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 because buyers want to know as much as possible about a property before they make such an important purchase. 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.
Although not a substitute for obtaining and paying for the advice and skills of a qualified expert in the appropriate field(s), this article will summarize the seller disclosure law requirements for residential real property in the state of Washington and provide you with resources for additional information.
Not every home seller is governed by this law. It applies only to sellers of “residential real property,” which refers to real property (land) consisting of between one and four residential dwelling units, including 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. (See, Revised Washington Code Section 64.06.005.) Commercial real estate is NOT covered by this portion of the law.
Even if the type of property being sold is covered by the law, sellers in certain situations need not make disclosures, including if they are making the transfer:
(See Revised Washington Code Sect. 64.06.010 for the complete list.)
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, Revised Washington Code Sect. 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.
Your seller disclosure statement must be made in writing on a standard form. If you are using a real estate agent, he or she will likely be able to provide you with a copy of the form. To see the language of what will be on the form for improved property, go to Section 64.06.020 of the Revised Washington Code. If you will be selling unimprovedresidential real property, you can view the language at Revised Washington Code Sect. 64.06.015.
The form will outline the minimum information required of you and also make it easier to ensure you do not forget important disclosure areas.
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.
A buyer may, in certain situations, waive the right to receive your disclosure statement. In certain situations however, the buyer may not waive receipt of the “Environmental” section of the seller disclosure statement.
As you’ll see on the form, the main categories of disclosure for selling your Washington home (“improved”residential real property) are:
1) Title and Legal – 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).
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.
4) Structural – Under this section, you must disclose things about the general structure of the building such as whether the roof has leaked, whether there are any defects with the chimney or the foundation, and how old the structure is.
5) Systems and Fixtures – This section requires you to disclose items that are being included with the property as part of the sale, such as the electrical system, the plumbing system, and the 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, 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 are required to disclose flooding, drainage problems, or material damage 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 (see, Revised Washington Code, Sect. 64.06.022).
Once you make your seller disclosures, you remain under an obligation to make sure your disclosures 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, Revised Code of Washington Sects. 64.06.040 and 64.06.015.)
Some sellers shy away from making complete disclosures, fearing that they will scare buyers away from the property or give rise to demands for a reduction in purchase price. Such fears are usually unfounded, however. For starters, not providing these disclosures may cause your ultimate home sale to fall through; if you fail to provide a prospective buyer with the disclosure statement, the buyer has a right to rescind the sale agreement.
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.