[WSBARP] HR 1951--Amendment to Seller Disclosure Statement

[Travis S. Thornton]

This is crazy.  I only do commercial transactions, and was opposed to the expansion of these disclosure requirements to commercial property 10 years or so ago.

It is generally accepted that commercial buyers waive receipt of the disclosures to the extent legally permissible, but per 64.06.010(7), a buyer may not waive receipt of the "Environmental" section if the answer to any of those questions is yes. Under Section 4 of this bill, a seller is now liable for any misstatement, and can't say "I don't know" and the disclosure is not limited to actual knowledge.  The seller is not liable for a wrong answer only if it relied on a professional opinion on the issue and the professional got it wrong.  And the professionals don't definitively say, for example, "there are no haz mats".  They only say the records they reviewed and the investigations they performed did not reveal the presence of haz mats above certain levels. So how does a seller definitively say "No" when the consultant won't even say it?  A clean Phase I does not definitively mean there are no "substances, materials, or products in or on the property that may be environmental concerns, such as asbestos, formaldehyde, radon gas, lead-based paint, fuel or chemical storage tanks, or contaminated soil or water."

So now, if a seller really doesn't know whether there are any hazardous materials in the soil, or a wet area might be classified as a wetland, or there is water or other environmental damage, or now pest-caused damage per this bill, that hasn't revealed itself, and the seller checks "no" when it is later determined that the answer is "yes", the seller would be liable for damages unless the seller hires professionals to investigate all of these points prior to sale, and it may be liable even then.  It shifts tens of thousands of dollars in due diligence investigation costs to the seller, and the seller could still potentially have liability for giving what ultimately turns out to be a wrong "No" answer.

It seems to me that won't actually happen if this bill passes, but rather "Yes" will become the new "Don't know", and sellers will say "Yes" to all the enviro questions with a provision in the PSA essentially saying "I said 'yes' but I really don't actually know, and you need to rely on your own investigations," and this disclosure requirement will continue to be as pointless in the context of commercial transactions as it has always been.

Travis S. Thornton | Attorney
SSL LAW FIRM LLP | Direct: 206.848.6756

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Catherine Clark
Sent: Wednesday, January 12, 2022 12:54 PM
To: wsbarp at LISTS.WSBARPPT.COM
Subject: [WSBARP] HR 1951--Amendment to Seller Disclosure Statement

All:

Have you seen this bill?  It is currently in committee.

It proposes significant changes to the Seller's Disclosure Statement (as currently exists in RCW 64.06).

Thoughts?

Catherine "Cat" Clark
Law Office of Catherine C. Clark PLLC
110 Prefontaine Place South, Ste. 304
Seattle, WA 98104
Phone: (206) 838-2528
Cell: (206) 409-8938
Email: cat at loccc.com<mailto:cat at loccc.com>


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