[WSBARP] NWMLS Form 35 now prohibits disclosure of inspection report???

[Erik Marks]

I am in the process of renewing my broker license and ran across something that strikes me as very odd.  I would be interested in hearing from people on the list who might work in the residential forms space and understand the context.  What I learned is that NWMLS Form 35 (Inspection Contingency) now provides that the Buyer agrees NOT to provide a copy of the Inspection Report to the Seller, and that if the Buyer does so, then the inspection contingency is deemed waived.  

 

My first question is why is this in the form?  The only answer I can come up with is that the purpose of the clause is to protect the Seller from gaining knowledge of what is in the Inspection Report so that the Seller does need to disclose that knowledge to a future buyer if the pending sale falls through.  Is that correct?

 

And if so, then holy cow am I confused by the decision to add that provision.  There are entire sections of the license-renewal-course dedicated to saying that the Listing Broker must avail themselves of reasonably available information about the property, and cannot intentionally keep their head in the sand.  For example, one quote from the materials is” "Strategic Ignorance is unethical and illegal. Licensees must always conduct a reasonably competent and diligent visual inspection of property offered for sale and disclose the facts that such an investigation reveals.”  Reference is made in the materials to Easton v Strasburger, 152 CalApp 3d 90 (1984) as the seminal case underlying the principle that intentional ignorance by the broker is a breach of ethical duty.  

 

If intentional ignorance by a broker is a breach of ethical duty, wouldn’t the inclusion of a clause in the PSA that prohibits  a buyer from sending a 3rd party inspection report to the Listing Agent, when the Listing Agent knows the inspection report is likely to contain material information about the condition of the property?  And, although the broker did not draft the form, the broker did provide the form and the broker signed the form.  

 

I don’t get it….  Thank you to anyone who has special insight on this issue to share.

 

Erik

 

 

-- 

Erik G Marks 

Attorney at Law 
PO Box 16247

Seattle, WA 98116

  
(206) 612-8653
erik at egmrealestate.com

Physical Office:
4220 SW Spokane St
Seattle, WA 98116

 

 

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