Virginia · Code §§55.1-902, 55.1-903Virginia Wet Settlement Act: recording, disbursement and verifying the seller's identity

Virginia closings follow the Wet Settlement Act. The lender must cause loan funds to be disbursed to the settlement agent at or before loan closing – or, on a refinance or other loan with a right of rescission, within one business day after the rescission period ends – and can't charge interest until disbursement and closing have occurred (Code of Virginia §55.1-902). The settlement agent must cause the deed, the deed of trust or mortgage and any other required documents to be recorded, and must disburse the settlement proceeds within two business days of settlement. Before recordation, it may not disburse loan funds or other funds except overpayments being returned, money needed to record, or funds the provider directs in a separate written instrument to be paid before recording (§55.1-903(B)). In a residential purchase, the settlement agent must also notify the buyer that owner's title insurance is available and of the buyer's right to remove a prohibited restrictive covenant found in the title search. A 2026 amendment added a duty before settlement: the settlement agent must exercise ordinary care to reasonably ascertain the seller's identity, using methods such as satisfactory evidence of identity, multiple forms of photo ID, a written statement from the seller's attorney, a land-records review, comparing signatures, a credit check or detailed questions about the property – and an agent who relies on those methods isn't liable unless it knew the information was false or acted with gross negligence or willful misconduct (§55.1-903(A), (C)). Money paid to a settlement agent is held in a fiduciary capacity in a separate trust account, deposited no later than the close of the second business day, and disbursed only under written instructions (§55.1-1008).