[WSBARP] NWMLS Form 35

[Bryce Dille]

So what if any remedy does the seller has if unauthorized disclosure of the inspection report is made especially if the deal closes?

Bryce H. Dille | Attorney at Law
Dille Law, PLLC
P: 360-350-0270 | F: 844-210-4503
2010 Caton Way SW, Suite 101
Olympia, Washington 98502
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Kary Krismer
Sent: Monday, October 7, 2019 2:29 PM
To: wsbarp at lists.wsbarppt.com
Subject: Re: [WSBARP] NWMLS Form 35


The forms have numerous situations where an event triggers the cancellation of the contract, and then explicitly states what happens to the EM.  That is not the case with this new Form 35 language.

But in any case, the forfeiture of EM liquidated damages provisions only apply per Form 21:  "In the event Buyer fails, without excuse, to complete the purchase of the property . . ."  Where the buyer still wishes to proceed to closing, the liquidated damages clause is not applicable.

As to your concern about the change, nothing prevents the listing agent from asking for the page(s) of the report that describe an item requested for repair/adjusted price.  Sometimes that is necessary, but usually that's due to a poorly worded inspection request.  For example this year we had a buyer asked for "Seller to repair missing siding piece" without describing where the missing siding was located.  It turned out it was a location you could only see from the roof.  We had to request more information from the buyer's agent.

Kary L. Krismer

John L. Scott, Inc.

206 723-2148
On 10/7/2019 1:55 PM, Craig Blackmon wrote:
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
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