I attended a Forms Update Training Class put on by the NWMLS recently and learned about a bunch of changes that are coming down the pike on October 15, 2007. And while I posted some class notes and sample Purchase and Sale Agreement documents over on my site, I thought I’d summarize things below.
- Coldwell Banker Bain (and I assume others) will drop the usage of their “own” optional clauses forms which will make co-op transactions smoother and easier for all agents.
- Lots of discussion was given to the Washington State Supreme Court decision Alejandre v. Bull, which was the impetus for many of these changes. I won’t bore you with the details here. But they ruled “economic loss rule” prohibits the Buyer from suing the Seller for negligent misrepresentation regarding the condition of real property when the parties relationship is governed by a contract. The courts want to see the allocation of risk of economic loss in the Purchase and Sale Agreements – Hence the changes.
Purchase and Sale Agreement
- Legal description must be attached as Exhibit A
- No more counter-offer expiration date (use the counter-offer form)
- Paragraph 9 – Buyer to waive or not waive the right to remedy in Form 17
- Homeowners Policy is new default in P&S
- Closing date and Possession date same – or use NWMLS forms 65A or 65B
- New provisions address charges and assessments against the property
- Page 5, item x: 10 day contingency for buyer to verify all information provided by Seller or Listing Agent.
These have been in effect since July, but for clarification sake were covered in the updates class. There are several changes here, but the “Environmental Section” is the main one. Buyer can still waive the right to receive unless one of the items in the Environmental Section is checked yes. In that case, the form can not be waived.
As a side note, foreclosure properties are no longer exempt. No one has a clue why the legislature took that one out.
- Buyer must seek Sellers consent to change lender or loan type after loan application period lapses (usually 5 days)
- Adds changes for “Environmental” Changes of Form 17
- Advises Buyers to do septic inspection (NWMLS Form 22S)
- Neighborhood Review Contingency is back
Optional Clauses Contingency
- Utilities broadened to include others
- Selling Office Commission moved to NWMLS Form 41C
- Seller to produced HOA documents if available