2.3 Agency Disclosure Requirements and Forms
Key Takeaways
- The pamphlet 'Real Estate Brokerage in Washington' must be provided before a buyer or seller signs a brokerage services agreement
- Form 17, the Real Property Transfer Disclosure Statement under RCW 64.06, is required for most residential sales of 1-4 units
- The seller must deliver Form 17 within 5 business days of mutual acceptance unless waived in writing
- The buyer has 3 business days from receipt of Form 17 to rescind, and the Environmental section can never be waived if any answer is 'yes'
- Designated brokers must retain transaction and trust-account records for at least 3 years under RCW 18.85
The Pamphlet and Agency Confirmation
Washington requires specific disclosures at fixed moments in a transaction. Memorize the timing — the exam tests it directly.
Pamphlet: "Real Estate Brokerage in Washington"
| Requirement | Detail |
|---|---|
| Document | "Real Estate Brokerage in Washington" (replaced the old "Law of Real Estate Agency") |
| When | Before the buyer or seller signs a brokerage services agreement |
| To whom | Each buyer and seller the broker renders services to |
| Plain language | Rewritten in 2024 for a common reader |
Agency Confirmation in the Purchase and Sale Agreement
RCW 18.86.030 requires the broker to disclose the agency relationship in the purchase and sale agreement — i.e., state in writing who each broker represents (the buyer, the seller, or both as a limited dual agent). This confirmation appears on the contract itself, not just in conversation.
Material Fact Disclosure
A broker must disclose all existing material facts known to the broker that are not apparent or readily ascertainable to the parties. A material fact is information that would likely affect a reasonable buyer's decision to purchase, the price they would pay, or a seller's decision to sell.
| Category | Examples of material facts |
|---|---|
| Property condition | Structural defects, water intrusion, pest infestation |
| Legal | Boundary disputes, easements, recorded liens |
| Environmental | Known contamination, flood zone, underground tanks |
| Transaction | Anything the broker knows that affects the deal |
Limitation: A broker is not liable for failing to disclose a defect they did not know about, and is not required to independently inspect the property. The duty is to disclose known material facts.
Key rule: When unsure, disclose. Over-disclosure of a known fact is rarely a violation; non-disclosure of a known material fact creates liability.
Form 17 — Seller Disclosure Statement (RCW 64.06)
Washington's Real Property Transfer Disclosure Statement, universally called Form 17, has been required under RCW 64.06 since 1995. The seller — not the broker — completes it.
When Form 17 Is Required
| Transaction | Form 17 required? |
|---|---|
| Residential 1-4 units | Yes (unless an exemption applies) |
| Condominium units | Yes |
| Unimproved (vacant) land | A separate version applies |
| Foreclosure / deed in lieu | Exempt |
| First sale by a builder of new construction | Exempt |
| Transfer between spouses or co-owners | Exempt |
Form 17 Sections
Title and encumbrances; Water source and quality; Sewer/Septic; Structural; Systems and fixtures (HVAC, electrical, plumbing); Homeowners' association; Environmental (asbestos, contamination, flooding); and Full Disclosure of any other known defects.
Critical Timing and Rescission Rules
| Rule | Detail |
|---|---|
| Delivery | Seller delivers Form 17 within 5 business days of mutual acceptance (unless waived) |
| Rescission | Buyer may rescind within 3 business days of receiving Form 17, at the buyer's sole discretion |
| Environmental section | Cannot be waived if any environmental answer is "yes" |
| Remedy for false disclosure | Buyer may have a misrepresentation claim |
Trap: A buyer can waive receipt of Form 17 in writing — except the Environmental section when an answer is "yes." Memorize the 5-day delivery / 3-day rescission split.
Record Retention (RCW 18.85)
The designated broker must keep transaction records — including the purchase and sale agreement, earnest money receipt, and an itemization of receipts and disbursements — for at least 3 years, open to DOL inspection.
| Document | Retention |
|---|---|
| Transaction files / agreements | 3 years minimum |
| Trust (earnest money) account records | 3 years |
| Disclosure acknowledgments | 3 years |
Also required federally: the lead-based paint disclosure for homes built before 1978, given before the contract is signed.
Worked Scenario
A buyer and seller reach mutual acceptance on a 1995 house on Monday, June 1. The seller has not yet handed over Form 17. Under RCW 64.06, the seller must deliver Form 17 within 5 business days — by about Monday, June 8. The buyer receives it Wednesday, June 3, and notices the Environmental section reports a known underground oil tank ("yes"). The buyer has 3 business days from June 3 to rescind and walk away with their earnest money, at their sole discretion. Because an environmental answer is "yes," the buyer could not have waived receipt of that section even if they had wanted to.
Disclosure Summary Table
| Disclosure | When | To whom | Form/method |
|---|---|---|---|
| Pamphlet | Before signing agreement | Buyer/seller served | "Real Estate Brokerage in WA" |
| Agency relationship | In the contract | Both parties | Written in purchase & sale agreement |
| Limited dual agency | Before acting | Both principals | Initialed written consent |
| Form 17 | Within 5 business days of mutual acceptance | Buyer | RCW 64.06 statement |
| Material facts | As soon as known | Affected party | Written recommended |
| Lead-based paint | Before contract (pre-1978) | All buyers | Federal disclosure |
Trap: Form 17 is the seller's statement of known conditions — it is not a warranty, and it does not replace a buyer's own inspection. A broker who knows a disclosure is false must correct it; staying silent is a violation.
Under RCW 64.06, how long does a Washington buyer have to rescind after receiving the Form 17 seller disclosure statement?
Which portion of the Form 17 seller disclosure can a Washington buyer NOT waive when the answer is 'yes'?
For how long must a Washington designated broker retain transaction records under RCW 18.85?