I RECENTLY BOUGHT A HOME IN THE STATE OF WA IN KITSAP COUNTY, THE SELLER PROVIDED A DISCLOSURE STATEMENT BUT DID NOT DISCLOSE EXTENSIVE DRY ROT IN BOTH FRONT AND BACK STEPS. BOTH WERE VERY RECENTLY PAINTED TO COVER UP THE PROBLEM. WHAT IS THE PENALTY FOR NOT FULLY DISCLOSING? I HAVE HEARD IT IS FOUR TIMES THE COST OF THE REPAIR? WHAT IS THE WA STATE LAW I CAN USE TO RESOLVE THIS? MANY THANKS
Under Washington law, the seller of residential property must provide a statutory disclosure statement (Form 17) unless the buyer waives the requirement in writing. The buyer has five days (unless agreed otherwise) to review the statement and cancel the contract if not satisfied with the disclosures. This right of rescission is the only remedy provided by the statute. However, a buyer may have a claim for misrepresentation for written statements (including in the Form 17) that the seller knew were false or misleading. However, if the buyer knew of the inaccuracy prior to closing and went forward, he may have waived any right to damages. In any event, there is not any authority for quadruple damages.
You should consult with a real estate attorney knowledgeable in residential real estate who can review the earnest money agreement and Form 17, as well as other documents and facts, to evaluate how you should proceed.
PLEASE BE ADVISED: This answer and any information contained herein is not intended to be treated, and should not be construed, as legal advice. Rather, this answer is offered solely for general information purposes. This answer does not create an attorney-client relationship, nor does it create any kind of legal relationship, duty, or privilege. This attorney is licensed only in Washington.
Estate Planning Attorney
In addition to the seller's statutory duty to provide the completed Form 17 disclosure statement, the seller is obligated to disclose all material facts relating to the property known by the seller. The presence of extensive dry rot would appear to be a material fact. The next question is whether the seller knew or should have known of the dry rot. You will need to investigate and determine this. Find out who performed the painting and whether they notified the seller of the dry rot (unless, of course, the seller performed the painting).
Also, you should check to see if the seller had a professional inspection performed that the seller relied on in preparing the disclosure statement. If the seller's inspection did not reveal the dry rot, the seller has additional protection under the disclosure statement statute.
Washington law recently changed significantly relating to claims of misrepresentation involving the sale of residential real property. You will want to consult with an attorney familiar with this recent change in the law and who has experience handling disputes of this nature.