The Puget Sound region is a great place to live and work, as reflected in the fast pace of growth over the past decade. More people coming to the region means we need more people working in skilled trades—to build housing, commercial space, infrastructure, and transportation projects.

Recently, the Master Builders Association of King and Snohomish Counties (MBAKS) partnered with Redfin to conduct a survey of homebuilders. The survey showed 82% have had difficulty finding qualified workers in the past year. In the same survey, the greatest skilled labor needs reflected in the housing industry are framing, carpentry, superintendents, and program management.

Workforce development continues to be a top priority for the residential building community in our growing regional economy. MBAKS works with schools and communities to provide background and shine light on the opportunities available in the homebuilding industry.

By Shannon Affholter, The Everett Herald

Despite numerous legislative efforts to find a permanent and balanced solution to address the Washington state Supreme Court's Hirst decision, lawmakers in Olympia remain deadlocked on the issue. Unfortunately, the legislature adjourned on Thursday without reaching an agreement.

The 2016 Hirst decision has effectively halted many people from building their homes in areas that depend on well water. The ruling has created a great deal of uncertainty for counties, rural communities, builders, and families across the state. As legislators leave town, the hardship on affected property owners will continue without being resolved.

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