Washington Seller Disclosures Apply To Commercial Transactions
Posted on Aug. 14, 2012

As commercial real estate lawyers, we think we are immune from state generated contract forms and in particular, the dreaded Seller disclosure form.  In what may be the leading edge of a trend, the State of Washington expanded its mandatory real estate disclosure requirements (RCW-64.06.005 et seq.) to apply to sellers of commercial real estate. 

The act specifies the format and content of the required disclosures (known as a Form 17).The seller must provide the disclosures within five business days after acceptance of a contract and the buyer then has the right to rescind the contract within three business days after receipt of the disclosures.  If conditions change or additional information is discovered, the seller must amend the disclosures and the buyer has an additional three business days to rescind (unless the seller corrects the condition at least three business days before closing).

According to the Act, disclosures are not required if a buyer expressly waives receipt of the disclosures.  However, if the answer to any environmental question (section 6) is yes, the buyer cannot waive that portion of the disclosures (seller must then provide answers and explanations for section 6).  The buyer can also waive the right of rescission.

If the seller fails to deliver the disclosure statement, the buyer can rescind the contract up through the closing.  However, if the buyer closes without having received the disclosure statement, the buyer no longer has any remedy for that failure.

The Act states that it does not create any new right or remedy for a buyer other than the right of rescission.  However, it is not clear that the Act would prevent a buyer from suing a seller for any false or misleading disclosures.

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jimAttorney James W. Peters

Jim has handled retail, distribution center, warehouse, storage facility and fuel center transactions from the eastern seaboard to the Pacific Coast and beyond.

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