Selling a Washington Home: What Are My Disclosure Obligations?

In the state of Washington, you, as a residential home seller, are required by law to disclose certain details about a residential property you are trying to sell. These disclosures are important to buyers, who want to know as much as possible about a property before they make such an important purchase.

This article will help you understand:

• your duties under Washington State law
• who does and doesn't need to fill out a disclosure form when selling real estate
• how to use Washington's standard disclosure form
• limitations on your duty to disclose
• by when you must deliver the disclosure statement
• federal disclosure requirements concerning the presence of lead in older homes
• what to do if things change after you delivered the disclosure statement, and
• your potential legal liability for failing to make accurate required disclosures in Washington.

What Washington Law Requires Home Sellers to Disclose

The history of a concept known as "caveat emptor" (or, "buyer beware") in real estate transactions led many states, including Washington in 1994, to pass laws mandating that sellers provide disclosures about all aspects of the property. You'll find these beginning at Revised Washington Code (RCW) § 64.06.005.

The obligation is stated simply, at RCW § 64.06.020: "In a transaction for the sale of improved residential real property, the seller shall...deliver to the buyer a completed seller disclosure statement in the following format and that contains, at a minimum, the following information..." (which it then specifies).

The statute offers two exceptions, for situations where:

• the buyer has expressly waived the right to receive the disclosure statement under RCW 64.06.010, or
• the transfer is otherwise exempt under RCW 64.06.010 (as described below).

Which Residential Sellers Do and Don't Need to Make Disclosures in Washington State?

Most, but not all Washington home sellers are governed by this law. It applies to sellers of "residential real property," meaning land with between one and four dwelling units, including condominiums (with some exceptions) and manufactured or mobile homes.

The law also covers unimproved residential real property if it is zoned for residential use but no residential units have yet been placed on it. Commercial real estate is NOT covered by this portion of the law, but a separate one.

Washington home sellers need not, however, make disclosures if the transfer will be:

• a gift to a spouse, domestic partner, child, parent, brother/sister, or child of a spouse or domestic partner
• between spouses or domestic partners in connection with a dissolution of the relationship (such as a divorce)
• made not by the owner, but the personal representative of the estate of someone who has died or a trustee in bankruptcy, or
• to a buyer who has had an ownership interest in the property any time within two years of the date of the transfer.

(See RCW § 64.06.010 for the complete list.)

How and When Washington Home Sellers Must Make Disclosures

Your seller disclosure statement must be made in writing on a standard form. If you're using a real estate agent, the agent will likely provide you with a copy. The form will outline the minimum information required and also make it easier to ensure you do not forget important disclosure topics.

Once you and the buyer have signed a written agreement for the sale of your property, you must deliver a copy of your completed disclosures to the buyer within five business days. The buyer can then either approve and accept the disclosure statement or rescind the agreement to purchase. They must advise you of that decision by written notice within the next three business days. (RCW § 64.06.030.)

A buyer may waive the right to receive your disclosure statement, but not the "Environmental" section of the seller disclosure statement if any of your answers to the questions there would be "yes."

What's Covered by the Washington Seller Disclosure Form

As you'll see on the form, the main categories of disclosure for selling your Washington home ("improved" residential real property) are:

1) Title – This section requires you to state that you have the legal authority to sell the property (the property must be in your name and no one else can have a right of first refusal, an option to purchase, a lease or rental agreement covering, or a life estate in the property). It also covers legal issues like easements and zoning violations.

2) Water – These disclosures involve things like the source of your household water (whether you have a well or obtain water from the public water system), whether the property receives irrigation water, and whether or not the property has an outdoor sprinkler system.

3) Sewer/On-Site Sewage System – Here, you must disclose details about what type of sewage disposal system the property utilizes, and various fee and permitting issues.

4) Structural – You must disclose things about the general structure of the building such as its age, whether the roof has leaked, whether there are any defects with the chimney or the foundation, and whether you've had pest infestations.

5) Systems and Fixtures – This section requires you to disclose items that are being included as part of the sale, such as the electrical system, plumbing system, and hot water tank. You must also disclose any defects with any of these included items, and state whether your property has smoke alarms.

6) Homeowners' Association/Common Interests – If your property is a condo or part of some other development that's governed by a homeowners' association (HOA), you will need to say so, provide contact information for the person who can give the buyer copies of the relevant documents, and state whether there are any common areas or joint maintenance agreements for shared features of the property like walls, fences, or landscaping.

7) Environmental – Here, you must disclose flooding, drainage problems, or material damage or contamination to the property due to events such as fire, earthquakes, or landslides.

8) Manufactured and Mobile Homes – If the property includes a manufactured or mobile home, you'll need to make a few additional disclosures regarding any alterations made to the unit.

9) Full Disclosure by Sellers – This is the ‘catch-all' provision, emphasizing the importance of these disclosures: If there is anything that could affect the property that you have not covered by the categories already addressed and that the buyer "should know about," you must disclose it here.

You will have fewer things to disclose if you are selling a new home that has never been occupied. For instance, you would not be required to disclose certain things regarding the structure itself (under Section 4 of the form) or items pertaining to systems and fixtures (Section 5 of the form).

For unimproved residential real property the categories are similar, although the form, of course, leaves out matters regarding structure, systems, fixtures, and so on, and adds sections on some basic matters such as soil stability and the availability of utility services.

A few additional seller disclosures are required for sales of land that is in close proximity to a farm or working forest (see, RCW § 64.06.022).

How Much Detail Must You Provide in Your Disclosures?

Importantly, the disclosure form requests only information about "material" facts or defects. This term is defined as "information that substantially adversely affects the value of the property" or the buyer's "ability to perform its obligations," or operates to materially impair or defeat the purpose of the transaction." (RCW § 18.86.010.)

The statute adds that sellers need not disclose "the fact or suspicion that the property, or any neighboring property, is or was the site of a murder, suicide or other death, rape or other sex crime, assault or other violent crime, robbery or burglary, illegal drug activity, gang-related activity, political or religious activity, or other act, occurrence, or use not adversely affecting the physical condition of or title to the property," because these are not "material."

Finally, you have no legal duty to investigate or provide a potential buyer with information regarding the presence or lack of registered sex offenders near your property. (See, RCW § 64.06.021.) Buyers may look up this information on their own, however. A federal law known as "Megan's Law" compels the states to make information on the location of registered sex offenders available to the public. If you want to see what buyers may be looking up in your area, go to the Washington Association of Sheriffs and Police Chiefs website.

If Changes Occur After You've Given Washington Homebuyer the Disclosure Form

Once you make your seller disclosures, you remain under an obligation to make sure they remain accurate until closing. If you learn, from anywhere other than the buyer or someone acting on the buyer's behalf, about any change in circumstance or condition that makes any of your prior disclosures inaccurate, then you must update your disclosure form and deliver the amended statement to the buyer.

You need not, however, amend and redeliver your disclosure statement if you take whatever action is necessary to correct the new issue so that your disclosure statement, as originally made, is once again accurate. You have until three business days prior to the closing date to take care of this. (See, RCW § § 64.06.040 and 64.06.015.)

Federal Law Requiring Lead Disclosure

Federal law requires disclosure of potential lead paint hazards for houses built before 1978, and to give buyers an EPA pamphlet, as described in Seller Responsibility to Disclose Lead-Based Paint Hazards.

Legal Risks If You Don't Make Complete Disclosures to Washington Home Buyer

Seller disclosures are an important part of the typical home sale in Washington State. Unless the buyer has specifically waived receiving the form (which rarely happens), the statement is almost always required. What's more, the purpose of these seller disclosures is not to judge whether or not your property is "perfect." Many homes have sustained some sort of damage throughout their existence, and buyers know that.

The purpose of providing these disclosures is to give a potential buyer the information needed to make an informed decision about purchasing a property that, whether in its current condition or after a few necessary fixes, can provide the buyer with something they can enjoy, and something you can feel confident selling. The more you disclose, the more the buyers can trust that they're entering into the transaction with full knowledge of what's ahead.

The statute actually contains language to reassure sellers that they won't be liable for any "error, inaccuracy, or omission" in the disclosure statement if they seller had no actual knowledge of these. By the same token, however, you can expect that buyers could find grounds upon which to sue if you lie, conceal, or knowingly put inaccurate information into your disclosure fraud, whether based on the statute or on a legal theory of fraud.