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<p>Back after Alejandre v. Bull came out I was critical of the
decision, but I've come to appreciate both it and Douglas v.
Visser a great deal, but that's because those decisions should
(but somehow don't) encourage seller inspections. And in fact I
think very little about Form 17 when I think of those decisions.
My recent Bar Bulletin article that touched on those cases didn't
even mention Form 17. Today I'd be reluctant to roll back that
line of cases because today's market has proven we need something
to encourage seller inspections--the message just needs to get out
to sellers so that they again are more likely to allow inspections
(and stop the problematic practice of seller inspections).</p>
<p>Accordingly I would agree with the second suggestions below, but
not the third. The first suggestion would raise the question of
how a seller is to answer if they don't have actual knowledge. Do
they have to call in experts to advise them of every condition of
the property? That would lead to the same result this legislation
might lead to--sellers simply not filling out Form 17 and risking
buyers backing out. The fourth is a bit too broad since it would
virtually eliminate the need to ask any questions given the "other
material defect" answer. <br>
</p>
<p>My suggestion is a more basic change that would be to still not
require information obtained from inspections to trigger an
amendment of Form 17 for that particular transaction, but would
expressly allow other information obtained from the buyer as well
as a request from the buyer for an accurate answer, to trigger the
need for an amendment so that the buyer could then back out. So,
for example, the buyer could point out question X wasn't answered,
or question Y was answered correctly and trigger the need for an
amendment (if true), allowing them to again able to back out for 3
days.<br>
</p>
<p>That would deal with the issue of sellers who put little or no
effort into answering the questions, and also deal with the
sellers who deceive. Either would be at risk of the buyer backing
out well into the transaction no matter the other terms of the
contract.<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 1/12/2022 5:42 PM, Catherine Clark
wrote:<br>
</div>
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<p class="MsoNormal">I have alerted friends who work with
brokers to the issue. I’ll be offering a report to the WSAJ
(where I am also a member) as part of its legislating efforts
this year. If you’d like your comments included (either
anonymously or with credit), please let me know.</p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">My thought is that while this is all a nice
try, it doesn’t matter because of the application of the
economic loss rule (alejandre v bull) and its molting into the
independent duty doctrine. Under Carlisle homes, fraud
survives such a challenge but negligent misrep and innocent
misrep were dispensed with.</p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Seems to me that if you want to give the
buyers some help, and limit the impact of Douglas v Visser on
Buyers (holding that where a buyer has notice of a defect,
they have a duty to make further inquiries of the seller in a
fraudulent concealment case; similar to the duty to inquire if
you find something funny recorded), you would do the
following:</p>
<p class="MsoNormal"><o:p> </o:p></p>
<ol style="margin-top:0in" type="1" start="1">
<li class="MsoListParagraph"
style="margin-left:0in;mso-list:l0 level1 lfo1">Remove the
“sellers actual knowledge language”</li>
<li class="MsoListParagraph"
style="margin-left:0in;mso-list:l0 level1 lfo1">Keep the
“don’t know” option.</li>
<li class="MsoListParagraph"
style="margin-left:0in;mso-list:l0 level1 lfo1">Add another
section that a buyer of real estate may make claims of
fraud, negligent misrepresentation or innocent
misrepresentation as a way out of Alejandre et al.</li>
<li class="MsoListParagraph"
style="margin-left:0in;mso-list:l0 level1 lfo1">Add another
section that the buyer has the right to rely on the
statements made in the disclosure statement and need not
inquire further (this exists in the common law as I
understand it when an affirmative statement of fact is
made—there are other cases on this).</li>
</ol>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">All comments welcome.</p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Thank you.</p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Catherine C. Clark</p>
</div>
<br>
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