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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">Chris Benis<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">Hecker, Wakefield & Feilberg, P.S.<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">321 First Avenue West, Seattle, WA 98119<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">206.447-1900 office – 206.447.9075 fax – www. heckerwakefield.com
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">From:</span></b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Craig Blackmon<br>
<b>Sent:</b> Monday, October 7, 2019 1:56 PM<br>
<b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br>
<b>Subject:</b> Re: [WSBARP] NWMLS Form 35<o:p></o:p></span></p>
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<p class="MsoNormal">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). <o:p></o:p></p>
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<p class="MsoNormal">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.<o:p></o:p></p>
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<p class="MsoNormal">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. <o:p></o:p></p>
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<p class="MsoNormal">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.<o:p></o:p></p>
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<p class="MsoNormal">We'll see how it unfolds.<o:p></o:p></p>
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<p class="MsoNormal">Craig<o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:9.5pt">Craig Blackmon, Attorney at Law<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"><a href="http://www.seattlepropertylawyer.com/" target="_blank">Seattle Real Estate Lawyer</a></span><span style="font-size:9.5pt"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#212121">92 Lenora St. (The Makers Space, a shared work environment) </span><span style="font-size:9.5pt"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#212121">Seattle WA 98121</span><span style="font-size:9.5pt"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#212121">Office/Cell: </span><span style="font-size:9.5pt">(206) 369-5949 Fax: (206) 770-7328 <o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt"><a href="https://twitter.com/LawyerBroker" target="_blank">@LawyerBroker</a><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt"><a href="http://www.seattlepropertylawyer.com/blog?category=Buy+without+an+Agent" target="_blank">How to Buy Without an Agent</a> | <a href="http://www.seattlepropertylawyer.com/blog?category=Sell+FSBO" target="_blank">How
to Sell FSBO</a> | <a href="http://www.seattlepropertylawyer.com/blog?category=Real+Estate+Glossary" target="_blank">RE Glossary</a><o:p></o:p></span></p>
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<p class="MsoNormal">On Mon, Oct 7, 2019 at 1:46 PM <<a href="mailto:nestor@pplsweb.com">nestor@pplsweb.com</a>> wrote:<o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">Kerry, I am not sure I follow your last line where Buyer would be liable for damages.<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"> <o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">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.
<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"> <o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">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.<o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"> <o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">Nestor Gorfinkel, Attorney at Law<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">Licensed in Washington & Florida<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">Florida Civil-Law (International) Notary<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"> <o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b>From:</b> Kary Krismer <<a href="mailto:Krismer@comcast.net" target="_blank">Krismer@comcast.net</a>>
<br>
<b>Sent:</b> Monday, October 7, 2019 1:27 PM<br>
<b>To:</b> <a href="mailto:nestor@pplsweb.com" target="_blank">nestor@pplsweb.com</a><br>
<b>Subject:</b> Re: [WSBARP] NWMLS Form 35<o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"> <o:p></o:p></p>
<p>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).
<o:p></o:p></p>
<p>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.<o:p></o:p></p>
<pre>Kary L. Krismer<o:p></o:p></pre>
<pre>John L. Scott, Inc. <o:p></o:p></pre>
<pre>206 723-2148<o:p></o:p></pre>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">On 10/7/2019 1:22 PM,
<a href="mailto:nestor@pplsweb.com" target="_blank">nestor@pplsweb.com</a> wrote:<o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">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”.<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"> <o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">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.<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"> <o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">I can’t see how the Buyer defaulted (for a couple of reasons to start) and forfeited the deposit. Curious to hear your thoughts.<o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">Nestor Gorfinkel, Attorney at Law<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">Licensed in Washington & Florida<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">Florida Civil-Law (International) Notary<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"> <o:p></o:p></p>
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