Buying or Selling Commercial Real Estate in Virginia

Buying or selling commercial property in Virginia differs from a residential transaction. Fewer statutes protect the parties, more is left to negotiation, and local rules on taxes, environmental areas, and zoning can affect value. This guide covers the Virginia-specific issues we see most often.

Is There a Standard Commercial Purchase Contract in Virginia?

No. The Virginia Code does not prescribe a statewide form contract for commercial real estate. Each deal’s terms are negotiated, which makes the written agreement the most important document in the transaction. Virginia’s statute of frauds requires a written, signed contract to sell real estate or to lease it for more than one year, and a written, signed agreement for a promise to answer for another’s debt, such as a guaranty (Va. Code § 11-2).

Because nothing fills in commercial terms by default, buyers should focus on the due diligence period, earnest money, title and survey objections, representations, and remedies. Our article on key terms in a commercial purchase agreement covers these provisions in detail.

Does a Virginia Seller Have to Disclose Problems With Commercial Property?

Not by statute. The Virginia Residential Property Disclosure Act applies only to residential property with one to four units (Va. Code § 55.1-701). Commercial sales are governed by buyer-beware principles: the buyer bears the burden of discovering defects, but a seller may not actively conceal defects or divert the buyer from a prudent inspection (Van Deusen v. Snead, 247 Va. 324 (1994)). Mere silence is generally not fraud unless the seller had a duty to disclose. A buyer who investigates is also charged with what that investigation would reveal (Beck v. Smith, 260 Va. 452 (2000)).

Buyers typically negotiate for seller representations, delivery of leases, service contracts, environmental reports, and surveys, and a right to terminate during a feasibility period. Our commercial due diligence checklist lays out what to request.

Who Conducts a Commercial Closing in Virginia?

The Consumer Real Estate Settlement Protection Act (Va. Code § 55.1-1000 et seq.) is generally limited to purchases and loans on property with no more than four residential units (Va. Code § 55.1-1002(A)). There is one important exception: a lay (non-attorney) settlement agent may close a transaction involving any Virginia real property, including commercial property, but must be registered and comply with the Act when it does (§ 55.1-1002(B)). An attorney closing a commercial deal remains subject to the Rules of Professional Conduct and other legal obligations regardless of the Act. The contract typically designates the settlement agent, and each party should consider having its own counsel review the documents.

What Taxes and Fees Apply at a Virginia Commercial Closing?

Virginia imposes taxes on recorded deeds and deeds of trust. The table below summarizes the main items and who customarily pays. Who pays is mostly a matter of custom and contract, not law, except where noted.

Because these taxes apply to recorded instruments, there is no Virginia statute imposing a transfer tax on a sale of controlling interests in an entity that owns real estate. Transfers of real estate into or out of an LLC or partnership can be exempt from the state recordation tax, the grantor tax, and the regional fees when the transferors (or, for a transfer out, the recipients) are entitled to at least 50% of the entity’s profits and surplus (Va. Code § 58.1-811). For an LLC, the exemption is lost if the transfer comes before or after a transfer of control of the company’s assets undertaken to avoid recordation taxes. The exemption does not automatically cover a deed of trust recorded with the transfer. Any entity-based structure should be reviewed with a tax advisor before closing. See our article on holding commercial real estate in an LLC for related planning issues.

How Does Recording Protect a Virginia Buyer?

Under Va. Code § 55.1-407, an unrecorded deed or contract is void against purchasers for value without notice and lien creditors until it is recorded. This is commonly described as a race-notice rule: to be protected against an earlier unrecorded interest, a later buyer generally must purchase without notice of it and record. Buyers should record promptly and obtain an owner’s title insurance policy. Our article on title insurance and ALTA surveys explains how title commitments and endorsements fit in.

How Do Deeds of Trust and Foreclosure Work in Virginia?

Commercial loans in Virginia are typically secured by a deed of trust naming a trustee. On default, the trustee may sell the property at public auction without a court order (Va. Code § 55.1-320). For property other than owner-occupied residential property, written notice of the sale mailed to the owner at least 14 days before the sale is generally sufficient (§ 55.1-321), though 2024 amendments added further requirements for certain subordinate-lien foreclosures. If the deed of trust is silent, the sale is advertised once a week for four successive weeks, or on five different days where the property is in a city or a county next to a city; a deed of trust may shorten this, but not below the statutory minimums (§ 55.1-322). Borrowers should read default and cure provisions carefully before signing.

What Should Buyers Know About Mechanic’s Liens in Virginia?

A contractor or supplier may record a memorandum of mechanic’s lien within 90 days after the last day of the month in which it last performed work or furnished materials, and no later than 90 days after the project is completed or work otherwise ends (Va. Code § 43-4). The lien may not include amounts for work performed more than 150 days before the claimant’s last work. Suit to enforce must be filed within six months after recording or 60 days after completion, whichever is later (§ 43-17).

The practical point: liens can appear after closing for work done before it. Title companies typically require an owner’s affidavit from the seller, and buyers often request mechanic’s lien coverage in the title policy when recent work has been done.

What Local Issues Affect Hampton Roads and Rural Property?

Under the Chesapeake Bay Preservation Act (Va. Code § 62.1-44.15:67 et seq.), Tidewater localities, including Norfolk, Virginia Beach, Chesapeake, Portsmouth, Suffolk, Hampton, and Newport News, must designate Chesapeake Bay Preservation Areas that limit development near shorelines and wetlands. Within a Resource Protection Area, a 100-foot vegetated buffer generally must be kept, development is limited to specified categories, and redevelopment generally may not add impervious cover (9VAC25-830-140). The designation is not a citywide ban; what applies depends on the parcel’s mapped designation and the local ordinance. For waterfront sites in Hampton Roads, confirm early whether the property lies in a designated area.

Rollback taxes are another issue, especially for land. If land has been taxed under land-use assessment, a change to a nonqualifying use or an owner-requested rezoning to a more intensive use triggers rollback taxes, generally equal to the deferred tax for the five most recent complete tax years plus simple interest, on the portion of the land that no longer qualifies (Va. Code § 58.1-3237). Localities with sliding-scale ordinances calculate differently, and some localities defer rollback on certain rezonings until the use actually changes. A change of title alone does not trigger rollback if the new owner continues the qualifying use. Beginning January 1, 2027, settlement agents who know property is taxed under land-use assessment must give the purchaser written notice before settlement (§ 55.1-1008.1). Contracts should address who bears rollback taxes if the buyer’s plans will trigger them.

How Do Zoning Appeals and Vested Rights Work?

A zoning administrator’s decision may be appealed within 30 days (Va. Code § 15.2-2311(A)). After 60 days, the zoning administrator generally cannot change, modify, or reverse a written determination if someone materially changed position in good-faith reliance on it, except in cases of fraud, malfeasance, or clerical error (§ 15.2-2311(C)). That protects against later administrative reversal, not against a timely appeal. Vested rights generally require a significant affirmative governmental act that remains in effect and allows a specific project, good-faith reliance on it, and extensive obligations or substantial expenses incurred in diligently pursuing that project (§ 15.2-2307(A)); qualifying governmental acts are listed in § 15.2-2307(C). Buyers needing a specific use often request a written zoning determination. See our article on zoning and land use due diligence.

What Virginia Rules Apply to Commercial Leases?

Nonresidential tenancies are governed by Title 55.1, Chapter 14 of the Virginia Code. The lease controls, and the chapter fills gaps (Va. Code § 55.1-1400). If a commercial tenant remains in rent default five days after receiving written notice, the landlord may retake possession without further legal process, as long as doing so does not cause a breach of the peace (§ 55.1-1415). Because a mishandled lockout can expose the landlord to claims, many landlords instead file an unlawful detainer in general district or circuit court (§§ 8.01-124, 8.01-126). In general district court, the landlord must present a proper termination notice, and the court must admit it into evidence, before it can enter an order of possession or a judgment for the landlord (§ 8.01-126). Commercial cases are included. Rent may also be recovered through distress, a court-authorized proceeding in which the sheriff, not the landlord, levies on qualifying tenant property after the landlord files a sworn petition and posts bond (Va. Code § 8.01-130.1 et seq.). How much rent the lien secures against competing creditors depends on the property’s location and use. Self-help also requires that the landlord actually have the right to possession; a peaceful lockout without that right can still expose the landlord to liability.

How Does Virginia Compare With North Carolina?

The two states handle the same issues differently. North Carolina uses a pure race recording statute, while Virginia’s is commonly described as race-notice. North Carolina’s excise tax is paid by the seller, while Virginia’s recordation tax is customarily paid by the buyer. North Carolina foreclosures by power of sale require a hearing before the clerk of superior court; Virginia trustee sales generally do not. North Carolina also has standard commercial forms published by the NC Bar Association and NC REALTORS. See buying or selling commercial real estate in North Carolina.

Frequently Asked Questions

Who pays the recordation tax in a Virginia commercial sale?

By custom, the buyer pays the recordation tax on the deed and the borrower pays the tax on the deed of trust, while the seller pays the grantor tax. These allocations are negotiable, so the contract controls.

Does Virginia require a seller disclosure for commercial property?

No. The Residential Property Disclosure Act applies only to residential property with one to four units. Commercial buyers should rely on due diligence and contract representations.

Can a Virginia commercial landlord change the locks?

Under Va. Code § 55.1-1415, if the tenant remains in rent default five days after receiving written notice, the landlord may retake possession without further process if no breach of the peace occurs. Many landlords still choose unlawful detainer to reduce risk.

Can I avoid recordation tax by selling the LLC that owns the property?

Virginia’s recordation tax applies to recorded instruments, and there is no controlling-interest transfer tax statute; a sale of stock or LLC interests while the entity keeps title does not trigger the deed taxes. However, entity transfers raise tax and liability issues, and exemptions such as § 58.1-811 have limits. Get tax advice before structuring a deal this way.

Do I need a Virginia attorney for a commercial closing?

The consumer settlement statute generally does not apply to attorney-handled commercial closings, but the stakes and the lack of statutory protections make experienced counsel valuable for reviewing the contract, title, and closing documents.

Related Articles in This Guide

• The Legal Guide to Commercial Real Estate in Virginia and North Carolina
• Commercial Real Estate Letters of Intent: What to Negotiate Before the Contract
• Key Terms in a Commercial Real Estate Purchase Agreement
• Commercial Real Estate Due Diligence Checklist
• Title Insurance and ALTA Surveys in Commercial Real Estate
• Zoning and Land Use Due Diligence for Commercial Property
• Negotiating a Commercial Lease: What Tenants Should Know
• CAM Charges and Triple Net Leases: How Operating Expenses Really Work
• Personal Guaranties in Commercial Leases: Limiting Your Exposure
• Should You Hold Commercial Real Estate in an LLC?
• 1031 Exchanges: Legal Issues, Deadlines, and Common Mistakes
• Buying or Selling Commercial Real Estate in North Carolina

This article provides general information only. It is not legal, tax, or financial advice and does not create an attorney-client relationship. Laws differ by state and change over time. Our attorneys are licensed in Virginia and North Carolina. We assist clients with business transactions involving multiple states. For matters involving the law of a state where we are not licensed, we associate with appropriately licensed counsel or otherwise proceed only as permitted by applicable law.