[WSBARP] Why doesn't a buyer get a new three-day rescission period after discovering inaccuracy in the seller's real property disclosure statement?

[Rod Harmon]

Yes, that is what I am getting at.  What are the buyer's remedies if they discover the disclosure statement was inaccurate?  If the discovery is within the three-day window, the buyer can rescind under 64.0, cut and dried.  There ought to be a cut and dried solution even if the discovery is after the three-day window, but there isn't.  You have to get into a mutual mistake analysis, which also involves asking whether there was constructive knowledge or an assumption of risk.  I think the legislature should have left some mechanism in place that did not require going to court in case a disclosure statement inaccuracy was discovered late in the closing process.

Rod Harmon

RODNEY T. HARMON
       Attorney at Law
         P.O. Box 1066
      Bothell, WA   98041
     Tel:   (425) 402-7800
     Fax:  (425) 458-9096
    www.rodharmon.com<http://www.rodharmon.com>
   rodharmon at msn.com<mailto:rodharmon at msn.com>




From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Kary Krismer
Sent: Tuesday, March 31, 2020 10:27 AM
To: wsbarp at lists.wsbarppt.com
Subject: Re: [WSBARP] Why doesn't a buyer get a new three-day rescission period after discovering inaccuracy in the seller's real property disclosure statement?


I don't know about the legislative history, but I think the purpose is likely related to the inspection process.  From the inspection response the seller will frequently learn of new conditions to the property and the amendment merely keeps the seller from needing to amend the disclosure statement --for that particular sale to that particular buyer.

Also, the purpose of the disclosure statement is to disclose conditions to the buyer.  If the buyer informs the seller that purpose would not be fulfilled because the buyer by definition already knows.

What you're getting at is seemingly more what are the buyer's remedies if they discover the disclosure statement was inaccurate.

Kary L. Krismer

John L. Scott, Inc.

206 723-2148
On 3/31/2020 10:14 AM, Rod Harmon wrote:

As originally enacted in 1994, RCW 64.06.040 required a seller to amend the seller disclosure statement if the seller became aware of additional information which made any of the disclosures inaccurate.  An amendment starts a new three-business-day rescission period.  In the 2009 amendments, that requirement was amended to limit the duty to amend to situations in which "the seller ((becomes aware)) learns from a source other than the buyer or others acting on the buyer's behalf such as an inspector of additional information ... which makes any of the disclosures made inaccurate."  With that amendment, if the buyer discovered the additional information after the three-business-day period expired but before closing, the seller was not obligated to amend the disclosure statement.  For example, say the buyer discovers that the property is in an environmentally critical area and the disclosure statement says it is not. Because the rescission period had expired, the buyer would not be able to use the disclosure statute to rescind. This seems strange to me.

I can see how in that case the buyer could rescind on a common law ground, preserved under RCW 64.06.050.  Specifically, the buyer could rescind based upon a mutual mistake about a material fact, or, if the seller knew of the ECA designation, unilateral mistake by the buyer and concealment by the seller.  But I am having trouble understanding why the legislature amended the statute so that the buyer could not use RCW 64.06  to rescind the contract. I did not find anything in the legislative history that addresses it.  I would appreciate any insight anyone has into the reason for this amendment. I am hoping someone on this listserv had a hand in drafting it.

Rod Harmon

RODNEY T. HARMON
       Attorney at Law
         P.O. Box 1066
      Bothell, WA   98041
     Tel:   (425) 402-7800
     Fax:  (425) 458-9096
    www.rodharmon.com<https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.rodharmon.com%2F&data=02%7C01%7C%7C9d1351cc189745c7214108d7d59a15c4%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637212730069258808&sdata=DkomXvF%2BzmBIGqdeMlzDYpQonkYJvcfBPiA6Mhp8gv4%3D&reserved=0>
   rodharmon at msn.com<mailto:rodharmon at msn.com>








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