit transaction. The collateral must be identified, and the agreement must be enforceable.[462] To be valid, an agreement creating a security interest must be in writing, signed by the debtor, with value given by the creditor, the buyer having rights in the collateral, and an adequate description of the collateral.[463] A security interest in consumer goods can only be an interest in the goods sold.[464]  The Consumer Finance Act, however, allows nonpurchase money security interests in household goods.[465]  A security agreement under the Consumer Finance Act must be signed by the borrower or, if married, by both spouses unless they have been living separate for five months. A security interest in household goods under this section does not impair any rights to exemption under the poor debtors law or other applicable exemption law.[466]

b. Requirements. The attorney should review security agreements for impermissible blank spaces and changes. At the time that the security agreement is executed, it is prudent for the parties to initial the document at the places where blanks and changes occur. It is impermissible to change the agreement after it is signed.[467]  The attorney should also ensure that the consumer entering into the security agreement has valid rights to the collateral.[468]  Moreover, the collateral must be identified.[469] The attorney should also review security interests for unconscionability.[470]

c. Accessions and After-Acquired Property. The agreement must describe the property that is agreed to be an accession.[471] Otherwise, an accession is arguably not collateral for the security agreement.[472]  Moreover, with regard to after-acquired property, the debtor must acquire rights to after-acquired property within 10 days after the secured party gives value.[473]  The attorney should review after-acquired property clauses for defects, since an improper after-acquired property clause can void a security agreement.[474]

d. Termination of a Security Interest. If the parties’ actions terminate a security interest, those actions may also preclude repossession, because the security interest upon which the repossession would be based may no longer exist. For example, when the collateral changes, the security interest may terminate.[475]  Similarly, the act of renewing a note, without renewing the security interest, may invalidate the prior security interest. Moreover, if a security agreement is not assigned with the note, the security interest may be terminated by the assignment of the note.[476] Of course, if the obligation is extinguished, there is no payment or performance to secure, and the security interest is terminated when the obligation is terminated.[477]

2. Consumer Default.

a. In General. Nonpayment can trigger the creditor’s contractual (and other lawful) remedies for default, including acceleration of payments and repossession. Attorneys reviewing a consumer default should consider a consumer’s potential responses under the authorities cited below.

b. Missed or Late Payments. If accepted by the creditor, consistently missed or late payments may modify the contract such that the debtor may be found not to be in default.[478]  Additionally, if the creditor has accepted late payments, the creditor may be estopped from repossessing without notice.[479]  Even if the contract has a waiver of notice provision, a creditor’s acceptance of late payments can be construed as a waiver of the payment provisions of a consumer contract, and such waiver may be construed to waive the acceleration of payments and the repossession without notice provisions as well.[480]

c. Debtor’s Limited Right to Cure Default. Virginia law authorizes acceleration clauses.[481] However, a purchaser of consumer goods may cure within 10 days after default, and the creditor may not require acceleration of payments during that period.[482]  Moreover, if a creditor repossesses and sells the collateral when the debtor is not in default or when the 10-day right to cure period applies, the proceeds of the creditor’s sale may need to be given to the debtor.[483]

3. Repossession.

a. Proceeding in Detinue.[484]  The sheriff or other proper officer may seize the property subjected to a security interest under a pretrial order from a judge or magistrate, and the court will retain jurisdiction over the property until the parties’ rights are determined.[485] Attorneys providing advice for repossessions should examine whether the presence of state officials at the scene of a repossession without a proper order violates due process.[486]

b. Self-Help Repossession.[487] Although the existence of a state statute authorizing self-help repossession may support an argument that self-help is encouraged, attorneys advising clients concerning repossessions should review the restrictions on self-help repossessions imposed by the courts, for example, those involving a “breach of peace.”[488]  If a repossession involves a “breach of peace,” the creditor can incur liability for damages.[489]  A “breach of peace” arises when bodily force or threats occur—violence is not required.[490]  Importantly, if a debtor objects to an attempted seizure of the property and the property is seized contrary to the objection, the creditor may be liable for damages.[491]  However, a debtor’s objection after seizure is not valid.[492]  A creditor’s trespass into a residence can also support damages against the creditor.[493] Moreover, the creditor may incur liability for the presence of the law enforcement officials, since their presence can be construed as constructive force. However, the debtor must know that the law enforcement officials are present.[494]

c. Consent to Repossession. The debtor may give voluntary consent to repossession. However, consent given under duress is not valid.[495]  Consent given by a third party must be under proper and sufficient authorization.[496]

d. Criminal Concealment. Debtors are prohibited from selling, hiding, destroying, or disposing of collateral with the intent to defraud the creditor.[497]

4. Creditor’s Disposition of Property.

a. Creditor Retention. A creditor may retain repossessed collateral in full satisfaction of the underlying debt, with no debtor deficiency, as long as the creditor notifies the debtor and the debtor agrees; otherwise, if the debtor objects within 20 days of notice of the creditor’s intended retention of the collateral, the creditor must dispose of the property by public or private sale.[498]  In such a case, if the creditor shows a lack of effort to dispose of the collateral, the creditor may be required to keep the collateral, and the debt will be deemed satisfied.[499]

b. Debtor’s Redemption. A defaulting debtor may redeem the collateral under the UCC, but the debtor’s redemption may be conditioned upon payment of an accelerated amount plus costs and expenses incurred in repossession.[500]  An attorney who advises a party concerning a debtor’s redemption rights should consider the consequences of a creditor’s refusing a debtor’s full tender of redemption. For example, if the creditor refuses tender of full payment, the creditor may arguably incur liability for conversion of the property.[501]

c. Sale of Collateral.

(1) In General. Unreasonable delay in the sale of collateral is prohibited.[502]  Moreover, when 60 percent of the cash price has been paid by the debtor, the creditor must sell the property within 90 days of repossession.[503]  Violation of this requirement may be enforced by an action to recover damages.[504]

(2) Notice. The creditor is required to send the notice of sale to the debtor and other interested parties.[505]

(3) Discharge of Maker, Co-Maker, or Endorser. A cancellation of the instrument discharges the debtor.[506]  Discharge of an endorser or accommodation party can occur when there is an extension of the due date of payment without permission[507] or an unjustifiable impairment of collateral.[508]

(4) Public Versus Private Sale. A public sale involves, among other things, a public auction and sufficient advertising.[509]  The secured creditor may bid at its own public sale as long as the creditor complies with the requirements for a public sale.[510]  Also, the secured creditor may buy at a public sale, and if the collateral is of the type customarily sold in a recognized market or is of the type that is the subject of widely distributed standard price quotations, the creditor may buy at a private sale.[511]  In comparison, any sale lacking the requirements of a public sale is a private sale, subject nevertheless to the requirement of being commercially reasonable.[512]  A transfer of collateral per a guaranty or repurchase agreement is not a sale and does not have the notice and procedural requirements of a sale.[513]

(5) Sale Price. A sale that does not obtain the optimum price is authorized, and a low price does not necessarily make a sale price unreasonable.[514]  However, an unreasonably low sale price at a public or private sale is susceptible to dispute.

d. Calculating a Debtor’s Deficiency.

(1) In General. After the creditor sells the repossessed collateral, the debtor is normally liable for any deficiency and entitled to any surplus.[515]  Attorneys should review the calculations of deficiencies and surpluses, as described below.

(2) Credits to the Debtor. Adjustments in favor of the debtor may include trade-ins, insurance cancellation after repossession, unearned interest, and rebates.[516] Methods for calculating rebates include the following:

(a) Pro Rata Method. The pro rata method takes pro rata calculation of the remaining period of the loan divided by the original period of the loan. This method is overly favorable to the consumer because the creditor earns more interest during the early part of the loan.

(b) ActuTimes New Roman Method. The actuTimes New Roman method is the most accurate method of calculation and uses amortization tables to show how much has been paid and how much is owed. This method of calculating rebates (or one at least as favorable to consumers) is required for all consumer credit transactions over 61 months.[517]

(c) Rule of 78s Method. The Rule of 78s method is authorized in Virginia, to the extent it is not prohibited by state and federal law.[518]  The Rule of 78s is overly favorable to the creditor because calculations under the Rule of 78s are based upon assumptions that during the first 1/12 of the contract, 12/78 of the interest was owed, during the second 1/12 of the contract, 11/78 of the interest was owed, and so on.

(3) Charges by the Creditor. Late charges not to exceed five percent of each late payment may be imposed, if set forth in the contract, for payments more than seven days past due.[519]  Reasonable charges for repossessing, reconditioning, storage, preparation for sale, and sale are authorized.[520]  Reasonable attorney fees are also authorized and are not subject to limitation as otherwise permitted by law.[521]

e. Deficiency Claims. When the creditor retains the collateral, the creditor is susceptible to being barred from claiming a deficiency.[522]  When the creditor disposes of the collateral, the creditor may seek a deficiency.[523]  However, even after the collateral is sold, a secured creditor may be susceptible to being barred from recovery of the deficiency—for example, if the secured creditor failed to comply with the UCC requirements for sale or if the sale did not obtain market value.[524] A debtor may also raise a defense of setoff or a counterclaim against the creditor’s claims.  For example, when the creditor has violated a provision of article 9 of the UCC, the debtor may be authorized to recover statutory damages.[525]  These damages may be used as a defense of setoff or a counterclaim by the debtor.

Residential Leases.

A. The Virginia Residential Landlord and Tenant Act.[526]

1. In General. The Virginia Residential Landlord and Tenant Act (VRLTA) applies to residential rental agreements entered into after July 1, 1974, that are not exempted by section 55-248.5 of the Virginia Code. Typical exemptions include (i) occupancy in a public housing unit, (ii) occupancy by a tenant who pays no rent, and (iii) occupancy in a single-family residence where the owners own no more than ten single-family residences subject to the rental agreement or, in a city or certain counties, no more than four single-family residences.  The VRLTA is an integrated statutory scheme governing contractual relationships between landlords and tenants. For example, section 55-248.13(A) of the Virginia Code requires a landlord to “[c]omply with the requirements of applicable building and housing codes materially affecting health and safety” and “[m]ake all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition.”

2. Breach of Covenant to Repair. A landlord’s breach of the covenant to repair renders him liable only to an action in contract for the breach of the covenant in which recovery is limited to the costs of repairs and any loss of use sustained.[527]

3. Tenant’s Remedy. A breach of the VRTLA does not create a statutory cause of action allowing a tenant to recover damages for personal injuries resulting from the landlord’s noncompliance with duties imposed by the VRLTA.[528]  The common-law rule is that a landlord is not liable in a tort for a tenant’s personal injuries caused by the landlord’s failure to repair premises under the tenant’s control and possession. Thus, a landlord does not have a common-law duty to make repairs after he delivers possession to the tenant.[529]  The tenant’s remedy for a landlord’s material noncompliance with the rental agreement or a noncompliance with any provision of the VRLTA that materially affects health and safety is to provide the landlord with written notice and an opportunity for the landlord to correct the breach. If the landlord does not correct, the tenant may terminate the rental agreement.[530]

B. Common-Law Cause of Action for Making Negligent Repairs. If a landlord enters the leased premises for the purpose of making repairs, he or she must use reasonable care in performing the work.[531]  Failure to use reasonable care can result in liability for negligence if a tenant is injured by the landlord’s negligence or negligent work.

Residential Real Estate Contracts.

A. Virginia Residential Property Disclosure Act.[532]

1. In General. The Virginia Residential Property Disclosure Act (VRPDA) applies to transfers by sale or exchange, installment land sales contracts, and leases with an option to buy one to four dwelling units.[533] It affects real estate transactions primarily by imposing disclosure requirements upon the seller.[534]  There are substantial limits on remedies if the disclosures required by the VRPDA are properly given. Accordingly, attorneys who review residential real estate transactions should review for proper disclosures under the VRPDA.

2. Disclosures. The VRPDA requires the seller to deliver the statutorily mandated disclosures to the buyer before the buyer accepts the real estate contract.[535]  The VRPDA requires the seller to disclose to the buyer any pending enforcement actions pursuant to the Uniform Statewide Building Code[536] or any pending violations of the local zoning ordinances that are not yet remedied or abated by the violator and of which the seller has been notified. Additionally, the VRPDA requires notice that the seller makes no representations about, among other things, the condition of the real property or improvements thereon, any matters concerning the adjoining property, or information regarding registered sexual offenders.[537]

3. Right to Terminate the Contract. The purchaser’s remedy under the VRPDA is to terminate the real estate contract before the earliest of (i) three days after delivery of the disclosure statement in person; (ii) five days after the postmark if the disclosure statement is deposited in the United States mail, postage prepaid, and properly addressed to the purchaser; (iii) settlement upon purchase of the property; (iv) occupancy of the property by the purchaser; (v) the purchaser making written application to a lender for a mortgage loan where such application contains a disclosure that the right of termination shall end upon the application for the mortgage loan; or (vi) the execution by the purchaser after receiving the disclosure statement required by this chapter of a written waiver of the purchaser’s right of termination under this chapter contained in a writing separate from the real estate purchase contract.[538]

4. Exemptions. Under the VRPDA, several transfers are exempt, including transfers pursuant to a court order, to a beneficiary under a deed of trust, to a trustee pursuant to a foreclosure sale, to a beneficiary who has acquired real estate by deed in lieu of foreclosure, by fiduciaries, among co-owners, to a spouse, to or from governmental entities, and first sales of a dwelling.[539] Nevertheless, builders are still required to disclose known violations of the building code. This requirement of disclosure does not abrogate the builder’s applicable warranties or contracts.[540]

5. Real Estate Broker’s Responsibility. Real estate brokers and their salespersons licensed in Virginia are also required to inform each purchaser of the purchaser’s rights and obligations under the VRPDA. If the broker makes proper disclosures, then the broker’s VRPDA liability ends.[541]

B. Action Against Realtor for Breach of Listing Contract. The General Assembly has adopted statutory guidelines for the conduct of realtors. The standards of conduct for licensed realtors engaged by sellers are contained in section 54.1-2131 of the Virginia Code; the standards of conduct for licensed realtors engaged by buyers are contained in section 54.1-2132. A breach of the professional duty owed to a buyer or seller or breach of the listing contract can result in liability for the realtor. In Polyzos v. Cotrupi,[542] the Virginia Supreme Court held that expert testimony is unnecessary when the alleged negligent act or omission of a realtor clearly lies within the range of common knowledge and experience of the trier of fact. In Polyzos, the realtor had offered for sale property he had not been authorized to sell and presented to his client a contract that failed to sufficiently reflect an accurate legal description of the property.

C. Action Against Certified Home Inspector or Non-Certified Home Inspector. The General Assembly has adopted a voluntary certification program for home inspectors.[543]  No person may hold himself or herself out as a “certified home inspector” unless he or she has been certified in accordance with section 54.1-500 et seq. of the Virginia Code. Anyone who holds himself or herself out verbally or by sign, advertisement, or letterhead as a “certified home inspector” when he or she is not one, is subject to the provisions of section 54.1-111. The Board for Asbestos, Lead, Mold, and Home Inspectors has the authority to promulgate regulations dealing with, inter alia, the conduct of home inspectors certified by the Board.[544]  Those regulations require certain things to be included in a certified home inspection contract[545] and a certified home inspection report.[546] No cases have been decided demonstrating whether a violation of these regulations can constitute negligence.

D. Property Owners’ Association Act.[547]

1. In General. The Virginia Property Owners’ Association Act (POAA) applies to real estate developments in which there are lots and common areas.[548]  An attorney who reviews real estate contractual documents should examine  the disclosure requirements of the POAA and its attendant remedies. For example, the purchaser has the right to a “disclosure packet” and the right to cancel the contract (i) within three days after receiving either the packet or notice that it will not be available; (ii) within three days after signing the contract if he or she had received the packet or was notified that the disclosure packet is not available; or (iii) within six days after postmark of notice sent by mail that the disclosure packet is not available.[549]  The right to cancel the real estate contract is waived if not exercised before settlement.[550]

2. Association Disclosure Packet. The association is required to provide a copy of the disclosure packet within 14 days of receiving a written request.[551]  The packet must contain sixteen items relating to the rights and responsibilities of the association and the purchaser.[552]  The disclosure packet should include, for example, past and planned expenditures, fees and assessments, budgetary matters, liabilities and pending legal actions, insurance, bonds, owners’ lot restrictions, and association rules and requirements.[553]  The association statements in the disclosure packet are binding on the association.[554]

E. New Home Mechanics’ Lien Disclosure.[555]  All contracts for the purchase of residential real estate are required to provide notice to the purchaser of the possibility of mechanics’ liens.[556]  The owner of a one- or two-unit residence who is also a contractor or developer must provide an affidavit that the contractors have been paid or list them and the amounts payable.[557]

F. New Home Implied Warranties.[558]  In every contract for the sale of a new home, the seller warrants that the dwelling is free from structural defects and constructed in a workmanlike manner. Additionally, if the vendor is a builder, the builder warrants that the dwelling is free from structural defects, constructed in a workmanlike manner, and fit for habitation. These implied warranties may be waived as long as the contract for sale conspicuously states that the property is being sold “AS IS.”[559] The implied warranties continue for one year from the date that title transferred or from the date that possession changed, whichever occurred first. Any cause of action for breach of these warranties must be brought within two years of the breach.

G. Settlement Agent Disclosure. The settlement agent (the person conducting settlement and disbursing the settlement or loan proceeds) is required to disclose the availability of title insurance, including mechanics’ lien insurance.[560]

Real Estate Settlement Procedures Act.[561]

A. In General. The federal Real Estate Settlement Procedures Act (RESPA) was passed to provide consumers with greater and more timely disclosures of the nature and costs of the settlement process.[562]  The Secretary of the United States Department of Housing and Urban Development (HUD) is responsible for enforcing RESPA and the regulations issued thereunder.[563]  RESPA applies to federally-related mortgage loans that are secured by a first or subordinate lien on residential real property. A federally-related mortgage loan includes any loan made by a lender that is (i) regulated or insured, in whole or in part, by an agency of the federal government; (ii) intended to be sold to the Federal National Mortgage Association, the Government National Mortgage Association, or the Federal Home Loan Mortgage Corporation; or (iii) made in whole or in part by a “creditor” under the Consumer Credit Protection Act that makes more than $1,000,000 in residential loans.[564] Enforcement under RESPA is subject to several exemptions, including loans for property of 25 acres or more, for businesses, for temporary financing, and for unimproved property.[565] RESPA contains extensive disclosure requirements.[566]  RESPA requires not only disclosures concerning loan settlements but also disclosures concerning loan servicing and loan servicing transfer procedures.[567]

B. Disclosures. The lender must, within three business days after the application for a loan is received, provide the applicant with a “Special Information Booklet.”[568]  The booklet includes information about the settlement process, real estate settlement costs, the nature and purpose of escrow accounts, the choice of available settlement services, and an explanation of unfair practices under RESPA.[569]  Along with the booklet, the lender must give a good faith estimate of the closing costs.[570]  Within three business days of application for a mortgage servicing loan, the lender or mortgage broker must provide a servicing disclosure statement, identifying whether the servicing of the loan may be transferred and related information.[571]  Moreover, when the mortgage servicing is actually transferred, a notice of transfer must be sent to the borrower no later than 15 days before the effective date of transfer.[572]  This notice of transfer must provide information related to the transfer, including a tollfree number for questions. A 60-day grace period from the date of transfer is also required.[573] This 60-day period is designed as a waiver of late fees if the original mortgage service received the payment.[574]  A completed HUD Uniform Settlement Statement must be provided before or at settlement, unless waived, and must contain all items known to the settlement agent from inspection of the home (one day before settlement).[575]  No fee for this statement is authorized.[576]

C. Damages.[577] Actual damages, costs, and attorney fees are authorized plus, when a pattern of noncompliance exists, an additional amount of not more than $1,000. Class-action damages are similar, except an additional $1,000 is authorized for each class member (not to exceed the lesser of $500,000 or one percent of the net worth of the servicer). A mortgage servicer can avoid this liability before suit by correcting the problem within 60 days of discovery of the error.

Mortgage Lending Contracts.

A. Mortgage Lenders and Brokers.[578]

1. In General. In Virginia, mortgage lenders and brokers must be licensed by the commonwealth.[579]  Comprehensive requirements for mortgage lending include, for example, specific disclosures regarding loan commitments and specific prohibitions regarding mortgage lenders’ and brokers’ practices. There are numerous exempted persons, including, for example, lenders making three or fewer mortgage loans during a 12-month period, insurance companies, and licensed real estate brokers (to the extent they do not receive mortgage brokerage fees).[580]

2. Prohibited Practices.[581] Mortgage lenders and brokers are prohibited from delaying the closing of the loan for the purpose of increasing the interest rate, costs, fees, or charges payable by the borrower.[582] The following practices are also prohibited: (i) obtaining an agreement that leaves blanks to be filled in after execution of the loan documents; (ii) taking interest in collateral other than real estate to secure the loan; (iii) obtaining an exclusive agency agreement from any borrower; (iv) obtaining an acceleration clause for any reason other than failure to make timely payments; and (v) failing to provide settlement statement disclosures under the Truthin-Lending Act and Regulation Z (if acting as a mortgage lender).[583]  Compensation is prohibited under the following circumstances for a mortgage broker required to be licensed under the Virginia Code: (i) before a written commitment is given to the buyer; (ii) from a mortgage lender in which the broker is a principal, stockholder, partner, trustee, director, officer, or employee of the lender; (iii) from a borrower in connection with any mortgage loan transaction in which the broker is affiliated with the lender; (iv) from a borrower other than that specified in the written contract signed by the borrower; and (v) for placing a loan with an affiliated lender.[584]  The State Corporation Commission may suspend or revoke a lender’s license, award fines and penalties up to $2,500, and refer a case to the Attorney General, requesting investigation.[585] Civil recourse by individuals for damages or restitution, costs, and attorney fees is also authorized.[586]

B. Additional Mortgage Lending Requirements.

1. Appraisal Fee. A mortgage lender who charges the borrower for an appraisal must furnish a copy to the borrower free of charge.[587]

2. Assignment of Mortgage. Recording of an assignment of the mortgage is not required, but it may be recorded, and the Virginia Code sets forth a certificate format.[588]

3. Assumption of Mortgage.[589] A borrower under a residential mortgage has the right to request a written disclosure as to whether an assumption of the loan by another borrower will be permitted by the lender. The lender must respond to the request within 10 business days—including the terms of assumption set forth under the statute.[590]

4. Discrimination Prohibited.

a. Virginia Fair Housing Law.[591]  Under the Virginia Fair Housing Law (VFHL), it is unlawful to engage in real estate transactions that discriminate against any person because of race, color, religion, national origin, sex, age, familial status, or handicap.[592]  Additionally, certain restrictive covenants and related reversionary interests purporting to restrict occupancy or ownership of property on a discriminatory basis are void.[593]  The Real Estate Board is authorized to investigate allegations of discrimination in violation of the VFHL, engage in conciliation to the extent feasible, and refer the matter to the Attorney General for civil action.[594]  Private parties may seek civil remedies under the VFHL.[595]

b. Virginia Equal Credit Opportunity Act.[596] The Virginia Equal Credit Opportunity Act (VECOA) prohibits any creditor from discriminating against an applicant on the basis of race, color, religion, national origin, sex, marital status, or age (if the applicant has the capacity to contract), or because any part of the applicant’s income derives from any public assistance program.[597]  The VECOA also requires creditors either to provide applicants in writing the reasons for any adverse actions or to notify applicants of their right to request a statement of reasons within 60 days.[598] Violations of the VECOA can subject creditors to actual damages, punitive damages not in excess of $10,000, court costs and attorney fees, and other declaratory and equitable relief as the court deems appropriate.[599]

5. Due on Sale Clause. Virginia lenders are not prohibited from imposing a “due on sale” clause in a security instrument. For a mortgage or a deed of  trust, disclosure is required either in the margin or in the text, in capital letters or underlined, as follows:

NOTICE—THE DEBT SECURED HEREBY IS SUBJECT TO CALL IN FULL OR THE TERMS THEREOF BEING MODIFIED IN THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY CONVEYED.[600]

Lenders, however, may not receive a prepayment penalty on loans secured by real property composed of one to four residential dwelling units if the prepayment is in response to a due on sale clause.[601]

6. Escrow Accounts. Virginia law requires that the escrow account be maintained separately from the funds of the lender without commingling with other funds of the lender.[602]

7. Loan Fees and Charges. Lenders may charge a loan fee as agreed between the parties.[603] Other charges are authorized for title examination, title insurance, recording charges, taxes, hazard insurance, mortgage guaranty insurance, appraisals, credit reports, surveys, drafting papers, and closing loans.[604]  However, in a loan for a one- to four-family residence, the lender cannot require the services of a particular attorney, surveyor, or insurer but has the right to approve the same, as long as approval is not unreasonably withheld.[605]

8. Fire Insurance.[606] The amount of insurance a lender can require is limited to the replacement value of improvements on the real property as determined by the insurer or by the appraisal obtained by the lender.

9. Private Mortgage Insurance.[607]  Private mortgage insurance may be required by a lender, but the lender is required to return any unused premium to the borrower.

10. Late Charges.[608]  Late charges are limited to five percent of the payment. Moreover, if payment is made within seven days, the charges cannot be collected. Further, any late charges must be set forth in the note or deed of trust. Late charges do not include acceleration charges or attorney fees and costs of collection. To the extent loan documents seek to collect more than the amount authorized by the statute, the terms as to the excess are void, and the debt remains unimpaired. Federal requirements, such as FHA or VA, control in cases of conflict with state requirements.[609]

11. Prepayment. If under $75,000 remains in principal, no more than a one-percent prepayment penalty charge can be made.[610]  No more than a two percent prepayment penalty charge can be made for a loan secured by a mortgage of an occupied (or soon-to-be occupied) home.[611]  In comparison, if the prepayment arises out of a refinancing with the same lender or a subsequent noteholder, or if the loan is accelerated due to default, no prepayment penalty may be imposed.[612]

12. Loan Payoff. The borrower is entitled, once each 12 months, to a written statement of the payoff amount, within 10 business days of the request.[613] Upon payment in full, the noteholder is required to promptly send the canceled loan documents to the borrower. Inadvertent mistake (for example, misplacing a decimal) does not relieve the obligations of the noteholder or the borrower.[614]  A certificate of satisfaction or partial satisfaction must be filed in the clerk’s office within 90 days after notice that final payment in full, or at least 25 percent, has been made.[615]  The noteholder is required to forfeit $500 to the lien obligor if the noteholder does not, within 90 days, file in the clerk’s office the certificate of satisfaction or partial satisfaction.[616]  Moreover, attorney fees and costs for enforcement may be awarded if payment of the $500 to the obligor is not made within 10 business days of demand for payment.[617]

Real Estate Foreclosure.

A. In General. The beneficiary of a deed of trust secured by real property can accelerate payments upon default and require the trustee to sell the property securing the loan.[618]  At least 30 days’ written notice from the trustee to the debtor is required.[619]  Also, newspaper notices of the sale must be published at least 8 days and not more than 30 days before the sale.[620]

B. Consumer Defenses.

1. Equitable Arguments. In defending against a real estate foreclosure, an attorney should examine whether the foreclosure is unfair.[621]  A purchase of property at foreclosure for less than 50 percent of its assessed value may be unconscionable.[622]  Additionally, when a trustee participates in a corporation’s decision about the amount of the corporation’s bid at the foreclosure sale, it is a breach of the trustee’s fiduciary duty and renders the sale voidable.[623] Attorneys arguing equity should consider that the applicant for an injunction is normally required to provide a bond.[624]  Additionally, when a party files for declaratory relief, all of the parties must be brought before the court.[625]

2. Bankruptcy.

a. In General. When a consumer is confronted with foreclosure on his or her home, one source of potential relief is chapter 13 of the United States Bankruptcy Code (chapter 13). Under chapter 13, a debtor may file a plan to pay his or her debts and retain his or her assets.[626]  To be eligible under chapter 13, a debtor must have a regular and stable income.[627]  When a debtor files for chapter 13 relief, an automatic stay of creditors’ actions immediately goes into effect.[628]  Moreover, under chapter 13, the debtor’s plan can modify the rights of all creditors, except those with a mortgage secured by the debtor’s principal residence.[629]  Thus, unsecured creditors’ claims are susceptible to being reduced to a percentage of their claim.[630] A debtor may also avoid a lien, or part of it, under authorized exemptions such as the homestead exemption.[631]  Similarly, there may not be sufficient value in the residence secured by subordinate liens on the property after the rights of the primary lienholder are covered.[632]  Thus, under chapter 13, a debtor can reduce the amounts that he or she will be required to pay for some of the secured debts on the home and for some of the unsecured debts. Attorneys reviewing property subject to the Bankruptcy Code should also consider that home equity loans are arguably not protected by 11 U.S.C. 1322(b)(2) because they do not affect home purchasing.[633] Similarly, secondary home mortgages are often undersecured and, if so, under chapter 13, may not be fully protected as secured liens under 11 U.S.C. 1322(b)(2).[634]  A debtor who proposes a plan in good faith may seek chapter 13 relief, despite having discharged other debts under chapter 7 of the Bankruptcy Code within the previous six years.[635]  Accordingly, a debtor may discharge unsecured debts under chapter 7 and then, “subject to the requirements of good faith and local rules,”[636] seek to prevent foreclosure by proposing a payment plan under chapter 13.

b. Equity of Redemption. Attorneys reviewing the possibility of equity of redemption should also consider the potential for uncertainty. On one hand, property sold under foreclosure is sold in Virginia when the gavel falls, and the debtor cannot thereafter equitably redeem the property by paying the creditor the amount due.[637] On the other hand, the statute of frauds requires a memorandum of sale by the seller to the purchaser, and the transaction may be reviewed for compliance.[638]  Moreover, if the sale was one in which Virginia foreclosure law was not completely complied with, it may be argued that the sale should be avoided under the fraud on the creditors provisions of the Bankruptcy Code.[639]  This argument must be made within two years after filing for bankruptcy.[640]  Additionally, this argument may be resisted by the counterargument that a foreclosure is not the type of “transfer” required under the Bankruptcy Code.[641]

3. Truth-in-Lending Act Rescission. The right to rescission under the Truth-in-Lending Act (TILA) does not apply to “residential mortgage transactions” that finance the acquisition or initial construction of a consumer’s residence[642] and certain other transactions.[643]  However, TILA rescission for other consumer credit secured by the primary dwelling of an obligor is authorized in cases involving, for example, home equity loans.[644]  If the TILA disclosures are not made by the seller, it is not a seller’s defense to a buyer’s rescission that the error was de minimis.[645]  However, the buyer may, under the TILA, waive the disclosures in an emergency.[646]

4. Lis Pendens. When a party has a claim or litigation against real estate that is subject to a foreclosure sale (for example, a pending counterclaim or motion in the underlying case), an attorney for either party may file a memorandum of lis pendens with the clerk of the court where the property is located. A memorandum of lis pendens provides notice to the potential foreclosure purchaser that there is a claim or litigation pending against the real estate.[647]  This memorandum should only be made in good faith for a valid reason under the statute.

5. Servicemembers Civil Relief Act.[648]  The Servicemembers Civil Relief Act prohibits foreclosure against active duty servicemembers who are prejudiced by their active duty in their ability to defend against the foreclosure or in their ability to pay the debt on the property.[649] A servicemember can waive this protection, but the waiver must be obtained after the member begins active duty.[650]

6. Federal Equal Credit Opportunity Act.[651] A violation of the federal Equal Credit Opportunity Act may be argued for damages in defense or counterclaim to an underlying debt but will not likely void the debt.[652]

7. Selected Federal Requirements Regarding Home Mortgages.

a. Housing and Urban Development Act. Within 45 days of an eligible homeowner failing to make a home loan payment, the creditor must send to the debtor a notice of the availability of financial counseling.[653] This requirement applies generally to mortgages, except certain Farmers Home Administration mortgages.[654]

b. Fair Housing Act.[655] The Fair Housing Act prohibits discrimination in the sale or rental of housing.[656]

c. Federal Housing Authority-HUD Insured Mortgages. Before foreclosure, a written delinquency notice (no later than the end of the second month of delinquency) and a face-to-face meeting with the debtor are required.[657] HUD requires that the mortgagee reinstate the mortgage, subject to several exceptions set forth by HUD regulation, if a lump sum payment for arrears, attorney fees, and costs is made.[658]

d. Veterans’ Insured Mortgages. The Department of Veterans Affairs (VA) authorizes notice of default if the debtor fails to pay for a period of two months (or for more than one month on an extended loan or term loan).[659] The creditor must provide notice to the VA within 15 days after the debtor is in default for 60 days.[660] The VA then has several options.[661]

e. Farmers Home Administration. Mortgages by the Farmers Home Administration are subject to several procedural requirements and appeals similar to other federal programs.[662]

This article is not provided for use or reliance by you or any third parties and does not purport to be exhaustive or to render legal advice for your particular situation or any other specific case. It is meant merely to assist you in sharpening the questions you might ask of your legal advisor in your particular case. Please give me a call should you have any questions. (See: Disclaimer)



[1] Prospect Dev. Co. v. Bershader, 258 Va. 75, 85, 515 S.E.2d 291, 297 (1999); Winn v. Aleda Constr. Co., 227 Va. 304, 308, 315 S.E.2d 193, 195 (1984).

[2] See, e.g., Tate v. Colony House Builders, Inc., 257 Va. 78, 84, 508 S.E.2d 597, 600 (1999).

[3] Nationwide Ins. Co. v. Patterson, 229 Va. 627, 629, 331 S.E.2d 490, 492 (1985).

[4] See, e.g., Tate, 257 Va. at 84, 508 S.E.2d at 600.

[5] Packard Norfolk, Inc. v. Miller, 198 Va. 557, 563, 95 S.E.2d 207, 211-12 (1956); see also Spence v. Griffin, 236 Va. 21, 28 n.1, 372 S.E.2d 595, 598 n.1 (1988).

[6] Lumbermen’s Underwriting Alliance v. Dave’s Cabinet, Inc., 258 Va. 377, 520 S.E.2d 362 (1999); Soble v. Herman, 175 Va. 489, 500, 9 S.E.2d 459, 464 (1940).

[7] See ITT Hartford Group, Inc. v. Virginia Fin. Assocs., Inc., 258 Va. 193, 520 S.E.2d 355 (1999).

[8] Soble, 175 Va. at 500, 9 S.E.2d at 464. But see Colonial Ford Truck Sales, Inc. v. Schneider, 228 Va. 671, 677, 325 S.E.2d 91, 94 (1985) (holding that the promise was made knowing that it would be broken and that it therefore induced a consumer to act to the consumer’s detriment, supporting a finding of actual fraud).

[9] Henning v. Kyle, 190 Va. 247, 251-52, 56 S.E.2d 67, 69 (1949).

[10] Nationwide Ins. Co. v. Patterson, 229 Va. 627, 631, 331 S.E.2d 490, 493 (1985).

[11] In re Fravel, 143 B.R. 1001, 1009-10 (Bankr. E.D. Va. 1992); see also Patterson, 229 Va. at 631, 331 S.E.2d at 493.

[12] Reese v. Bates, 94 Va. 321, 330, 26 S.E. 865, 869 (1897).

[13] See McMillion v. Dryvit Sys., Inc., 262 Va. 463, 552 S.E.2d 364 (2001).

[14] Lloyd v. Smith, 150 Va. 132, 145-46, 142 S.E. 363, 366 (1928); see Colonial Ford Truck Sales, Inc. v. Schneider, 228 Va. 671, 677, 325 S.E.2d 91, 94 (1985).

[15] See Filak v. George, 267 Va. 612, 618, 594 S.E.2d 610, 613 (2004); Richmond Metro. Auth. v. McDevitt St. Bovis, Inc., 256 Va. 553, 507 S.E.2d 344 (1998).

[16] Filak, 267 Va. 612 at 618, 594 S.E.2d at 613; McDevitt St. Bovis, Inc., 256 Va. 553, 507 S.E.2d 344.

[17] Colonial Ford Truck Sales, Inc., 228 Va. at 677, 325 S.E.2d at 94 (citing with approval Lloyd, 150 Va. at 145-47, 142 S.E. at 365-66).

[18] Augusta Mut. Ins. Co. v. Mason, 274 Va. 199, 208, 645 S.E.2d 290, 295 (2007) (quoting Filak v. George, 267 Va. 612, 618, 594 S.E.2d 610, 613 (2004)).

[19] Id. at 207-08, 645 S.E.2d at 295 (quoting Oleyar v. Kerr, 217 Va. 88, 90, 225 S.E.2d 398, 399 (1976) (quoting Burks Pleading and Practice 234 at 406 (4th ed. 1952))).

[20] 841 F.2d 531 (4th Cir. 1988).

[21] 228 Va. 671, 325 S.E.2d 91 (1985).

[22] 256 Va. 553, 560, 507 S.E.2d 344, 348 (1998) (quoting Colonial Ford, 228 Va. at 677, 325 S.E.2d at 94).

[23] Murray v. Hadid, 238 Va. 722, 385 S.E.2d 898 (1989).

[24] White Sewing Mach. Co. v. Gilmore Furniture Co., 128 Va. 630, 643-44, 105 S.E. 134, 138 (1920); see also Harris v. Dunham, 203 Va. 760, 767, 127 S.E.2d 65, 70 (1962) (holding that reliance was required but was not justified under the facts).

[25] Harris, 203 Va. at 767, 127 S.E.2d at 70.

[26] See, e.g., Horner v. Ahern, 207 Va. 860, 864, 153 S.E.2d 216, 219 (1967).

[27] Id.; Armentrout v. French, 220 Va. 458, 466-67, 258 S.E.2d 519, 524 (1979).

[28] Spence v. Griffin, 236 Va. 21, 29, 372 S.E.2d 595, 599 (1988).

[29] 7 F. Supp. 2d 954 (N.D. Ohio 1998).

[30] Id. at 963.

[31] Id.

[32] See Bank of Montreal v. Signet Bank, 193 F.3d 818, 830 (4th Cir. 1999) (stating in dicta that “[i]f [plaintiff bank] specifically disclaimed reliance on the very representation now asserted as fraudulent, reliance would be unreasonable”); Moseman v. Van Leer, 263 F.3d 129 (4th Cir. 2001), cert. denied, 534 U.S. 1128 (2002) (holding that there could be no justifiable reliance where each plaintiff signed a release of all claims specifically disclaiming any reliance on representations by any other party to the transaction).

[33] Nationwide Ins. Co. v. Patterson, 229 Va. 627, 629, 331 S.E.2d 490, 492 (1985); Nuckols v. Nuckols, 228 Va. 25, 37, 320 S.E.2d 734, 740 (1984).

[34] Grogan v. Garner, 498 U.S. 279 (1991); In re Fravel, 143 B.R. 1001, 1007 (Bankr. E.D. Va. 1992).

[35] Va. Code 8.01-243(A).

[36] Newman v. Walker, 270 Va. 291, 295-296, 618 S.E.2d 336, 338 (2005) (obstructing by fraudulently concealing identity).

[37] Va. Code 8.01-229(D).

[38] Barry v. Donnelly, 781 F.2d 1040 (4th Cir. 1986) (applying the Virginia equitable estoppel doctrine to toll the statute of limitations); Boykins Narrow Fabric Corp. v. Weldon, Inc., 221 Va. 81, 86, 266 S.E.2d 887, 890 (1980) (concealment can be a grounds for equitable estoppel).

[39] T. v. T., 216 Va. 867, 224 S.E.2d 148 (1976); Hurst v. State Farm Mutual Auto. Ins. Co., Case No. 7:05CV00776, 2007 U.S. Dist. LEXIS 21172 (W.D. Va. Mar. 23, 2007).

[40] Schmidt v. Household Fin. Corp., II, 276 Va. 108, 661 S.E.2d 834 (2008).

[41] Va. Code 55-524(C).

[42] Va. Code 59.1-204.1(A).

[43] 15 U.S.C. 1640(e).

[44] National Mut. Bldg. & Loan Ass’n v. Blair, 98 Va. 490, 495, 36 S.E. 513, 514 (1900).

[45] Prospect Dev. Co. v. Bershader, 258 Va. 75, 91, 515 S.E.2d 291, 300 (1999).

[46] Grymes v. Sanders, 93 U.S. 55, 62 (1876); United States v. Idlewild Pharmacy, Inc., 308 F. Supp. 19, 23 (E.D. Va. 1969); Link Assocs. v. Jefferson Standard Life Ins. Co., 223 Va. 479, 485, 291 S.E.2d 212, 215-216 (1982).

[47] 207 Va. 860, 153 S.E.2d 216 (1967).

[48] Id. at 867, 153 S.E.2d at 221.

[49] 229 Va. 627, 331 S.E.2d 490 (1985).

[50] 258 Va. 75, 91, 515 S.E.2d 291, 300 (1999).

[51] Virginia Model Jury Instructions, Instruction No. 9.080.

[52] Jordan v. Sauve, 219 Va. 448, 452, 247 S.E.2d 739, 741 (1978) (quoting Lee v. Southland Corp., 219 Va. 23, 27, 244 S.E.2d 756, 759 (1978)); see also Peacock Buick, Inc. v. Durkin, 221 Va. 1133, 1136-37, 277 S.E.2d 225, 227 (1981) (conversion action).

[53] Thompson v. Commonwealth, 197 Va. 208, 213, 89 S.E.2d 64, 67-68 (1955).

[54] Bershader, 258 Va. 75, 515 S.E.2d 291; Rambus, Inc. v. Infineon Techs. AG, 164 F. Supp. 2d 743, 778 (E.D. Va. 2001) (Bershader is more properly regarded as a case allowing fees to be awarded to a prevailing party), aff’d in part, rev’d in part, 318 F.3d 1081 (Fed. Cir. 2003).

[55] See Sydnor v. Conseco Fin. Servicing Corp., 252 F.3d 302 (4th Cir. 2001).

[56] Compare McDaniel v. Hodges, 176 Va. 519, 525, 11 S.E.2d 623, 625 (1940) (seller’s position not changed by delay), with C.E. Wright & Co. v. Shackleford, 152 Va. 635, 148 S.E. 807 (1929) (five months was too long to wait).

[57] Compare McDaniel, 176 Va. 519, 11 S.E.2d 623 (holding that delay induced by the defendant’s promises does not support a finding of waiver by the plaintiff), with Dobie v. Sears, Roebuck & Co., 164 Va. 464, 470, 180 S.E. 289, 291 (1935) (holding that, if rescission is inexcusably delayed, it is waived).

[58] Compare Rafferty v. Heath, 115 Va. 195, 199, 78 S.E. 641, 642 (1913) (noting that the inability to return consideration may result in rescission being refused by a court), with Payne v. Simmons, 232 Va. 379, 385, 350 S.E.2d 637, 641 (1986) (holding that rescission without reimbursement is authorized where actual fraud induced the sale of real estate for an inadequate price, and the seller functioned mentally at a preadolescent level).

[59] Branch v. Buckley, 109 Va. 784, 794, 65 S.E. 652, 655 (1909).

[60] Wilson v. Carpenter’s Adm’r, 91 Va. 183, 192, 21 S.E. 243, 246 (1895).

[61] White v. American Nat’l Life Ins. Co., 115 Va. 305, 309-10, 78 S.E. 582, 583 (1913).

[62] Sensenbrenner v. Rust, Orling & Neale, Architects, Inc., 236 Va. 419, 423, 374 S.E.2d 55, 57 (1988).

[63] Acordia of Va. Ins. Agency, Inc. v. Genito Glenn, L.P., 263 Va. 377, 560 S.E.2d 246 (2002).

[64] Virginia Transformer Corp. v. P.D. George Co., 932 F. Supp. 156 (W.D. Va. 1996); Filak v. George, 267 Va. 612, 618, 594 S.E.2d 610, 613 (2004).

[65] East River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858, 872 (1986).

[66] Id. at 872 (citing UCC 2-313 (express warranty), -314 (implied warranty of merchantability), -315 (warranty of fitness for a particular purpose)).

[67] 198 Va. 557, 564-65, 95 S.E.2d 207, 212 (1956).

[68] Id. at 562, 95 S.E.2d at 210.

[69] Va. Code 59.1-196 et seq.

[70] See, e.g., Va. Code 59.1-200.

[71] Va. Code 18.2-245, -246.

[72] 15 U.S.C. 41 et seq.

[73] 15 U.S.C. 45(a)(1).

[74] 16 C.F.R. pt. 433.

[75] See Va. Code 8.3A-302.

[76] Va. Code Ann. 8.3A-106 cmt. 3.

[77] See id.

[78] Va. Code 59.1-196 et seq.

[79] Va. Code 59.1-197.

[80] See, e.g., Va. Code 59.1-200.

[81] Va. Code 59.1-198.

[82] Va. Code 59.1-197.

[83] Va. Code 59.1-198.

[84] Id.

[85] See, e.g., Bourgeois v. Commonwealth, 217 Va. 268, 274, 227 S.E.2d 714, 718 (1976).

[86] Va. Code 59.1-199.

[87] Va. Code 55-217 to -248.

[88] Va. Code 55-248.2 to -248.40.

[89] See West v. Costen, 558 F. Supp. 564, 582 (W.D. Va. 1983) (“permitted by law” is not the same as “not prohibited by law”).

[90] See id.

[91] 15 U.S.C. 1601 et seq.

[92] Compare Valley Acceptance Corp. v. Glasby, 230 Va. 422, 432-35, 337 S.E.2d 291, 297-298 (1985) (holding that the VCPA applies regarding attorney fees and the federal Consumer Credit Protection Act does not apply), with Smith v. United States Credit Corp., 626 F. Supp. 102, 103 (E.D. Va. 1985) (holding that the VCPA does not apply and the federal Consumer Credit Protection Act does apply), aff’d, 801 F.2d 661 (4th Cir. 1986).

[93] E.g., Va. Code 59.1-200.

[94] Id.; Gill v. Rollins Protective Servs. Co., 722 F.2d 55, 58 (4th Cir. 1983).

[95] See, e.g., Va. Code 59.1-200.

[96] See id.

[97] Cf. 16 C.F.R. 444.2(a)(1).

[98] See, e.g., Va. Code 59.1-200.

[99] Nigh v. Koons Buick Pontiac GMC, Inc., 143 F. Supp. 2d 535 (E.D. Va. 2001) (holding that the consumer must prove a false representation of an existing fact, not a mere expression of an opinion), aff’d, 319 F.3d 119 (4th Cir. 2003), rev’d on other grounds and remanded, 543 U.S. 50 (2005); Lambert v. Downtown Garage, Inc., 262 Va. 707, 553 S.E.2d 714 (2001) (holding that merely stating that property is in excellent condition, without more, is clearly opinion which is not actionable); see Va. Code 59.1-200(A)(14).

[100] See Va. Code 59.1-200(A)(14).

[101] See Va. Code 59.1-200.

[102] Va. Code 59.1-207.

[103] See Va. Code 59.1-200.

[104] Va. Code 59.1-294 et seq.

[105] Va. Code 59.1-21.1 et seq.

[106] Va. Code 59.1-207.1 et seq.

[107] Va. Code 59.1-207.17 et seq.

[108] Va. Code 59.1-415 et seq.

[109] Va. Code 59.1-424 et seq.

[110] Va. Code 59.1-207.34 et seq.

[111] Va. Code 59.1-429 et seq.

[112] Va. Code 59.1-435 et seq.

[113] Va. Code 59.1-311 et seq.

[114] Va. Code 59.1-207.40 et seq.

[115] Va. Code 59.1-445 et seq.

[116] Va. Code 54.1-1505.

[117] Va. Code 3.2-5627.

[118] Va. Code 46.2-1231, -1233.1.

[119] Va. Code 54.1-4000 et seq.

[120] Va. Code 3.2-6512, -6513, -6516.

[121] Va. Code 58.1-1031 et seq.

[122] Va. Code 59.1-200(A)(35).

[123] Va. Code 6.2-1800 et seq.

[124] Va. Code 8.01-40.2.

[125] Va. Code 32.1-212 et seq.

[126] Va. Code 59.1-441.1 et seq.

[127] Va. Code 6.2-2000 et seq.

[128] Va. Code 59.1-525 et seq. This act does not create a private cause of action. Va. Code 59.1-529.

[129] Va. Code 59.1-530 et seq.

[130] Va. Code 59.1-443.2.

[131] Va. Code 59.1-533 et seq. This act does not create a private cause of action. Va. Code 59.1-537.

[132] Va. Code 6.2-2500 et seq.

[133] Va. Code 54.1-1115(B)(i).

[134] Va. Code 18.2-239.

[135] Va. Code 59.1-336 et seq.

[136] Va. Code 59.1-200(A)(49).

[137] Va. Code 59.1-518.1 et seq.

[138] Va. Code 6.2-2200 et seq.

[139] Va. Code 8.2-317.1.

[140] Va. Code 59.1-201, -203, -205, -206.

[141] Va. Code 59.1-203(B); see also Va. Code 59.1-202(A) (statements of assurance and statements in settlement negotiations are not admissions of guilt).

[142] Va. Code 59.1-201.

[143] Va. Code 59.1-201(A), (B)(2).

[144] In re American Dollar Exch., Inc., 27 Va. Cir. 428, 428-29 (Campbell 1992).

[145] Va. Code 59.1-206(A).

[146] Va. Code 59.1-206(C).

[147] 260 Va. 22, 530 S.E.2d 142 (2000).

[148] Va. Code 59.1-204. A person is a natural person, corporation, trust, partnership, association, or other legal entity. Va. Code 59.1-198.

[149] Gill v. Rollins Protective Servs. Co., 722 F.2d 55, 58 (4th Cir. 1983).

[150] Va. Code 59.1-207; see Gill v. Rollins Protective Servs. Co., 836 F.2d 194, 197 (4th Cir. 1987) (noting that this section exculpates a supplier if a misrepresentation was made despite the supplier’s best efforts to prevent it).

[151] This rationale is similar to the federal Truth-in-Lending Act. See 15 U.S.C. 1640(c).

[152] Va. Code 59.1-204.1.

[153] Id.

[154] 228 F.3d 541 (4th Cir. 2000).

[155] 224 F.3d 332 (4th Cir. 2000).

[156] City of Chesapeake v. Cunningham, 268 Va. 624, 604 S.E.2d 420 (2004).

[157] Va. Code 59.1-198.

[158] Va. Code 59.1-204(C).

[159] Id.

[160] Va. Code 59.1-204(A).

[161] Va. Code 59.1-204(D).

[162] 266 Va. 558, 587 S.E.2d 581 (2003); Lee v. Mulford, 269 Va. 562, 611 S.E.2d 349 (2005) (even though promissory note provided for attorney fees, when counsel for the plaintiff failed to present evidence to the jury as to the amount of attorney fees, the court did not abuse its discretion in denying plaintiff’s postverdict motion for attorney fees).

[163] Va. Code 59.1-21.1 et seq.; cf. 16 C.F.R. 429 (rule concerning cooling-off period for sales made at homes or at certain other locations).

[164] Va. Code 59.1-21.2(A).

[165] Va. Code 59.1-21.2(B).

[166] Va. Code 59.1-21.4.

[167] Va. Code 59.1-21.7.

[168] Va. Code 59.1-21.3.

[169] Va. Code 59.1-21.3(5).

[170] Va. Code 59.1-21.3(6).

[171] Va. Code 59.1-21.5.

[172] Id.

[173] Va. Code 59.1-21.6.

[174] Va. Code 59.1-21.7:1.

[175] See supra & 10.302.

[176] See, e.g., 15 U.S.C. 1601 et seq.; see Stone v. Mehlberg, 728 F. Supp. 1341 (W.D. Mich. 1989) (rescission right).

[177] See Cole v. Lovett, 672 F. Supp. 947, 956 (S.D. Miss. 1987), aff’d without opinion, 833 F.2d 1008 (5th Cir. 1987).

[178] Va. Code 59.1-415 et seq.

[179] Va. Code 59.1-416.

[180] Va. Code 59.1-418.

[181] Va. Code 59.1-419.

[182] Va. Code 59.1-423.

[183] Va. Code 59.1-417.

[184] See In re Fravel, 143 B.R. 1001 (Bankr. E.D. Va. 1992).

[185] Va. Code 59.1-421.

[186] Va. Code 59.1-422.

[187] Va. Code 59.1-311 et seq.

[188] Va. Code 59.1-326, -328.

[189] Va. Code 59.1-330.1.

[190] Va. Code 59.1-317.

[191] Va. Code 59.1-335.

[192] Id.; see Va. Code 59.1-200.

[193] Va. Code 59.1-445 et seq.

[194] Va. Code 59.1-445.

[195] Id.

[196] Va. Code 59.1-453.

[197] Id.

[198] Va. Code 59.1-448.

[199] Va. Code 59.1-448.1.

[200] Va. Code 59.1-449.

[201] Va. Code 59.1-454.

[202] Va. Code 59.1-207.17 et seq.

[203] Va. Code 59.1-207.20, -207.21.

[204] See Va. Code 59.1-207.17 et seq.

[205] Va. Code 59.1-207.20.

[206] Va. Code 59.1-207.21.

[207] Va. Code 59.1-207.23.

[208] Va. Code 59.1-207.19(A).

[209] See Va. Code 59.1-21 et seq.

[210] See Va. Code 6.2-311.

[211] See Va. Code 8.1A-203.

[212] Va. Code 59.1-207.19(B).

[213] Va. Code 59.1-207.27.

[214] Va. Code 59.1-207.40 et seq.

[215] Va. Code 59.1-207.41.

[216] Va. Code 59.1-207.42.

[217] Va. Code 59.1-207.44.

[218] 49 U.S.C. 32701 et seq.

[219] Id.; see also 49 C.F.R. pt. 580.

[220] 49 U.S.C. 32703.

[221] 49 U.S.C. 32704.

[222] 49 U.S.C. 32705; see, e.g., Oettinger v. Lakeview Motors, Inc., 675 F. Supp. 1488 (E.D. Va. 1988).

[223] 49 U.S.C. 32709.

[224] 49 U.S.C. 32709.

[225] 49 U.S.C. 32709(b).

[226] 49 U.S.C. 32709(d). But see Fed. R. Civ. P. 9(b) (requirement to plead matters of fraud with particularity); Robinette v. Griffith, 483 F. Supp. 28, 31 (W.D. Va. 1979) (holding that pleading without allegations of any of the elements of fraud is contrary to Fed. R. Civ. P. 9(b)).

[227] 49 U.S.C. 32710.

[228] 49 U.S.C. 32710(b).

[229] Id.

[230] 143 F. Supp. 2d 563 (E.D. Va. 2001), aff’d, 319 F.3d 119 (4th Cir. 2003), rev’d on other grounds and remanded, 543

U.S. 50 (2004).

[231] Va. Code 59.1-207.1 et seq.

[232] Va. Code 59.1-207.3.

[233] Id.

[234] Id.

[235] Va. Code 59.1-207.4.

[236] Va. Code 59.1-207.5.

[237] Va. Code 59.1-207.6.

[238] Va. Code 59.1-207.9 et seq.

[239] See Va. Code 59.1-207.10; Subaru of Am., Inc. v. Peters, 256 Va. 43, 500 S.E.2d 803 (1998) (holding that the Virginia Motor Vehicle Warranty Enforcement Act applies to new and used vehicles sold to consumers); cf. 15 U.S.C. 2304 (Magnuson-Moss Warranty Act requirement for warranty repairs without charge).

[240] Va. Code 59.1-207.11. But see Va. Code 59.1-207.13(C) (extending the lemon law rights period for repairs).

[241] Va. Code 59.1-207.13(B).

[242] Va. Code 59.1-207.15.

[243] Va. Code 59.1-207.16.

[244] Va. Code 59.1-207.13(A).

[245] Va. Code 46.2-1500 et seq.; Hodges v. Koons Buick Pontiac GMC, Inc., 180 F. Supp. 2d 786 (E.D. Va. 2001).

[246] 15 U.S.C. 2301 et seq.

[247] 15 U.S.C. 2310.

[248] 15 U.S.C. 2310(d)(3).

[249] 164 F. Supp. 2d 778 (E.D. Va. 2001).

[250] Collins v. Computertraining.com, Inc., 376 F. Supp. 2d 599, 602 (E.D. Va. 2005).

[251] 249 F. Supp. 2d 737 (E.D. Va. 2003).

[252] 190 F. Supp. 2d 827 (E.D. Va. 2002).

[253] 115 F. Supp. 2d 668 (E.D. Va. 2000).

[254] 266 Va. 544, 587 S.E.2d 521 (2003).

[255] 62 Va. Cir. 23 (Fairfax 2003).

[256] Va. Code 59.1-207.28 et seq.

[257] Va. Code 59.1-207.29.

[258] Va. Code 59.1-207.32.

[259] Va. Code 59.1-207.31.

[260] Va. Code 59.1-207.33.

[261] 15 U.S.C. 1601 et seq.; see also 12 C.F.R. pt. 226 (Regulation Z).

[262] 12 C.F.R. 226.1(c)(1).

[263] 12 C.F.R. 226.5.

[264] 15 U.S.C. 1615.

[265] 15 U.S.C. 1640(a).

[266] 15 U.S.C. 1640(b).

[267] 15 U.S.C. 1640(f).

[268] 15 U.S.C. 1640(e).

[269] 15 U.S.C. 1635(f).

[270] 15 U.S.C. 1635(g).

[271] 15 U.S.C. 1640(e).

[272] 143 F. Supp. 2d 535 (E.D. Va. 2001).

[273] 319 F.3d 119 (4th Cir. 2003).

[274] 12 C.F.R. 226.2.

[275] Koons Buick Pontiac GMC, Inc. v. Nigh, 543 U.S. 50 (2004).

[276] Nigh v. Koons Buick Pontiac GMC, Inc., 384 F. Supp. 2d 915 (E.D. Va. 2005).

[277] Nigh v. Koons Buick Pontiac GMC, Inc., 478 F.3d 183 (4th Cir. 2007).

[278] 243 F. Supp. 2d 559 (E.D. Va. 2003).

[279] Barnes, 243 F. Supp. 2d at 563 (quoting Supermarket of Marlington Inc. v. Meadow Gold Dairies, Inc., 71 F.3d 119, 122 (4th Cir. 1995)).

[280] 251 F. Supp. 2d 1277, 1278 (E.D. Va. 2003).

[281] 244 F. Supp. 2d 618 (E.D. Va. 2003).

[282] See 12 C.F.R. 226 app. J(b)(2).

[283] 728 F.2d 64, 67 n.3 (2d Cir. 1984).

[284] See Rucker v. Sheehy Alexandria, Inc., 255 F. Supp. 2d 562, 567-68 (E.D. Va. 2003). But see Koons Buick Pontiac GMC, Inc. v. Nigh, 543 U.S. 50 (2004) (as to damages).

[285] Rucker, 255 F. Supp. 2d at 564.

[286] Id.

[287] 15 U.S.C. 1640(a).

[288] 15 U.S.C. 1641.

[289] 15 U.S.C. 1635, 1641(c).

[290] See, e.g., 15 U.S.C. 1635(g).

[291] 15 U.S.C. 1635(a).

[292] 15 U.S.C. 1611.

[293] 531 U.S. 79 (2000).

[294] 252 F.3d 302 (4th Cir. 2001); see also Koridze v. Fannie Mae Corp., 593 F. Supp. 2d 863 (E.D. Va. 2009).

[295] 173 F.3d 933 (4th Cir. 1999).

[296] 388 U.S. 395 (1967).

[297] 167 F. Supp. 2d 892 (W.D. Va. 2001).

[298] 15 U.S.C. 1666 et seq.

[299] 15 U.S.C. 1666(a).

[300] Id.

[301] 15 U.S.C. 1666(c).

[302] 15 U.S.C. 1666(d).

[303] 15 U.S.C. 1666h.

[304] 15 U.S.C. 1666a(b).

[305] 15 U.S.C. 1666i.

[306] 15 U.S.C. 1666i(b).

[307] 15 U.S.C. 1666i(a).

[308] Id.

[309] See Izraelewitz v. Manufacturers Hanover Trust Co., 465 N.Y.S.2d 486 (N.Y. Civ. Ct. 1983).

[310] Va. Code 6.2-430.

[311] 15 U.S.C. 1667 et seq.

[312] 15 U.S.C. 1667(1). But see, e.g., Dodson v. Remco Enters., Inc., 504 F. Supp. 540, 543 (E.D. Va. 1980) (holding that a contract that could be canceled at the end of the month was not a consumer lease under the CLA).

[313] 15 U.S.C. 1667c.

[314] 15 U.S.C. 1667b.

[315] 15 U.S.C. 1667d; see 15 U.S.C. 1640.

[316] 280 F. Supp. 2d 517 (E.D. Va. 2003).

[317] 15 U.S.C. 1667d(c).

[318] Va. Code 59.1-207.17 et seq. The Virginia Lease-Purchase Agreement Act is discussed in paragraph 10.303(D)(5) of this chapter.

[319] 15 U.S.C. 1681 et seq.

[320] 15 U.S.C. 1681e(a).

[321] 15 U.S.C. 1681b; see, e.g., Yohay v. City of Alexandria Employees Credit Union, Inc., 827 F.2d 967 (4th Cir. 1987) (finding that the credit report was obtained for an improper purpose).

[322] 15 U.S.C. 1681b.

[323] 15 U.S.C. 1681c(a).

[324] 15 U.S.C. 1681c(b).

[325] 15 U.S.C. 1681g.

[326] 15 U.S.C. 1681g(a)(3)(A).

[327] 15 U.S.C. 1681g(c).

[328] 15 U.S.C. 1681j. There is a central website for the three bureaus that makes ordering a credit report easy: www.annualcreditreport.com. There is also a toll-free number: 877-322-8228.

[329] 15 U.S.C. 1681i.

[330] 15 U.S.C. 1681o. But see Tinsley v. TRW Inc., 879 F. Supp. 550 (D. Md.) (finding that the consumer’s failure to provide information regarding the alleged error broke the chain of causation for negligence), aff’d, 64 F.3d 659 (4th Cir. 1995) (unpublished), cert. denied, 516 U.S. 1047 (1996).

[331] 15 U.S.C. 1681n.

[332] 257 F.3d 409 (4th Cir. 2001).

[333] 357 F.3d 426 (4th Cir. 2004).

[334] 15 U.S.C. 1681s-2(b)(1).

[335] Johnson, 357 F.3d at 429 (Experian: “CONSUMER STATES BELONGS TO HUSBAND ONLY”; TransUnion: “WAS

NEVER A SIGNER ON ACCOUNT. WAS AN AUTHORIZED USER”).

[336] Id.

[337] Id.

[338] See 15 U.S.C. 1681s-2(b)(1).

[339] Johnson, 357 F.3d at 429.

[340] Johnson, 357 F.3d at 433.

[341] 15 U.S.C. 1681p.

[342] 15 U.S.C. 1691 et seq.; see also 12 C.F.R. pt. 202 (Regulation B).

[343] 15 U.S.C. 1691 et seq.

[344] See generally 15 U.S.C. 1691.

[345] 15 U.S.C. 1691e; see Anderson v. United Fin. Co., 666 F.2d 1274 (9th Cir. 1982) (holding that punitive damages are limited to $10,000 except in class actions).

[346] 15 U.S.C. 1691e(f).

[347] Compare Ford City Bank v. Goldman, 424 N.E.2d 761 (Ill. App. Ct. 1981) (holding that a consumer counterclaim under the ECOA was barred), with CMF Va. Land, L.P. v. Brinson, 806 F. Supp. 90 (E.D. Va. 1992) (holding that a counterclaim under the ECOA was not barred).

[348] 117 F. Supp. 2d 500 (E.D. Va. 2000).

[349] 15 U.S.C. 1691 et seq.

[350] Current version at Va. Code 6.2-500 et seq. (2010).

[351] Va. Code 6.2-500 et seq.

[352] 15 U.S.C. 1691 et seq.; see also 12 C.F.R. pt. 202 (Regulation B).

[353] Va. Code 6.2-501.

[354] Va. Code 6.2-510

[355] Va. Code 6.2-505.

[356] Va. Code 6.2-504.

[357] Id.

[358] Va. Code 6.2-505(E).

[359] Va. Code 59.1-335.1 et seq.

[360] Va. Code 59.1-355.2

[361] Va. Code 59.1-335.3, -335.4.

[362] Va. Code 59.1-335.5 to -335.8.

[363] Va. Code 59.1-335.5.

[364] Id.

[365] Va. Code 59.1-335.6.

[366] Va. Code 59.1-335.7.

[367] Va. Code 59.1-335.9.

[368] Va. Code 59.1-335.8.

[369] Va. Code 59.1-335.9.

[370] Id.

[371] Va. Code 59.1-335.12.

[372] Va. Code 59.1-335.10.

[373] Id.

[374] Va. Code 59.1-335.11.

[375] Va. Code 55-210.8:1.

[376] Va. Code 55-210.10:2 to -210.24:2.

[377] Va. Code 55-210.8:1.

[378] Va. Code 54.1-1120.

[379] Id.

[380] Id.

[381] Id.

[382] Va. Code 54.1-1123.

[383] Id.

[384] Va. Code 54.1-1120.

[385] Va. Code 46.2-1527.3.

[386] Va. Code 46.2-1527.4.

[387] Va. Code 46.2-1527.3.

[388] Id.

[389] Va. Code 54.1-2114.

[390] See id.

[391] Id.

[392] Va. Code 54.1-2116.

[393] Id.

[394] Id.

[395] Va. Code 54.1-2114.

[396] Va. Code 54.1-2116.

[397] Va. Code 36-85.32.

[398] Id.

[399] Id.

[400] Id.

[401] Id.

[402] Id.

[403] Va. Code 36-85.23.

[404] Va. Code 36-85.16.

[405] See Va. Code 18.2-239, -240.

[406] Va. Code 18.2-239.

[407] Id.

[408] See, e.g., Bell v. Commonwealth, 236 Va. 298, 302, 374 S.E.2d 13, 16 (1988).

[409] Id. at 303-04, 374 S.E.2d at 16.

[410] Love v. Durastill of Richmond, Inc., 242 Va. 186, 408 S.E.2d 892 (1991).

[411] Thaxton v. Commonwealth, 211 Va. 38, 175 S.E.2d 264 (1970).

[412] Va. Code 18.2-239.

[413] See Bell, 236 Va. at 301 n.2, 374 S.E.2d at 15 n.2.

[414] See Va. Code 18.2-242.1.

[415] Id.

[416] Id.

[417] Va. Code 59.1-196 et seq.

[418] Va. Code 59.1-198.

[419] See Va. Code 18.2-239, -240.

[420] See Va. Code 18.2-242.1.

[421] Va. Code 59.1-262 et seq.

[422] Va. Code 59.1-263.

[423] Va. Code 59.1-264.

[424] See Va. Code 59.1-263.

[425] Va. Code 59.1-268.

[426] Id.

[427] Id.

[428] Va. Code 11-2.2.

[429] See, e.g., Packard Norfolk, Inc. v. Miller, 198 Va. 557, 95 S.E.2d 207 (1956) (holding that oral misrepresentations to

induce a contract void the contract).

[430] George Robberecht Seafood, Inc. v. Maitland Bros. Co., 220 Va. 109, 112, 255 S.E.2d 682, 683 (1979).

[431] Va. Code 11-4; cf. Armco, Inc. v. New Horizon Dev. Co., 229 Va. 561, 331 S.E.2d 456 (1985) (applying Va. Code 8.2-316(2), requiring conspicuous notice (larger type or capitals under Va. Code 8.1A-201(b)(10)), rather than the requirement for pica type under Va. Code 11-4).

[432] See Armco, Inc., 229 Va. 561, 331 S.E.2d 456.

[433] See, e.g., Va. Code 59.1-68.3, -68.5.

[434] Va. Code 18.2-214, -214.1, -215.

[435] Va. Code 59.1-200.

[436] Va. Code 18.2-216.

[437] Va. Code 59.1-200.

[438] See Henry v. R.K. Chevrolet, Inc., 219 Va. 1011, 254 S.E.2d 66 (1979) (holding that the statute does not apply to an

oral misrepresentation).

[439] See, e.g., Va. Code 59.1-200.

[440] 262 Va. 432, 551 S.E.2d 615 (2001).

[441] 15 U.S.C. 1692 et seq.; see West v. Costen, 558 F. Supp. 564 (W.D. Va. 1983).

[442] See 15 U.S.C. 1692(a).

[443] Id.

[444] 15 U.S.C. 1692i(a).

[445] See 15 U.S.C. 1692k(d); see also Newsom v. Friedman, 76 F.3d 813, 817 (7th Cir. 1996).

[446] 15 U.S.C. 1692e(2).

[447] 15 U.S.C. 1692e(14).

[448] 15 U.S.C. 1692e(11).

[449] 15 U.S.C. 1692g; see, e.g., United States v. National Fin. Servs., Inc., 98 F.3d 131 (4th Cir. 1996) (holding that an overshadowing or contradicting notice violates the FDCPA).

[450] 15 U.S.C. 1692c(a)(2); see Dikun v. Streich, 369 F. Supp. 2d 781, 788-89 (E.D. Va. 2005).

[451] 15 U.S.C. 1692g(b).

[452] 15 U.S.C. 1692e; see Dikun, supra (affidavit for attorney fees sent by debt collector to consumer alleged to be false in

violation of 15 U.S.C. 1692e(2)(B)).

[453] Heintz v. Jenkins, 514 U.S. 291 (1995). Accord Scott v. Jones, 964 F.2d 314 (4th Cir. 1992) (finding an attorney to be a debt collector); Carroll v. Wolpoff & Abramson, 961 F.2d 459 (4th Cir.) (holding that the necessary disclosures under the FDCPA must be included in all communications to debtors), cert. denied, 506 U.S. 905 (1992). But see Nance v. Petty, Livingston, Dawson, & Devening, 881 F. Supp. 223 (W.D. Va. 1994) (dismissing the case where collection work was only 0.61 percent of the attorney’s work and 1.07 percent of his firm’s work, indicating that the attorney was not a debt collector).

[454] Dorsey v. Morgan, 760 F. Supp. 509 (D. Md. 1991).

[455] Virginia LEO No. 1676.

[456] 15 U.S.C. 1692e.

[457] See, e.g., Creighton v. Emporia Credit Serv., Inc., 981 F. Supp. 411 (E.D. Va. 1997).

[458] 15 U.S.C. 1692f.

[459] 15 U.S.C. 1692k.

[460] Va. Code 8.1A-201(b)(35).

[461] See, e.g., Va. Code 8.01-66.2 (medical and ambulance services), 8.01-66.3 (attorney fees have priority over medical services fees), 43-29 (advances to tenants and laborers), 43-32 (liveries, garages, and marinas), 54.1-3932 (attorney fees), 62.1-44.34:20(H) (tank vessel cleanup of oil spills). A statutory lien is generally not consensual and is not governed by Article 9 of the UCC, except as to priority. See Va. Code 8.9A-109(d)(2).

[462] See Va. Code 8.9A-203; see, e.g., Grossmann v. Saunders, 237 Va. 113, 376 S.E.2d 66 (1989).

[463] Va. Code 8.9A-203, -108; see, e.g., Girard Trust Co. v. Strickler (In re Varney Wood Prods., Inc.), 458 F.2d 435 (4th

Cir. 1972).

[464] Va. Code 8.9A-204.1.

[465] Va. Code 6.2-1527.

[466] Va. Code 6.2-1528.

[467] See Va. Code 8.9A-203; see, e.g., Kane v. Thorpe Consumer Discount Co. (In re Kane), 20 B.R. 700, 704 (Bankr. D.S.C. 1982); Dane County Farmco Coop. v. Paskin (In re Hein), No. 75-232, 1976 WL 23703, 20 U.C.C. Rep. Serv. 745, 749 (Bankr. W.D. Wis. Apr. 6, 1976).

[468] Va. Code 8.9A-203(b)(2); Northwestern Bank v. First Va. Bank, 585 F. Supp. 425 (W.D. Va. 1984).

[469] See, e.g., Va. Code 8.9A-108; 15 U.S.C. 1638(a)(9) (Truth-in-Lending Act).

[470] See Va. Code 8.2-302.

[471] See generally Va. Code 8.9A-203, -204; Varner v. Century Fin. Co., 738 F.2d 1143 (11th Cir. 1984).

[472] See Va. Code 8.9A-204.1.

[473] Va. Code 8.9A-204.

[474] See Va. Code 8.9A-204.1.

[475] See Va. Code 8.9A-203; In re Dykes, No. BK-2-76-101,-102, 1976 WL 23642, 20 U.C.C. Rep. Serv. 524 (Bankr. E.D.

Tenn. July 20, 1976).

[476] See Air Transp. Leasing v. Belize Airways Ltd. (In re Belize Airways Ltd.), 7 B.R. 604 (Bankr. S.D. Fla. 1980).

[477] See generally Va. Code 8.1A-201(b)(35), -203.

[478] See generally Va. Code 8.1A-303.

[479] Pierce v. Leasing Int’l, Inc., 235 S.E.2d 752, 754 (Ga. Ct. App. 1977).

[480] See Smith v. General Fin. Corp., 255 S.E.2d 14 (Ga. 1979); see also Warren v. Ford Motor Credit Co., 693 F.2d 1373, 1380 (11th Cir. 1982).

[481] See Va. Code 6.2-401.

[482] Va. Code 11-4.3; see Fox v. Heilig-Meyers Co., 681 F.2d 212 (4th Cir. 1982).

[483] See Va. Code 8.9A-625; see also In re Levine’s Boys’ & Men’s Shop, Inc., 1974 WL 21759, 14 U.C.C. Rep. Serv. (CBC) 254 (E.D.N.Y. Jan. 7, 1974).

[484] Va. Code 8.01-114, -123.

[485] See id.; see also J.I. Case Co. v. United Va. Bank, 232 Va. 210, 349 S.E.2d 120 (1986).

[486] See Booker v. City of Atlanta, 776 F.2d 272 (11th Cir. 1985).

[487] See Va. Code 8.9A-609, -610; see also McDuffy v. Worthmore Furniture, Inc., 380 F. Supp. 257, 262 (E.D. Va. 1974).

[488] See Va. Code 8.9A-609; cf. Greene v. First Nat’l Exch. Bank, 348 F. Supp. 672 (W.D. Va. 1972); Commonwealth v. Alexander, 260 Va. 238, 531 S.E.2d 567 (2000).

[489] See Va. Code 8.9A-625, -627.

[490] See Thompson v. Ford Motor Credit Co., 324 F. Supp. 108 (D.S.C. 1971).

[491] Wallace v. Chrysler Credit Corp., 743 F. Supp. 1228, 1232-33 (W.D. Va. 1990).

[492] Id. at 1233.

[493] See Childers v. Judson Mills Store Co., 200 S.E. 770, 775 (S.C. 1939).

[494] Wallace, 743 F. Supp. at 1234.

[495] See, e.g., Kelley v. General Motors Acceptance Corp., 244 S.E.2d 911, 913 (Ga. Ct. App. 1978).

[496] See, e.g., Rogers v. Allis-Chalmers Credit Corp., 679 F.2d 138, 142 (8th Cir. 1982) (absence of authority).

[497] See Va. Code 18.2-115, -118. These prohibitions apply where the debtor appropriates the collateral to his or her own use. See, e.g., Gregory v. Commonwealth, 5 Va. App. 89, 92, 360 S.E.2d 858, 860 (1987), aff’d, 237 Va. 354, 377 S.E.2d 405, cert. denied, 493 U.S. 845 (1989).

[498] Va. Code 8.9A-620.

[499] See Va. Code 8.9A-610, -615, -617, -618, -620, -624; see also In re Copeland, 531 F.2d 1195, 1207 (3d Cir. 1976).

[500] See Va. Code 8.9A-623, -624; see also Broad Street Auto Sales, Inc. v. Baxter, 230 Va. 1, 334 S.E.2d 293 (1985).

[501] See Va. Code 8.9A-625, -627.

[502] See, e.g., In re Myers, No. 76-15, 1976 WL 23659, 20 U.C.C. Rep. Serv. (CBC) 1420 (Bankr. W.D. Va. Nov. 30, 1976) (holding that a 14-month delay for sale of farming equipment was reasonable).

[503] Va. Code 8.9A-620.

[504] See Va. Code 8.9A-625, -627.

[505] See Va. Code 8.9A-610, -611, -615, -617, -618, -624; cf. Rhoten v. United Va. Bank, 221 Va. 222, 269 S.E.2d 781 (1980).

[506] Va. Code 8.3A-604.

[507] Va. Code 8.3A-605; Lee Federal Credit Union v. Gussie, 542 F.2d 887, 890 (4th Cir. 1976).

[508] Va. Code 8.3A-605.

[509] Va. Code 8.9A-610; In re Bishop, 482 F.2d 381, 384-85 (4th Cir. 1973).

[510] Va. Code 8.9A-610.

[511] Id.

[512] Va. Code 8.9A-627; In re Thomas, No. 70-BK-120-R, 1973 WL 21424, 12 U.C.C. Rep. Serv. (CBC) 578 (W.D. Va. Mar. 27, 1973).

[513] Va. Code 8.9A-618; cf. Rhoten v. United Va. Bank, 221 Va. 222, 269 S.E.2d 781 (1980).

[514] Va. Code 8.9A-627.

[515] See, e.g., Va. Code 8.9A-615.

[516] See Va. Code 6.2-401 (acceleration is treated as a voluntary prepayment for purposes of rebates owed the debtor).

[517] Va. Code 6.2-404; 15 U.S.C. 1615.

[518] Cf. 15 U.S.C. 1615; see Va. Code 6.2-401, 6.2-403, 6.2-404, 6.2-417, 6.2-420.

[519] Va. Code 6.2-400.

[520] Va. Code 8.9A-610, -611, -615, -617, -618, -624.

[521] Id.; see Va. Code 6.2-400; see also Coady v. Strategic Resources, Inc., 258 Va. 12, 515 S.E.2d 273 (1999); Mullins v.

Richlands Nat’l Bank, 241 Va. 447, 449, 403 S.E.2d 334, 335 (1991).

[522] Va. Code 8.9A-610, -611, -615, -617, -618, -624.

[523] E.g. Va. Code 8.9A-610, -611, -615, -617, -618, -624; cf. Va. Code 8.01-121.

[524] See In re Bishop, 482 F.2d 381 (4th Cir. 1973).

[525] Va. Code 8.9A-625, -627.

[526] Va. Code 55-248.2 to -248.40.

[527] Isbell v. Commercial Inv. Assocs., Inc., 273 Va. 605, 615, 644 S.E.2d 72, 76-77 (2007); Caudill v. Gibson Fuel Co., 185 Va. 233, 240-241, 38 S.E.2d 465, 469 (1946).

[528] See Isbell, 273 Va. 605, 644 S.E.2d 72.

[529] Id.; Paytan v. Roland, 208 Va. 24, 26, 155 S.E.2d 36, 37 (1967).

[530] Isbell, 273 Va. at 616, 644 S.E.2d at 77.

[531] Sales v. Kecoughtan Hous. Co., 279 Va. 475, 690 S.E.2d 91 (2010); Holland v. Shively, 243 Va. 308, 311, 415 S.E.2d 222, 224 (1992).

[532] Va. Code 55-517 to -525.

[533] Va. Code 55-517.

[534] See Va. Code 55-519, -519.1, -520.

[535] Va. Code 55-520.

[536] Va. Code 36-97 et seq.

[537] Va. Code 55-519.

[538] Va. Code 55-520(B).

[539] Va. Code 55-518.

[540] Id.

[541] Va. Code 55-523.

[542] 264 Va. 116, 563 S.E.2d 775 (2002).

[543] Va. Code 54.1-517.1.

[544] Va. Code 54.1-201, -501(7).

[545] 18 VAC 15-40-120.

[546] 18 VAC 15-40-130.

[547] Va. Code 55-508 et seq.

[548] See Va. Code 55-508.

[549] Va. Code 55-509.4.

[550] Id.

[551] Va. Code 55-509.5.

[552] Id.

[553] Id.

[554] Id.; cf. the Virginia Condominium Act (Va. Code 55-79.39 et seq.), a comprehensive statute covering the creation, alteration, management, sale, and resale of condominiums in Virginia.

[555] Va. Code 11-2.4.

[556] Id.

[557] Va. Code 43-13.2.

[558] Va. Code 55-70.1.

[559] Id.; cf. Va. Code 8.1A-201(b)(10) (requirements for “conspicuous”).

[560] Va. Code 38.2-4616.

[561] 12 U.S.C. 2601 et seq.; see also Va. Code 55-525.16 to -525.32 (requiring settlement agents to “exercise reasonable care and comply with all applicable requirements of this chapter and its licensing authority regarding licensing, financial responsibility, errors and omissions or malpractice insurance policies, fidelity bonds, employee dishonesty insurance policies, audits, escrow account analyses and record retention” Va. Code 55-525.20(A)). For a discussion of real estate contracts generally, see paragraph 10.9 of this chapter.

[562] See 12 U.S.C. 2601(a).

[563] See 24 C.F.R. 3500.1 et seq. (Regulation X).

[564] 12 U.S.C. 2602.

[565] See 24 C.F.R. 3500.5.

[566] See, e.g., 12 U.S.C. 2604, 2605.

[567] Id.

[568] 12 U.S.C. 2604.

[569] Id.

[570] Id.

[571] 24 C.F.R. 3500.21.

[572] Id.

[573] Id.

[574] Id.

[575] 12 U.S.C. 2603.

[576] 12 U.S.C. 2610; 24 C.F.R. 3500.12.

[577] 12 U.S.C. 2605(f).

[578] Va. Code 6.2-1600 et seq.

[579] Va. Code 6.2-1601.

[580] Va. Code 6.2-1602.

[581] Va. Code 6.2-1614.

[582] Id.; see 10 VAC 5-160-30. Although loan commitments and lock-in agreements are not required, when they are used, the agreements must disclose the nine items set forth in the regulation. See Va. Code 6.2-601. Although the parties to a mortgage are not required to lock in interest rates, fees, and points, every mortgage lender and broker is required to provide a written statement disclosing if and when there would be a lock-in (and the interest rates, fees, and points affected), disclosing the terms not locked in, initialed by the borrower, and disclosing a good faith estimate of the processing time (including allowance for government inspections and the parties’ performance).

[583] Va. Code 6.2-1614, -1615.

[584] Va. Code 6.2-1616.

[585] Va. Code 6.2-1614, -1619, -1624, -1626.

[586] Va. Code 6.2-1627.

[587] Va. Code 6.2-407.

[588] Va. Code 55-66.01.

[589] Va. Code 6.2-419.

[590] Id.

[591] Va. Code 36-96.1 et seq.

[592] Va. Code 36-96.1.

[593] Va. Code 36-96.6.

[594] Va. Code 36-96.8.

[595] Va. Code 36-96.18.

[596] Va. Code 6.2-500 et seq.

[597] Va. Code 6.2-501.

[598] Va. Code 6.2-503

[599] Va. Code 6.2-505.

[600] Va. Code 6.2-417.

[601] Va. Code 6.2-326.

[602] Va. Code 6.2-1618.

[603] Va. Code 6.2-326.

[604] Id.

[605] Va. Code 6.2-410.

[606] Va. Code 6.2-412.

[607] Va. Code 6.2-413.

[608] Va. Code 6.2-400.

[609] Id.

[610] Va. Code 6.2-421.

[611] Va. Code 6.2-423.

[612] Id.

[613] Va. Code 6.2-418.

[614] Id.

[615] Va. Code 55-66.3; see also Va. Code 55-66.4:1 (certificate of satisfaction).

[616] Va. Code 55-66.3.

[617] Id.

[618] Va. Code 55-59.

[619] Va. Code 55-59.1(A). Compare Va. Code 55-59.1(C) (failure to comply with notice requirement does not affect the validity of the sale), with In re McConaghy, 15 B.R. 480, 481 (Bankr. E.D. Va. 1981) (holding that a foreclosure is valid even if notice is not given when the property is sold at a public foreclosure sale to a third party for value).

[620] Va. Code 55-63; see Va. Code 55-59.2 (violation makes sale voidable by the court).

[621] See, e.g., Rohrer v. Strickland, 116 Va. 755, 82 S.E. 711 (1914) (invalidating the sale because of fraud and the extreme disparity between the sale price and the property’s value).

[622] Id.

[623] Va. Code 26-58.

[624] Va. Code 8.01-631. But see Deeds v. Gilmer, 162 Va. 157, 271, 174 S.E. 37, 82 (1934) (holding that a bond is required except in exceptional cases).

[625] Erie Ins. Group v. Hughes, 240 Va. 165, 170, 393 S.E.2d 210, 212 (1990).

[626] See 11 U.S.C. 1322.

[627] See 11 U.S.C. 109(e), 101(30); H.R. 95-595, at 308-14 (1977) (income derived from public assistance payments satisfies this requirement).

[628] 11 U.S.C. 362.

[629] 11 U.S.C. 1322(b)(2).

[630] See, e.g., In re Bradley, 109 B.R. 182 (Bankr. E.D. Va. 1990) (confirming a chapter 13 plan that proposed paying 10 percent to unsecured creditors).

[631] See 11 U.S.C. 522(f).

[632] Cf. In re Bradley, 109 B.R. 182 (Bankr. E.D. Va. 1990).

[633] See Capitol Credit Plan, Inc. v. Shaffer, 116 B.R. 60 (W.D. Va. 1988) (affirming the bankruptcy court’s finding that a home equity loan is not protected under 11 U.S.C. 1322(b)); appeal dismissed for lack of jurisdiction, 912 F.2d 749 (4th Cir. 1990).

[634] Cf. 11 U.S.C. 506(a).

[635] See 11 U.S.C. 1325(a)(3); Perry v. Commerce Loan Co., 383 U.S. 392 (1966).

[636] See 11 U.S.C. 1325(a)(3) (good faith).

[637] In re Cole, 88 B.R. 763 (Bankr. E.D. Va. 1988).

[638] Yaffe v. Heritage Sav. & Loan Ass’n, 235 Va. 577, 369 S.E.2d 404 (1988).

[639] See 11 U.S.C. 548; BFP v. Resolution Trust Corp., 511 U.S. 531, 545 (1994) (“a fair and proper price, or a ‘reasonably equivalent value’ for foreclosed property, is the price in fact received at the foreclosure sale, so long as all the requirements of the State’s foreclosure law have been complied with.”).

[640] 11 U.S.C. 548.

[641] See In re Madrid, 725 F.2d 1197, 1201-02 (9th Cir.) (rejecting avoidance of a sale at less than 50 percent of market value on the basis that the foreclosure was not a transfer under 11 U.S.C. 548), cert. denied, 469 U.S. 833 (1984).

[642] 15 U.S.C. 1602(w) (defining “residential mortgage transactions”).

[643] 15 U.S.C. 1635.

[644] See 15 U.S.C. 1635(i).

[645] Jenkins v. Landmark Mortg. Corp., 696 F. Supp. 1089, 1095 (W.D. Va. 1988).

[646] 15 U.S.C. 1635(d).

[647] See Va. Code 8.01-268.

[648] See 50 U.S.C. app. 501 et seq.

[649] 50 U.S.C. app. 533.

[650] 50 U.S.C. app. 517.

[651] 15 U.S.C. 1691 et seq.; see 12 C.F.R. pt. 202.

[652] See CMF Va. Land, L.P. v. Brinson, 806 F. Supp. 90, 94-97 (E.D. Va. 1992).

[653] 12 U.S.C. 1701x(c)(5).

[654] 12 U.S.C. 1701x(c)(4); see generally 42 U.S.C. 1471 et seq.

[655] 42 U.S.C. 3601 et seq.

[656] 42 U.S.C. 3604; Edwards v. Johnston County Health Dep't, 885 F.2d 1215 (4th Cir. 1989).

[657] 24 C.F.R. 203.602, 203.604.

[658] 24 C.F.R. 203.608.

[659] 38 C.F.R. 36.4280.

[660] Id.

[661] See, e.g., 38 U.S.C. 3732.

[662] See, e.g., 7 C.F.R. 1950 et seq.