[Legislativecommittee1] HB1081 and HB1075

Fri Dec 20 15:15:13 PST 2024

Maureen,

I can take a look at this Monday and send comments/redlines.

Michelle Taylor
Area Underwriting Counsel
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First American Title Insurance Company
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Direct: 206.615.3050
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Email: mjtaylor at firstam.com<mailto:mjtaylor at firstam.com>

Should we receive emailed wiring instructions please understand that we will need to telephone a trusted individual to confirm the authenticity of the instructions prior to releasing the wire.  The safety of your funds is important to us and with wire fraud on the rise we do want to add a layer of protection.

From: Legislativecommittee1 <legislativecommittee1-bounces at washingtonlandtitle.com> On Behalf Of Maureen Pfaff
Sent: Friday, December 20, 2024 2:43 PM
To: George <execdirector at washingtonlandtitle.com>; legislativecommittee1 at washingtonlandtitle.com
Subject: [External] Re: [Legislativecommittee1] HB1081 and HB1075

Thank you for jumping in on this, I see those additions now George.

I meant for my earlier email to go out to the entire committee.  This bill feels like a response to a constituent's bad experience selling a house to one of the outfits that buy properties on a wholesale contract, it looks good on the surface - who would be against extra protections for unsophisticated sellers? - but implementing it in any meaningful way seems unlikely without some way to get the word out to sellers.   I'm still trying to understand how the people who would fall under this new rule let alone those who they are trying to protect, will even know it exists. It would make more sense if the bill was proposing to create a new PSA for solicited real estate transactions not involving Realtors but, again, how would these transactions be identified since the people involved are not licensed in any way so it's not as if they can be notified of the new rule?

And I agree with JP and Megan's comments from the other day that we should address the Interpleader rules and try and get some safe harbor language in the bill as I don't want our LPO's to be put in the position of policing these contracts and I wouldn't want insurers open to claims if the transaction went through without these specific items properly addressed in the PSA because we didn't know it was a "solicited purchase" that fell under this rule.  Maybe I'm making a big deal out of nothing, but I wanted to ask the questions that popped into my mind as I reviewed the proposed legislation.

@legislativecommittee1 at washingtonlandtitle.com<mailto:legislativecommittee1 at washingtonlandtitle.com> - do any of our attorney members (or others) have thoughts on this?  I'm not sure what safe harbor language would be best, definitely not my area of expertise.  I don't think we would want to include any language requiring us to ask for proof of compliance, but I also don't think we want legislation on the books that will leave us open to claims if we close a transaction that fell under these rules without our knowledge.  Obviously if the buyer is a "We Buy Homes for Cash LLC" type entity we would be tipped off that those elements might need to be present, but it still wouldn't be cut and dried because it would only apply if the property hadn't been actively offered for sale when the offer was made to the seller.  There are also transactions where a random individual walks up and knocks on the door of a home and solicits the homeowner to sell the property and there would be nothing to alert us to that being the case unless someone in the transaction tells us.

Maureen

________________________________
From: George <execdirector at washingtonlandtitle.com<mailto:execdirector at washingtonlandtitle.com>>
Sent: Friday, December 20, 2024 11:53 AM
To: Maureen Pfaff <maureen at olypentitle.com<mailto:maureen at olypentitle.com>>
Subject: Re: [Legislativecommittee1] HB1081 and HB1075

I agree.

I did add a new section 5 about interpleaders. The first sentence probably more important than the second. Wasn't sure if the statute should say anything about LPOs asking for proof of compliance so maybe the second sentence shouldn't be included.

Do you think the first sentence provides sufficient safe harbor language? I didn't want to single out LPOs as the only ones to be protected.

George
Sent from my mobile phone 206-437-5869

________________________________
From: Maureen Pfaff <maureen at olypentitle.com<mailto:maureen at olypentitle.com>>
Sent: Friday, December 20, 2024 9:33:48 AM
To: George Peters <execdirector at washingtonlandtitle.com<mailto:execdirector at washingtonlandtitle.com>>
Subject: Re: [Legislativecommittee1] HB1081 and HB1075

This feels like a response to a constituent's bad experience selling a house to one of the outfits that buy properties on a wholesale contract, it looks good on the surface but implementing it in any meaningful way seems unlikely without some way to get the word out to sellers.   I'm still trying to understand how the people who would fall under this new rule and those who they are trying to protect will even know it exists. It would make more sense if the bill was proposing to create a new PSA for solicited real estate transactions not involving Realtors but, again, how would these transactions be identified since the people involved are not licensed in any way so it's not as if they can be notified of the new rule?

And I agree with Megan's comments from the other day that we should try and get some safe harbor language in the bill as I don't want our LPO's to be put in the position of policing these contracts and I wouldn't want insurers open to claims if the transaction went through without these specific items properly addressed in the PSA because we didn't know it was a "solicited purchase" that fell under this rule.

________________________________
From: Legislativecommittee1 <legislativecommittee1-bounces at washingtonlandtitle.com<mailto:legislativecommittee1-bounces at washingtonlandtitle.com>> on behalf of George Peters <execdirector at washingtonlandtitle.com<mailto:execdirector at washingtonlandtitle.com>>
Sent: Thursday, December 19, 2024 5:54 PM
To: '1 WLTA Legislative Committee' <legislativecommittee1 at washingtonlandtitle.com<mailto:legislativecommittee1 at washingtonlandtitle.com>>
Subject: Re: [Legislativecommittee1] HB1081 and HB1075

I took a stab at this. Not sure if everything is needed, but I did think it was important to clarify that later references to a purchase contract ties to a specific contract between the buyer and seller. I also think "currently publicly available" and "the real estate market" are vague terms.... And I don't know if you can "solicit" property so maybe that phrase can be changed.

These suggested changes & my comments are in the attached redlined document and I don't know how they'd be transmitted to whomever we might want to send them to.

No pride of authorship here...maybe too much to ask for; I'm just throwing it out for our discussion.

George

George Peters, WTP

Executive Director

Washington Land Title Association

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This is a confidential communication intended solely for the named recipient. If you are not the intended recipient, please destroy it and call George Peters at 206-437-5869 immediately. Thank you.

From: Legislativecommittee1 <legislativecommittee1-bounces at washingtonlandtitle.com<mailto:legislativecommittee1-bounces at washingtonlandtitle.com>> On Behalf Of Jp Kissling
Sent: Thursday, December 19, 2024 1:37 PM
To: Maureen Pfaff <maureen at olypentitle.com<mailto:maureen at olypentitle.com>>
Cc: '1 WLTA Legislative Committee' <legislativecommittee1 at washingtonlandtitle.com<mailto:legislativecommittee1 at washingtonlandtitle.com>>
Subject: Re: [Legislativecommittee1] HB1081 and HB1075

It appears that we are going to be asked for a formal amendment to the bill is there someone willing to work on that?  I will help where I can.

From: Maureen Pfaff <maureen at olypentitle.com<mailto:maureen at olypentitle.com>>
Sent: Thursday, December 19, 2024 11:52 AM
To: Jp Kissling <jpkissling at fitico.com<mailto:jpkissling at fitico.com>>
Cc: '1 WLTA Legislative Committee' <legislativecommittee1 at washingtonlandtitle.com<mailto:legislativecommittee1 at washingtonlandtitle.com>>
Subject: Re: HB1081 and HB1075

>From an escrow standpoint it seems like this bill would put the burden on us to confirm several things:

  1.  Is the transaction the result of a solicited offer that meets the criteria of the legislation?
  2.  Are the specific items included in the contract in at least 10 pt font?
  3.   Did the seller affirmatively acknowledge the items?
  4.   Were the timelines for requesting an appraisal or waiving the appraisal right met?
  5.   Were the timelines for cancellation without penalty or further obligation met?

Most of these (other than maybe the font size) would be reasonably easy to confirm, we do this regularly in reading contracts to be sure that requirements have been met and/or waived.  I think that if the cancellation notice met the stated requirements in the contract there would be no need to interplead.  Interpleading would come into play if the contract was rescinded outside of the stated timeline and then it would be handled as usual - mutual agreement or we would have to interplead.

What concerns me is that we will have to determine if the sale is the result of a solicited offer or not in order to even know that these rules apply.  Sometimes it's obvious, but not always and we all know how confusing these type of nuances can be for the general consumer.

________________________________

From: Jp Kissling <jpkissling at fitico.com<mailto:jpkissling at fitico.com>>
Sent: Thursday, December 19, 2024 11:02 AM
To: Maureen Pfaff <maureen at olypentitle.com<mailto:maureen at olypentitle.com>>
Cc: '1 WLTA Legislative Committee' <legislativecommittee1 at washingtonlandtitle.com<mailto:legislativecommittee1 at washingtonlandtitle.com>>
Subject: RE: HB1081 and HB1075

they have the right to cancel the contract within 4 days of receiving the appraisal without penalty or further obligation.

From: Jp Kissling
Sent: Thursday, December 19, 2024 10:01 AM
To: Maureen Pfaff <maureen at olypentitle.com<mailto:maureen at olypentitle.com>>
Cc: '1 WLTA Legislative Committee' <legislativecommittee1 at washingtonlandtitle.com<mailto:legislativecommittee1 at washingtonlandtitle.com>>
Subject: RE: HB1081 and HB1075

I feel we also need to have some clarification on the earnest money and how/ if,  it will affect our ability to interplead funds RCW 64.04.220.

From: Legislativecommittee1 <legislativecommittee1-bounces at washingtonlandtitle.com<mailto:legislativecommittee1-bounces at washingtonlandtitle.com>> On Behalf Of Maureen Pfaff
Sent: Thursday, December 19, 2024 9:43 AM
To: legislativecommittee1 at washingtonlandtitle.com<mailto:legislativecommittee1 at washingtonlandtitle.com>
Subject: [Legislativecommittee1] HB1081 and HB1075

We still need a review of HB 1075 if anyone has a few minutes to take a look at it.

I reviewed HB 1081 but have a couple of questions for the committee.  This bill would provide additional protections to the seller in a transaction where the buyer actively solicited the purchase of a property that is not currently being offered for sale and where the Seller is not represented by a licensed Realtor.  It would require that the contract specifically notes that the seller has a right to have an appraisal done by an appraiser of their choosing and paid for by the buyer and that they have the right to cancel the contract within 4 days of receiving the appraisal without penalty or further obligation. For owners who do not choose to have an appraisal done they have the right to cancel the contract without penalty or further obligation within 10 business days after execution. It also adds specific requirements for how these rights will be shown in the contract and that the seller must affirmatively acknowledge them.  Would it fall on us to confirm that the contract in a transaction we close meets these requirements?  If it doesn't and we close and insure the transaction would we be open to a claim down the road?

Maureen

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Maureen Pfaff, President and CEO

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