A home is more than bricks and sticks. Under the law and project documents summarized below, a complex bundle of rights and obligations are imposed upon the buyer and builder.

Why is disclosure a buyer’s best friend? The best consumer protection the law can provide is ensuring an opportunity to acquire an understanding of the products being purchased. This is difficult to achieve, however, because of the complex bundle of rights and obligations being obtained.¹

A builder wants a buyer to buy—but only what the builder is selling; not what a buyer mistakenly hopes or believes is being sold. To avoid post-closing disputes, a builder needs clear guidance to describe what is being sold (the complex bundle of rights and obligations).

The Washington Condominium Act (WCA, RCW 54.34, for condominiums) and Land Development Act (LDA, RCW 58.19, for subdivisions) require a Public Offering Statement (POS) containing mandatory specific information. The objectives fostered by this approach include: providing guidance for POS contents; promoting clear and concise POS’s; encouraging buyers to read and understand; avoiding irrelevant, ambiguous, and confusing disclosures; avoiding a false sense of security that lengthy POS’s contain all relevant information; promoting uniform POS’s; facilitating project comparison; enabling POS preparation at reasonable cost; facilitating obtaining legal opinions; and decreasing the need for state agency review. The WCA-POS is mandatory. The LDA-POS is often not required because of various exemptions (e.g., lot is improved with, or builder is under contract to build, a house). But, an LDA-POS may be given voluntarily. ^{1, 2}

The WCA/LDA disclosures involve three components: cautions to buyers, topics covered, and documents delivered. To avoid post-closing disputes, WCA/LDA POS’s provide the following cautions: buyer has a cancellation period; buyer may only rely on seller representations and express warranties contained in the POS or a writing signed by seller; buyer may not rely upon agent’s promises; POS is only a summary of some significant aspects of the home; documents are complex, contain other important information and create binding obligations; and buyer should seek legal counsel assistance. ²

The topics covered by the POS include: community name and address; developer and management company name, address and relationship; nature of interest being purchased; permitted and restricted uses; number of homes; principal amenities; limited common areas; land the owners and others may access; construction status; association and owner maintenance; owner's assessments; other dwelling fees; governmental assessments; blanket encumbrances; developer’s rights; model homes; association liens; physical hazards; construction warranties; building code violations; association litigation; association insurance; documents delivered; insulation data; and Form 17 environmental disclosures. ²

The documents delivered with the POS include: public offering statement; declaration; plat/survey map; HOA articles; HOA bylaws; HOA rules; HOA balance sheet; HOA annual budget; and construction warranty. ²

The Form 17 Seller Disclosure Statement (provided for under RCW 64.06) creates problems for sellers— the questions are subjective, subject to multiple interpretations, provide grounds for litigation, and are not well designed for builder project sales. Buyers may waive, and builders need not provide, a Form 17. Builders should give either a WCA or LDA POS in lieu of a Form 17—builders are not avoiding disclosures, but are providing disclosures more appropriate for project sales. However, the builder must provide in the POS the Form 17, Section 7 Environmental Disclosures if any question would be answered YES. ³

A single Disclosure Book, with Acknowledgement Addendum, should be used, and contains: POS and documents; delivered when PSA signed; makes disclosures a part of buyer’s contract; avoids document delivery hassles; assures that buyer gets disclosures; and makes proof of delivery easier.

The builder’s Addendum to the Purchase and Sale Agreement should provide for buyer’s waiver of the Form 17 and acceptance of the builder’s alternative Disclosure Book.

Endnotes: ¹ WCA Comments; ² RCW 64.34.400, 405 & 410 and 58.19.030, 045 & 055; ³ RCW 64.06.

Author: James C. (Pete) Middlebrooks, owner of the Law Office of James C. Middlebrooks, provides comprehensive services to individual, corporate, and institutional clients on residential and commercial real estate development, land use, acquisition, investment, and financing.

423.252.2693  |  pete@jcmiddlebrooks.com

Contact: data@mbaks.com

While home prices are falling month-over-month, they are still higher than where they were a year prior. In King County, single-family median home prices are up 12.22% from November 2021, and in Snohomish County they are up 5%.

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It feels different here. We're at the office, talking shop. Moving past the acoustic guitar and AC/DC record (yes, record), you get a sense that these guys and gals are doing something cool and modern—so modern, in fact, that the industry has yet to catch up. It makes sense that there's a guitar in the office because this team strums to the tune of their own chords, setting new standards in homebuilding and daring anyone to do the same. Welcome to Green Canopy Homes.

BEATRICE (THEY NAME THEIR HOMES)

We're on the roof of "Beatrice" now, overlooking Lake Washington and Bellevue on one side, with a clear shot of the Smith Tower in Seattle on the other. But enough about the view—we're standing on top of building science. The guts of this home will soon be filled with enough gadgetry to wow even the most ardent tech geek, delivering cleaner air, more efficient heating, and an overall sense of innovative superiority.

Driven by the Built Green® checklists, along with meticulous Quality Control Inspection Checklists (QCIC) of their own, every Green Canopy job site is synchronized via iPads that deliver real-time project management tracking and communication. This process ensures that critical updates are made and that any mistakes don't happen twice. It's all about getting better here, from process to parts. Better homes lead to a better brand, which in turn provides validation for that tree logo on the front of each Green Canopy-certified home.

"That tree logo," by the way, is there for much more than feng shui. Turning residential homebuilding innovation into an industry strength is made possible by Value, Innovation, Beauty, and Efficiency, or VIBE, the way Green Canopy sees it. Their brand is secured—not grounded—by these four "roots," seen literally on the face of each home, welcoming owners and guests into the future of home living. And if a home doesn't meet the rigorous checklists, then it doesn't receive the logo. In other words, this brand delivers.

THE GENESIS OF BETTER BUILDING

Let's take a step back to a sleep-deprived evening in 2008. Owners Aaron Fairchild and Sam Lai had both recently welcomed their newborns, and through their giddiness came the idea for Green Canopy Homes. After trademarking their moniker, they went to work on answering a simple question: Are we making a difference? Heady question, but these guys wouldn't have it any other way. They're looking to create history.

Of course, history is defined by change and nobody knows that better than this crew. They don't throw history out, however; in fact, they embrace it in all its past beauty. Case in point; each project they take on comes with the name of an iconic and typically historical female figure. "Beatrice" is named after Beatrice Simms, founder of Seattle's chapter of Colored Women's Clubs. Each project's story continues long after the team leaves, too, as Lai envisions his future homeowners living, laughing, and growing up healthier and happier inside their Green Canopy home.

After a familial chat with the project managers, in conversation outside of Beatrice, Lai finishes his point on home efficiency by comparing vehicle MPGs to home efficiency ratings. "Hopefully my kids will think about their home MPGs in the same way (as their vehicles')," he says, almost as an afterthought. "I guarantee you they will," quips Fairchild, never one to miss a beat. The attention to detail is strong.

Those who know Aaron Fairchild may know his father, who knew everyone. Aaron worked at his father's bank from 1995 to 2008, refining his financing skills and using his area residential homebuilding experience to put investors in a place where they could succeed and do so without sacrificing values. One day, at the height of the financial crisis, Fairchild decided it was time to enter the real estate industry. Why? Human reasoning can be a tricky thing to grasp, but a simple analogy sums up his thought process: this was his chance to build something beautiful from the crash.

CHANGE WAS COMING

Of course, cultivating said change means planting the right seeds in the right place. In this case, it means building sustainability in the cultural center of the Northwest, the greater Seattle and Portland areas. Green Canopy has sprouted roots in some of the most visible and dense areas of the Puget Sound region, spanning a diverse price range. Built Green-certified homes, like the ones Green Canopy specializes in, now make up 57 percent of all residential homes built in the soil-rich Seattle area. The roots of change are spreading—must be all the rain.

BACK TO THE FUTURE

At the Earth 6 property in Delridge, consisting of six detached single-family units, Fairchild fervently points out features, describing the living area as "Volkswagen luxury," inside the well-sealed envelope construction of the home. Green Canopy projects that go on the market in the low $400,000 range, such as the Earth 6 units, contain features not typically found at that price, and both Fairchild and Lai are quick to point out that they have had help in being able to spread the technology around. In steps the Washington State Housing Finance Commission (WSHFC), without whom, Green Canopy would not have been able to build the Earth 6 homes the way they wanted to. The WSHFC has helped builders like Green Canopy deliver deep energy efficiency to homes of all shapes and sizes, allowing lower-end residences to experience the joy of high efficiency ERVs, eco panels, and 230 percent more efficient heat pumps creating compressed energy with the intensity of "high schoolers on the dance floor" (another Fairchild classic), just like they do inside million-dollar homes. In WSHFC, Green Canopy sees a like-minded ally, not afraid to think outside the box and take measurable risks to achieve their mission. In their own words, green innovation within the building industry typically "hasn't been a strength," though Fairchild and friends are working on that.

It helps, too, that everyone on the team actually talks the talk when it comes to living green. Lai literally lives and breathes his product, living in a home he collaboratively designed and built himself. Hanging around the crew, especially Lai and Fairchild, it becomes immediately apparent that they really do mean it when they say they want to change the residential homebuilding industry—whether everyone likes it or not.

Cue the chatter of neighbors opposed to modern "monstrosities" being erected in their neck of the woods. Fairchild combats allied neighborhood fronts by simply sitting residents down and talking to them like the people they are, and giving them some say in what they have to look at every day. The loudest typically direct the majority at these gatherings, Fairchild points out, so Green Canopy gives individuals the option to go online and fill out a survey on features like exterior color and roofline shape, which will then influence the design direction Green Canopy takes. The home is then built according to plan—with slight alternations to paint and slope.

When asked whether or not this is enough to satisfy opposed residents, Fairchild counters the clash with reason: "We hold meetings for existing residents even before buying the property, to talk with them and see if building there (in a particular neighborhood) would be a good fit in the first place. If we think it is not right for us, we explain that another builder will eventually buy this land, and they probably won't engage the community at all."

Fairchild also discusses obstacles within the rebuilding process, explaining why he and Green Canopy have moved away from full-gut remodel projects: Persistent frustrations with an elongated plans review process of remodel permits have in the past delayed projects to the point where they "just aren't worth the trouble," he says. Ever the mender, however, he has recently taken a seat on the MBA board, where he hopes to further influence political decision-makers in our region. By engaging the public and manning the front lines of influential industry committees to squash issues before they become problematic, Green Canopy is winning before nail one is hammered.

Inevitably, when one tours a Green Canopy home, the question arises: "Can you do this for us?" With a few more of those questions answered, things won't feel so different anymore.

Cue the guitar.