On July 26, 2009 amendments to the Seller Disclosure Act (RCW 64.06) go into effect. The amendments impact mandatory seller disclosures in both improved and unimproved residential real estate transactions. According to an analysis by a non-partisan legislative staff for the use of legislative members in their deliberations, the changes include:

The definition of “unimproved residential real property” is modified to exclude timber land.

A seller must amend the disclosure statement if the seller learns from a source other than the buyer of additional information or an adverse change that makes the disclosure inaccurate.

Unimproved Residential Real Property Disclosure Statement.
Several questions on the disclosure statement are modified in the title, flooding, soil stability, and environmental sections.

Title.
• The question regarding rights-of-way, easements, or access limitations is modified to ask whether they affect the buyer’s use of the property rather than “may” affect the buyer’s use of the property.
• The question relating to zoning violations, nonconforming uses, or any unusual restrictions on the property is modified to ask whether they affect future construction or remodeling rather than “would” affect future construction or remodeling.
• Rather than asking whether there are any covenants, conditions, or restrictions which affect the property, the question asks whether there are any recorded against the title.

Flooding, Soil Stability, and Environmental.
• Questions related to flooding, standing water, or drainage problems and fill dirt, waste, or other fill material are moved to the “Environmental” section.
• The question related to transmission poles is changed to ask whether there are transmission poles or other electrical utility equipment installed, maintained, or buried on the property that do not provide utility service to the structures on the property.
• The question related to radio towers is modified to ask for information about those that cause interference with cellular telephone reception.

Improved Residential Real Property Disclosure Statement.
Several questions on the disclosure statement are modified in the title, water, structural, systems and fixtures, and environmental sections.

Title, Water, Structural, Systems and Fixtures.
• Rather than asking whether there are any covenants, conditions, or restrictions which affect the property, the question asks whether there are any recorded against the title.
• A question is added about defects in the operation of the water system.
• Rather than asking whether the roof has ever leaked, the question asks whether the roof has leaked within the last five years.
• A question is added about whether the property has a wood stove, fireplace insert, pellet stove, or fireplace and whether the wood stove or fireplace inserts are certified as clean burning appliances to improve air quality and public health by the U.S. Environmental Protection Agency.

Environmental.
• A question is modified to ask whether there is any flooding, standing water, or drainage problems that affect the property or access to the property.
• A question is modified to ask about dirt, waste, or other fill material on the property.
• The question related to transmission poles is changed to ask whether there are transmission poles or other electrical utility equipment installed, maintained, or buried on the property that do not provide utility service to the structures on the property.
• The question related to radio towers is modified to ask for information about those that cause interference with cellular telephone reception.

See Final Bill Report SHB 1420 (http://apps.leg.wa.gov/documents/billdocs/2009-10/Pdf/Bill%20Reports/House%20Final/1420-S%20HBR%20FBR%2009.pdf).

In reviewing the changes, it seems that many of the questions that arguably drew upon ambiguous personal interpretation, belief, or state of mind have been simplified and call for fact answers. For example, the question “are there any rights-of-way, easements, or access limitations that may affect the buyer’s use of the property…” has been changed by deleting the word “may.” This makes a lot of sense. After all, who other than the buyer can really say if a right-of-way may affect his or her use of the property? The disclosure concerning covenants, conditions, or restrictions has been updated to simply ask if there are any CC&Rs recorded against title, with the words “that effect title” removed. How is a lay person to determine if a covenant effects title or not? Overall the amendments add clarity and precision to the seller’s disclosure obligations. More clarity should result in fewer lawsuits.

Sellers are supposed to furnish a disclosure document to buyers in compliance with RCW 64.06 within five days of presenting an offer. Buyer’s have three days to accept or rescind their offer. However, according to RCW 64.06.07, other than the right of recision prior to closing, RCW 64.06 provides no other remedy to a buyer if a seller fails to deliver a disclosure statement in a residential sale transaction.

The NWMLS has updated Form 17 for the sale of improved residential real property, Form 17C for the sale of unimproved real property, and Form 35, the inspection addendum. Any disclosure in a residential real estate sale after July 26, 2009 should be on the new NWMLS forms or derived directly from RCW 64.06 to comply with the new law.