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<p>The buyer already has the information in their inspection report,
so they don't need it. The disclosure statement law has long
provided that the seller does not need to disclose information
that they learn from the buyer's inspection report--on that
transaction, as opposed subsequent transactions where they somehow
learned of the inspection results.<br>
</p>
<p>As to your hypothetical second buyer that did not do an
inspection, that is entirely their problem and a direct result of
not having done an inspection. If their inspector missed it, that
would definitely be a different issue, but there the fault would
possibly lie with the inspector (assuming they are also a pest
inspector, which few are these days).</p>
<p>As to your <span style="font-size:12.0pt">Eaton v Strasburger
case, that is California law. I'd suggest looking at
18.86.030(1)(d) and (2) for Washington law, as well as reading
Douglas v. Heller as well as Jackowski v. Borchelt. But simply
put, there is nothing in Washington law that I'm aware of that
requires sellers or brokers to go looking for issues, and if
they were required to look at a buyer's inspection report that
would be a huge impediment to allowing the inspection in the
first place (Ignoring the protections fo Douglas v. Heller and
Alejandre v. Bull given in allowing inspections).</span></p>
<p>Finally, it's not so easy to just determine what in an inspection
report is material, immaterial or outright false, and legal
liability could result from making such a determination.<br>
</p>
<pre class="moz-signature" cols="72">Kary L. Krismer
206 723-2148</pre>
<div class="moz-cite-prefix">On 9/28/2022 9:21 AM, Erik Marks wrote:<br>
</div>
<blockquote type="cite"
cite="mid:7110D4D7-1CBD-410B-A91A-174F14B64BE8@egmrealestate.com">
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<p class="MsoNormal"><span style="font-size:12.0pt">Kary,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Thanks for
the response. I don’t disagree with you that it is
practical for the Seller, and Seller’s broker, to avoid
looking at the Inspection Report. What I am saying,
however, is that choosing to not look at the Inspection
Report seems to me to be a violation of the duty imposed on
the Seller’s broker to review readily available information
about the property they are selling, and to disclose to the
Buyer all information obtained that is material. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"> The
Seller’s Broker definitely could reject statements in the
report as being inaccurate, exaggerated, incomplete, or
similar, and therefore deem then immaterial and not in need
of being disclosed. But intentionally avoiding receipt and
review of an inspection report that is known to exist goes
much further than that. For example, what if the Seller is
unaware that they have an extensive termite problem that has
compromised the structural integrity of the house; the first
buyer’s inspector discovers this and reports on it and the
buyer terminates the based on conditions discovered during
the inspection by Acme Inspection Co, but providing no
detail; the house is then sold to a second buyer, who waives
the inspection contingency, and discovers the termite
problem after closing. It seems to me that the second buyer
would have a claim, under the reasoning in Eaton v
Strasburger, that the Seller’s broker breached her duty to
avail herself of readily available information about the
property when she deliberately avoided looking at a report
about the condition of the property that she was listing for
sale.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Erik<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<div style="border:none;border-top:solid #B5C4DF
1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span
style="font-size:12.0pt;color:black">From: </span></b><span
style="font-size:12.0pt;color:black">Kary Krismer
<a class="moz-txt-link-rfc2396E" href="mailto:krismer@comcast.net"><krismer@comcast.net></a><br>
<b>Date: </b>Wednesday, September 28, 2022 at 7:05 AM<br>
<b>To: </b>WSBA Real Property Listserve - email to post
<a class="moz-txt-link-rfc2396E" href="mailto:wsbarp@lists.wsbarppt.com"><wsbarp@lists.wsbarppt.com></a>, EGMRealEstate
<a class="moz-txt-link-rfc2396E" href="mailto:erik@egmrealestate.com"><erik@egmrealestate.com></a><br>
<b>Subject: </b>Re: [WSBARP] NWMLS Form 35 now prohibits
disclosure of inspection report???<o:p></o:p></span></p>
</div>
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:Helvetica;color:#333333">Yes,
it's been that way for some time, with the most recent
version providing a waiver of the inspection contingency.
<o:p></o:p></span></p>
</div>
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:Helvetica;color:#333333"><o:p> </o:p></span></p>
</div>
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:Helvetica;color:#333333">It's
a good change because: (1) The seller did not pick the
inspector, and the inspector may be an idiot; (2) The
buyer will use it to blackmail the seller; and (3) It
creates disclosure headaches for the seller if the deal
falls through. <o:p></o:p></span></p>
</div>
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:Helvetica;color:#333333"><o:p> </o:p></span></p>
</div>
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:Helvetica;color:#333333">I
once spent considerable time verifying the proper flashing
with the contractor and architech, where the inspector
didn't know his stuff. Later I discovered an obvious
siding defect the inspector missed. Both would have
required work that would have cost $20-30k, but the
former was unnecessary. <o:p></o:p></span></p>
</div>
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:Helvetica;color:#333333"><o:p> </o:p></span></p>
</div>
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:Helvetica;color:#333333">Kary
L. Krismer <o:p></o:p></span></p>
</div>
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:Helvetica;color:#333333">John
L. Scott, Inc. <o:p></o:p></span></p>
</div>
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:Helvetica;color:#333333">206
723-2148 <o:p></o:p></span></p>
</div>
<blockquote style="margin-top:5.0pt;margin-bottom:5.0pt">
<div>
<p class="MsoNormal">On 09/27/2022 5:29 PM Erik Marks
<a class="moz-txt-link-rfc2396E" href="mailto:erik@egmrealestate.com"><erik@egmrealestate.com></a> wrote: <o:p></o:p></p>
</div>
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div>
<p class="MsoNormal"
style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">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. <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">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?<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">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. <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">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 3<sup>rd</sup> 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. <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
don’t get it…. Thank you to anyone who has special
insight on this issue to share.<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">Erik<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"><o:p> </o:p></p>
<p class="MsoNormal"
style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span
style="font-size:10.5pt;color:black">-- </span><o:p></o:p></p>
<p class="MsoNormal"
style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><em><b><span
style="font-size:10.5pt;font-family:"Arial",sans-serif;color:#4D573A">Erik
G Marks</span></b></em><span
style="font-size:10.5pt;color:#4D573A"> </span><o:p></o:p></p>
<div>
<p class="MsoNormal"
style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><em><b><span
style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#4D573A">Attorney
at Law</span></b></em> <span
style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black"><br>
PO Box 16247</span><o:p></o:p></p>
<p class="MsoNormal"
style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span
style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black">Seattle,
WA 98116</span><o:p></o:p></p>
<p class="MsoNormal"
style="mso-margin-top-alt:auto;margin-bottom:12.0pt"><span
style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black"> <br>
(206) 612-8653<br>
</span><u><span
style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue"><a
href="mailto:erik@egmrealestate.com"
moz-do-not-send="true"><span style="color:#0563C1">erik@egmrealestate.com</span></a></span></u><o:p></o:p></p>
<p class="MsoNormal"
style="mso-margin-top-alt:auto;margin-bottom:12.0pt"><span
style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black">Physical
Office:<br>
4220 SW Spokane St<br>
Seattle, WA 98116</span><o:p></o:p></p>
</div>
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style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><o:p> </o:p></p>
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