[WSBARP] NWMLS Form 35

Mon Oct 7 14:16:00 PDT 2019

Craig is it your opinion that not only is the EM forfeited but the seller is excused from selling the property and  the sale for all intents and purposes is voided.?

Bryce H. Dille | Attorney at Law
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Chris B
Sent: Monday, October 7, 2019 2:07 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] NWMLS Form 35

As an active RE investor, I historically have inserted into all my PSAs (as a seller) that the Buyer is not to share their inspection with me.  If they don’t want to buy, they can terminate the PSA.  I want to avoid the tendency of buyers to use inspections to “nickel and dime” me as a seller and use it to renegotiate the price.  I also want to avoid creating a disclosure paper trail.

Chris Benis
Hecker, Wakefield & Feilberg, P.S.
321 First Avenue West, Seattle, WA  98119
206.447-1900 office – 206.447.9075 fax – www. heckerwakefield.com

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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Craig Blackmon
Sent: Monday, October 7, 2019 1:56 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] NWMLS Form 35

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/>
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On Mon, Oct 7, 2019 at 1:46 PM <nestor at pplsweb.com<mailto: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<mailto:Krismer at comcast.net>>
Sent: Monday, October 7, 2019 1:27 PM
To: nestor at pplsweb.com<mailto: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<mailto: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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