Washington Code 58.19.180 – Unlawful to sell lots or parcels subject to blanket encumbrance which does not provide purchaser can obtain clear title — Alternatives
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It shall be unlawful for the developer to make a sale of lots or parcels within a development which is subject to a blanket encumbrance which does not contain, within its terms or by supplementary agreement, a provision which shall unconditionally provide that the purchaser of a lot or parcel encumbered thereby can obtain the legal title, or other interest contracted for, free and clear of the lien of such blanket encumbrance upon compliance with the terms and conditions of the purchase agreement, unless the developer shall elect and comply with one of the following alternative conditions:
Terms Used In Washington Code 58.19.180
- Blanket encumbrance: shall mean a trust deed, mortgage, mechanic's lien, or any other lien or encumbrance, securing or evidencing the payment of money and affecting the land to be developed or affecting more than one lot or parcel of developed land, or an agreement affecting more than one such lot or parcel by which the developer holds said development under option, contract, sale, or trust agreement. See Washington Code 58.19.020
- Contract: A legal written agreement that becomes binding when signed.
- Developer: means any owner of a development who offers it for disposition, or the principal agent of an inactive owner. See Washington Code 58.19.020
- Disposition: includes any sale, lease, assignment, or exchange of any interest in any real property which is a part of or included within a development, and also includes the offering of property as a prize or gift when a monetary charge or consideration for whatever purpose is required in conjunction therewith, and any other transaction concerning a development if undertaken for gain or profit. See Washington Code 58.19.020
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Purchaser: means a person who acquires or attempts to acquire or succeeds to any interest in land. See Washington Code 58.19.020
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
(1) The developer shall deposit earnest moneys and all subsequent payments on the obligation in a neutral escrow depository, or real estate trust account regulated under *RCW 18.85.310, until such time as all payments on the obligation have been made and clear title is delivered, or any of the following occurs:
(a) A proper release is obtained from such blanket encumbrance;
(b) Either the developer or the purchaser defaults under the sales contract and there is a forfeiture of the interest of the purchaser or there is a determination as to the disposition of such moneys, as the case may be; or
(c) The developer orders a return of such moneys to such purchaser.
(2) The title to the development is held in trust under an agreement of trust until the proper release of such blanket encumbrance is obtained.
(3) The purchaser shall receive title insurance from a licensed title insurance company against such blanket encumbrance.
NOTES:
*Reviser’s note: RCW 18.85.310 was recodified as RCW 18.85.285 pursuant to 2008 c 23 § 49, effective July 1, 2010.