Comments on: NWMLS Form Changes

By: Kary L. Krismer

Kary L. Krismer — Wed, 03 Oct 2007 17:04:07 +0000

I was talking to an inspector about the cost of their insurance, and from that I’d assumed that their limitations didn’t really mean much. Either that, or the insurance companies are making a killing on such insurance.

By: Jim Reppond

Jim Reppond — Wed, 03 Oct 2007 16:39:38 +0000

All of the home inspectors we use have disclaimers that the Buyer (or person paying for the inspection) has to sign limiting their liability to the $ cost of the inspection. I think AAA Inspections also offers an “option” of additional liability coverage, but then the cost of the inspection goes up astronomically.

Of course, that doesn’t stop someone from suing anyway if they want to.

By: Kary L. Krismer

Kary L. Krismer — Wed, 03 Oct 2007 14:00:50 +0000

I wonder what home inspectors will think about this? If you have a contract with Form 17 liability, you have a greater likelihood of a lawsuit. If you have a lawsuit over Form 17 liability, the inspector is likely to be an additional defendant. Inspectors might start wanting to see the P&S agreement before they agree to perform an inspection.

By: ARDELL

ARDELL — Wed, 03 Oct 2007 06:25:20 +0000

Kary,

I think it’s time for a mutiny. I think it’s time for a consumer advocate legal group to decide what the contracts should look like.

By: Reba Haas

Reba Haas — Wed, 03 Oct 2007 06:18:33 +0000

With regard to utility payoffs by escrow, many escrow officers have mentioned over the past year or so that while in the past they were often able to pay off all utilities many places such as PSE and local utility providers (non-city owned) will no longer provide payoff info to escrow companies so they cannot perform that function. It is up to the buyer and seller to sort that out. We usually discuss this with our clients and remind them during the contract period that they need to call and transfer utilities in name at closing. We also try to send reminders to the other agent to remind them to tell their clients the same thing about closing out all utilities.

I’ll look forward to the class – the Seattle ones have booked out so we’ll be attending one of the others or when they schedule more of them locally.

By: Kary L. Krismer

Kary L. Krismer — Wed, 03 Oct 2007 04:18:23 +0000

The more I think about this Form 17 liability issue, the more I think it’s incredibly stupid.

The Washington State Legislature has not imposed any liability for Form 17 negligence (or even intentional errors).

The Washington State Supreme Court has not imposed any liability for Form 17 negligence.

But some attorney fails to prove seemingly decent claims for intentional or even fraudulent errors disclosing the condition of a septic system, and then unsuccessfully tries to fall back on negligence, and that the powers that be think needs to be corrected somehow. If anything needs to be changed it’s the law on proving intentional or fraudulent nondisclosures. That would be a job for the legislature.

One reason I don’t like this is the NWMLS hasn’t even formatted Form 17 properly. Look at question 1.B. It asks: “Is title to the property subject to any of the following?” and then has four subparts, each with an answer. But the question itself has a place for an answer, even though it shouldn’t be answered. So that’s five places to answer four questions! And if you look at the official form from the Legislature, there should only be one answer for all for subparts.

If buyers start insisting on liability (which I’ll resist) I think I’ll have my seller clients fill out the statutory form, which is much better formatted.

The prior version of the state form can be found here:

http://apps.leg.wa.gov/RCW/default.aspx?cite=64.06.020

By: Kary L. Krismer

Kary L. Krismer — Wed, 03 Oct 2007 04:01:54 +0000

I saw a redlined copy of Form 21 today, and paragraph h has language added which says: “Buyer is advised to verify the existence and amount of any local improvement district, capacity or impact charges or other assessments that may be charged against the Property before or after Closing. Seller will pay such charges that are encumbrances at the time of Closing, or that are or become due on or before Closing. Charges levied before Closing, but becoming due after Closing shall be paid as agreed in Specific Term No. 16.”

To me this means that’s the only thing that item 16 pertains to. It doesn’t even pertain to lienable utilities.

Unfortunately, that doesn’t seem to be what’s being taught in the classes, from what I’m hearing.

By: ARDELL

ARDELL — Mon, 01 Oct 2007 05:31:19 +0000

db,

No we can’t and if we didn’t not much would get done.

By: db

db — Mon, 01 Oct 2007 04:44:17 +0000

“Some thoughts for those who are drafting the NWMLS Forms to perhaps “broaden” the scope of utilities to be paid by escrow.”

Can agents/brokers in WA draft?

NC brokers cannot but it happens. I always wanted to break that rule and write in something silly like “buyer shall pay agent upon closing, 45 green M&Ms, 45 yellow, and so forth..” And yes, I am silly enough to sit and count but not silly enough to care if the seller overlooked that or missed one.

By: Kary L. Krismer

Kary L. Krismer — Mon, 01 Oct 2007 00:57:00 +0000

Ardell, I’d agree with your comments. I think they were trying to deal with specific situations and used language broad enough to arguably apply to anything that comes in the mailbox after closing.