[WSBARP] NWMLS Form 35

[Craig Blackmon]

Colleagues, I've considered the issue and have reached the opposite
conclusion. By providing a portion of the report, buyer breached. No
further performance is due, and seller is entitled to the liquidated
damages (forfeiture of earnest money).

This is exactly the purpose of liquidated damages. The seller's injury --
learning of a defect that must now be disclosed in the future, with the
resulting loss in value -- cannot be ascertained. The way the contract is
written, I think seller is entitled to the earnest money. Presumably the
parties can negotiate a better resolution than that -- but seller keeps the
earnest money otherwise.

Note that I am really disappointed with this recent change to the form. I
feel it impairs a buyer's ability to communicate the defect that must be
cured in satisfaction of the inspection contingency. The authors of the
form felt that the change was needed to prevent buyers from using
inspection reports (and the resulting duty to disclose to a subsequent
buyer) as an unfair negotiating tactic.

I'd like to see an exception inserted that allows a buyer to provide those
specific and limited portions of a report that identify repairs the seller
must address in order to satisfy the inspection contingency. In the
meantime, I see risk of a dispute between buyer and seller either just
before or right after closing, as to whether the seller fixed the defects
as "agreed." The parties can foreseeably have a misunderstanding, given the
inability to share the relevant portions of the report.

We'll see how it unfolds.

Craig
Craig Blackmon, Attorney at Law
Seattle Real Estate Lawyer <http://www.seattlepropertylawyer.com/>
92 Lenora St. (The Makers Space, a shared work environment)
Seattle WA 98121
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On Mon, Oct 7, 2019 at 1:46 PM <nestor at pplsweb.com> wrote:

> Kerry, I am not sure I follow your last line where Buyer would be liable
> for damages.
>
>
>
> After a proper and timely 35R was provided by the Buyer and  Seller
> doesn’t want to make the substantial repairs and says if you don’t close we
> keep you deposit because I received the report, why would the Buyer be in
> default?   I don’t think Seller has been given that hammer to wield in this
> circumstance.
>
>
>
> Also, I am not following the intent of this clause, unless it was done to
> prevent Buyers from sending a huge garbage list of repairs where the Seller
> is now on “notice” to amend a Form 17 based upon these reports if the
> Seller doesn’t; acquiesce to the Buyer’s demand.
>
>
>
>
>
> Nestor Gorfinkel, Attorney at Law
>
> Licensed in Washington & Florida
>
> Florida Civil-Law (International) Notary
>
>
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> *From:* Kary Krismer <Krismer at comcast.net>
> *Sent:* Monday, October 7, 2019 1:27 PM
> *To:* nestor at pplsweb.com
> *Subject:* Re: [WSBARP] NWMLS Form 35
>
>
>
> I would agree with you about the consequences.  Note the form does not say
> the contract is terminated and the EM is to be returned to the seller.
> IMHO you'd need a material breach for damages, and I have a hard time
> imagining a situation where the buyer wouldn't be allowed to just waive
> their inspection contingency and proceed to closing after having provided
> the inspection report.  In that scenario the seller would not have been
> damaged at all (ignoring aggravation).
>
> It's where the buyer doesn't proceed to closing and/or makes
> "unreasonable" demands for an adjustment that the clause and damages come
> into play.
>
> Kary L. Krismer
>
> John L. Scott, Inc.
>
> 206 723-2148
>
> On 10/7/2019 1:22 PM, nestor at pplsweb.com wrote:
>
> The recently updated form 35 adds to paragraph 1a. the following...”Buyer
> shall not provide the inspection report, or portions thereof to Seller
> unless Seller requests otherwise or as required by paragraph 1.b”.
>
>
>
> Selling broker provides a 35R with copy of reports to Listing Broker.
> Seller now wants to hold Buyer in default and forfeit Earnest Money because
> Selling agent provided copy to Listing Agent.
>
>
>
> I can’t see how the Buyer defaulted (for a couple of reasons to start) and
> forfeited the deposit. Curious to hear your thoughts.
>
>
>
>
>
> Nestor Gorfinkel, Attorney at Law
>
> Licensed in Washington & Florida
>
> Florida Civil-Law (International) Notary
>
>
>
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