Posted by John Merchant on December 31, 2004 at 10:28:37:
“The RCWs (revised code of Washington) require that Real Estate Contracts or Land Contracts be recorded to be valid”.
I just had a look at the RCWs on RE contracts, Title 64 and 65, and in my opinion, based on a reading of WA law, a REC is NOT required to be recorded in order to be valid.
Whereas a lease agreement of one year or longer MUST be recorded to be valid, the RCWs do not make such a demand on mere existence of a REC.
In other words a REC might or might not be recorded and its validity is unaffected one way or the other.
BUT, the Seller under a REC in WA, must record the REC OR A MEMO about the REC, before he can take advantage of WA’s REC Forfeiture provisions and file to forfeit his REC.
So I’d advise any WA REC seller to NOT have the REC itself notarized, so it CANNOT be recorded by the Buyer…but if the S later needed to formally file a Forfeiture action, he could then prepare and file such a memo and proceed with his forfeiture.
Lease Purchase or Option WA State? - Posted by Pam WA
Posted by Pam WA on December 16, 2004 at 01:17:58:
Hi!
I am ready to do my first lease -puchase in Washington State. I have consulted two attornies and have two different opinions reference the Landlord Tenant Act.
RCW 59.18.040 Living arrangements exempted from chapter.
(2) Occupancy under a bona fide earnest money agreement to purchase or contract of sale of the dwelling or the property of which it is a part, where the tenant is, or stands in the place of, the purchaser.
One attorney tells me this is obviously meant to refer to a short term occupancy while waiting for financing and so would not apply to a Lease Purchase agreement, especially if the rental contract and purchase agreement are seperate. The other says that since this section does not specify time, I need to use Option agreements rather than purchase agreements with my tenant buyer, to ensure the provisions of the Landlord Tenant Act do apply.
It would be easier for me to write rental agreemtns with purchase contracts, null if tenant vacants property for any reason prior to closing (yes, I have Bill Bronchicks Lease-Option Course).
Has anyone investing in Washington State had a problem with this?
Thanks! Pam WA (just went full time investing)
Re: Lease Purchase or Option WA State? - Posted by lonniewa
Posted by lonniewa on December 19, 2004 at 14:44:31:
The above RCW is most likely talking about a short term agreement with a P & S agreement. I would use a lease and separate option agreement with all my tenants no matter what. You might aslo want to use a L/O agreement with you seller instead of a L/P agreement.
Lease Purchase or Option WA State? - Posted by John Merchant
Posted by John Merchant on December 18, 2004 at 13:52:37:
Per WA LL/T law, ANY rental or lease agreement is going to be subject to the RCWs and city ordinances relative to same, if the property is within a city.
Whereas if you sell on REC, with NO lease or rental, no such compliance with WA LL/T laws would be involved.
Re: Lease Purchase or Option WA State- thanks - Posted by Pam WA
Posted by Pam WA on December 19, 2004 at 20:42:27:
Thanks for the reply. I agree, I think the correct way to handle this is to use a separate Rental agreement and an Option to purchase.
I appreciate your input.
Pam WA
REC or Contract for Deed, Land Contract - Posted by Pam WA
Posted by Pam WA on December 19, 2004 at 20:39:52:
Thanks for the reply. The RCWs (revised code of Washington) require that Real Estate Contracts or Land Contracts be recorded to be valid. Since Washington State has no state income tax, there is an excise tax and this is incurred when you file a Land Contract, as it is considered a sale. Rate is about 1.78% to 2.00(?)%, so would prefer to avoid this if possible.
One of our local rental owners association officers tells me that some people trying to do lease/purchase contracts haved been bitten by the RCW I first mentioned, and had to do a judiciary foreclosure to get non-paying tenants (at least, I think this was the situation) out.
I’m trying to avoid this.
Pam WA