Bulletin: VA2023001

Dear Associates:

Code of Virginia Sections 55.1-507, 55.1-508, and 55.1-509, effective July 1, 2023, prohibit any foreign adversary, as defined in the statute, from acquiring any interest, including a leasehold interest, in agricultural land in the Commonwealth of Virginia. This bulletin outlines the effect of the new law and its current impact on title agents. 

Effect of the New Law:

• Any acquisition of any interest in agricultural land in violation of the statute shall be void and such interest shall be deemed vested in the Commonwealth.
• The foreign adversary purporting to acquire such interest shall be barred from making a claim for restitution for any of the purchase price paid to acquire the interest.
• Any lien, including a deed of trust, that has attached to such interest shall remain valid during the time of ownership by the Commonwealth, but such lien may not be foreclosed, nor shall the Commonwealth be subject to the terms of any agreement giving rise to the lien.
• The Commonwealth may dispose of the interest in any proper manner.
• If the foreign adversary has subsequently sold or transferred the interest to a non-foreign adversary, such title shall vest in the non-foreign adversary as if the acquisition by the foreign adversary had never occurred.
• If an interest is acquired by a foreign adversary, a proper authority identified in the statute, or any non-foreign adversary party to the void transaction may file an action: (i) to eject the foreign adversary; (ii) to quiet title to such property; or (iii) for any other appropriate action to ratify the nullification of the transaction.

Important Statutory Definitions:

• "Agricultural land" means real estate in the Commonwealth used or zoned in a manner that would permit the use of the real estate for an agricultural operation. (Note: this definition includes land that is not currently used for an agricultural operation, but MAY be used for such purpose per the existing zoning.)
• "Agricultural operation" means any operation devoted to the bona fide production of crops, animals, or fowl, including the production of fruits and vegetables of any kind; meat, dairy, and poultry products; nuts, tobacco, nursery, and floral products; and the production and harvest of products from silvicultural activity.
• "Foreign adversary" means any foreign government or nongovernment person determined by the U.S. Secretary of Commerce to have engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or security and safety of United States persons, as set forth in 15 C.F.R. § 7.4 or such successor regulation, declaration, or statute as may exist from time to time.
• "Interest in agricultural land" means any right, title, or interest, direct or indirect, in and to (i) agricultural land or (ii) any entity or other organization that holds any right, title, or interest, direct or indirect, in and to agricultural land. For purposes of this definition, any interest that taken on its own or together with any other interest held in common or under common control does not give the holder of the interest the ability to possess or occupy the agricultural land in any manner or the power or authority to direct the conduct of the agricultural operation being conducted on the agricultural land.

Action by Title Agents:

If an agent discovers or has notice that a buyer is a foreign adversary under the statute, the agent is advised to contact Stewart Underwriting Counsel immediately before proceeding.

If an agent discovers or has notice the property involved in the transaction is agricultural land as defined in the statute, but has no indication the purchaser may be a foreign adversary, the agent is advised to have the purchaser execute the attached Purchaser’s Affidavit and Indemnification.

Currently there is no requirement that the agent include a general exception in their policies addressing the new law. This may change in the future, in which case Stewart will amend this bulletin.

For your reference, Code of Virginia Sections 55.1-507, 55.1-508, and 55.1-509 can be found here:

https://casetext.com/statute/code-of-virginia/title-551-property-and-conveyances/subtitle-i-property-conveyances/chapter-51-foreign-entities-and-property-ownership

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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