Environmental Disclosure Issues
By Jim Palmer Jr.

Washington Disclosure Law requires property owners to provide a disclosure statement known to Realtors® as Form 17. The law is simple in its intent which is to provide buyers with uniform and straight forward disclosure concerning a variety of topics. Whether the property is commercial, residential or bare land, the section of each disclosure document that deals with environmental issues cannot be waived by a purchaser and must always be filled out by the seller.

Owners of repossessed properties, such as banks or other lenders, often refuse to complete such disclosure statements since they have never been to the property and in most cases cannot in good conscience represent any material facts concerning a property. This non-disclosure puts them at risk in the fact that buyers can use the three day rescission rule to escape the deal. This means that up to the date of closing buyers can walk away from the deal with no consequence. The law allows a buyer to waive the right to receive the disclosure, except that the environmental portion of this document can never be waived. Most lender/owners require that buyers sign the waiver portion, not realizing that they have still given the buyer a built in escape clause. Maybe they think losing a buyer is a better risk than attempting to represent facts they cannot verify.

The environmental portion of this five page document covers questions regarding flooding, standing water or drainage problems. It asks whether there has been any fill dirt placed on the property which could possibly be contaminated. Questions about previous uses often reveal information, such as whether there could be contamination from existing or previously used fuel tanks that had never been cleaned up. Other questions deal with electrical transmission lines or whether any radio towers interfere with cell phone usage.

The question that probably gets dodged by sellers most often is, “Has the property ever been used as an illegal drug manufacturing site.”  I’m not convinced that a land owner who has manufactured drugs would ever admit to that in writing! There is a case where it was proved that an owner knew a property had been used to manufacture meth but chose not to disclose even though the illegal act had been done by a previous owner. The newest owner had been sick for some time and finally found enough evidence hidden under layers of new flooring to prove her case.