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<p>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.<br>
</p>
<p>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.</p>
<p>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.<br>
</p>
<pre class="moz-signature" cols="72">Kary L. Krismer
John L. Scott, Inc.
206 723-2148</pre>
<div class="moz-cite-prefix">On 10/7/2019 1:55 PM, Craig Blackmon
wrote:<br>
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cite="mid:CAG1D8uZ2W1g3Ev9EMFVRBqBy5RrmzyQ2toBE0eyxX1tWL==8Tg@mail.gmail.com">
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<div dir="ltr">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).
<div><br>
</div>
<div>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.</div>
<div><br>
<div>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. </div>
<div><br>
</div>
<div>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.</div>
</div>
<div><br>
</div>
<div>We'll see how it unfolds.</div>
<div><br>
</div>
<div>Craig</div>
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<div style="font-size:12.8px">Craig
Blackmon, Attorney at Law</div>
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