Patricia sells her investment property in Loudoun County, Virginia for $750,000. The purchase contract states that the buyer will pay all transfer taxes and recordation fees as part of the negotiated terms. Under Virginia law, which of the following is the most accurate statement regarding this contractual arrangement?
Correct Answer
B) The arrangement is enforceable between the parties, but the seller remains the legally responsible party to the state if the buyer fails to pay
In Virginia, the parties to a real estate contract may negotiate who pays various closing costs, including transfer taxes and recordation fees. However, the statutory obligation to pay the grantor's tax remains with the seller (grantor) under Virginia Code § 58.1-801. If the buyer contractually agrees to pay but fails to do so, the state may still look to the seller as the legally responsible party. The contract is enforceable between the parties as a private agreement, but it does not extinguish the seller's statutory liability to the Commonwealth.
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