Let’s look at a bizarre reality currently playing out in the Virginia legal system.

A veteran couple retires from Texas and chooses the Commonwealth as their next adventure. They buy a brand-new house built by a contractor who crossed state lines from another jurisdiction to build here.

Regulatory reciprocity makes interstate construction possible for many builders. Sadly in this case, the house turned out to be riddled with code violations as confirmed by Chesterfield County. The homeowners put up a sign alleging code violations to warn their neighbors.

The out-of-state builder retaliated by challenging the first amendment and hitting them with a massive $2.5 million dollar defamation lawsuit in an anti-slap state. No one said the builder was smart.

Here is the kicker: The homeowners aren’t originally from here. Thanks to the builder, they likely won’t retire here. The builder isn’t from here and neither is his corporate entity responsible for the alleged substandard home and the massive lawsuit that Virginia’s taxpayers now have to pay for.

Yep, that’s right. Virginia taxpayers are the ones stuck footing the bill for the courtroom trial and all of the legal shenanigans that are now scheduled a few months out.

Thanks to the shortsighted and reckless reciprocity legislation pushed through Richmond by the pro-deregulation, Republican-led, construction and data-center-loving former General Assembly, our local courts are being clogged and our tax dollars are being drained to referee a fight between an out-of-state builder and out-of-state buyers.

We want to extend a special thank you to State Senator Glen Sturtevant and former Delegate Mark Earley for allowing the Home Builders’ lobbyists to encourage them into rolling back legal protections while ignoring whistleblowers who were alerting to the lack of consumer protections. Lawmakers could have prevented this. Instead, the pair traded constituent protections for campaign dollars and allowed Virginia’s citizens to clean up and pay for the mess. One lost re-election, let’s hope the former follows suit.

Opening the Aperture, Blinding the State

We have a major housing crunch in Virginia. In a rush to spark competition and build homes faster, state politicians implemented a reciprocity policy, allowing out-of-state builders to pull permits and operate in Virginia as long as they hold a license in their home state.

In theory, more competition sounds great. In practice? Virginia wasn’t ready.

We learned in this week’s podcast:

“What happens a lot of times in government is you go to fix a problem, and you create five others for yourself... If you don’t have a way to track them and hold them accountable, all you’ve done actually is created more of an issue for yourself.”

— Jim Moye

Virginia’s internal regulatory tracking systems are already a documented disaster. According to the audit from the Office of the Inspector General, millions have been wasted on broken state tracking software that completely fails to hold builders accountable.

Throwing open the state’s economic borders to unvetted contractors without an infrastructure to monitor them didn’t invite healthy competition. The policy invited a feeding frenzy for out-of-state grifters.

Making Taxpayers Foot the Bill. Again.

When the owners of the “Lemon House” (who you can follow on Instagram at @lemonhouseva) publicly voiced their frustration, the builder used the legal system to silence them. That builder brought, in my opinion, a heavy-handed defamation lawsuit, completely ignoring Virginia’s anti-SLAPP laws which protect citizens from intimidating, retaliatory lawsuits meant to suppress free speech.

Because this builder came from out of state, they clearly didn’t understand—or didn’t care —how our laws work. Now, local taxpayers have to provide the courthouse, the judges, and the administrative staff for a trial by jury over a situation where the county building department already confirmed code violations existed.

Instead of quietly fixing a bad build, the contractor chose what we consider to be baseless intimidation. But thanks to the internet, it backfired. The entire country now knows about the Lemon House, and the builder’s choice to sue has demonstrated a moral character that buyers will likely not want to invest in.

Jim Moye’s 3 Simple Fixes for Virginia Leadership

We don’t need multi-million dollar database overhauls to protect consumers. Jim outlines three common-sense rules that could be implemented quickly to close this out-of-state loophole:

1. Mandatory In-State Sponsorship: Require out-of-state builders to be sponsored and vouched for by a licensed, resident Virginia business (like a local plumber or electrician) so there is immediate local accountability.

2. Strict Reference Checks: Force regulatory boards to execute a thorough background and reference check with the builder’s home-state licensing authority before granting entry.

3. Establish a Track Record Threshold: Do not let rookies cross state lines. Require out-of-state businesses to prove they have a clean track record of operating for a minimum of years.

Accountability Must Be a Two-Way Street

Everyday citizens can’t miss a tax payment or skip a parking ticket. The government holds us accountable. But in Virginia, when bad actors grift consumers out of millions, state regulatory boards like DPOR look the other way, claim a lack of jurisdiction, and refuse to pass the evidence to Commonwealth’s Attorneys. Although if we are honest, the CA’s don’t answer the call for justice often anyway.

If we want consumer markets to function, accountability cannot be a one-way street.

What can you do? Stay engaged. Don’t let the political status quo breed complacency. Show up to the midterms, look out for your neighbors, and demand that our legislative and executive branches work together to prioritize consumer safety over special interest lobbies.