Add Guaranty Agreement Template Mark with airSlate SignNow

Irc utilties form

Music hi Minnie Fitzsimmons I'm your Washington Realtors Legal Hotline lawyer in today's video is another in our continuing series entitled real estate fundamentals you should know and today we're talking about form 22k the utility's addendum let's first talk about the law that gives form 22k meaning there is a law in washington a statute in washington which says that an escrow company can be obligated to collect from seller at the time of closing funds necessary to pay unpaid utility bills owing to a utility company that has the authority to lien sellers property why do we have that law we have that law because prior to that law becoming effective we would have buyers move into their property call the water company to turn on their water only to find out that there's a six hundred and thirty seven dollar bill still owing from the seller that now buyer has to pay before wot buyer can get water to their property is that fair under the purchase and sale agreement no with seller obligated to pay that bill themselves yes does buyer have a choice in the matter at this point no because the buyer wants water buyer has to pay sellers old bill could buyer then go and sue seller for six hundred and thirty seven dollars sure but the law says escrow you can circumvent the that bad outcome if you contact a a utility company prior to closing verify if there are any lena bowl and unpaid utility bills from seller and collect those funds from seller from sellers proceeds at closing pay the utility bill so that when buyer goes to hook up their water all they have to do is provide their contact information and they've got water no outstanding bills to pay that's that's that's the purpose of the law the law becomes effective in a real estate transaction by the buyers broker doing two things first thing buyers broker has to do is on the face of the form 21 or the purchase take my purchase and sale agreement that buyers brokers using buyer has to mark the box in the sentence that asks whether or not the parties want the services of the escrow company to collect sellers unpaid utility bills that box has to be marked yes and then the the boilerplate language on the form itself references buyer broker then to attach a form 22k now we get to the form 22k buyer brokers have historically engaged in very bad practices with respect to form 22k and the bad practices that brokers have historically engaged in are to leave it is this is I'm sorry is to leave the form 22k largely blank that buyer and seller sign form 22k or maybe they will do some skeleton approach to writing in maybe just the name a certain utility companies and nothing else why have buyer brokers fallen into that very very bad practice because probably many many years ago it was more difficult for a buyer broker to be able to identify which utility companies service sellers property before the internet for example buyer brokers may have just been left to guess which utility companies service sellers property and so there was language added at the bottom of 22k which says that if 22k is not fully completed then either seller or listing broker can fill in the missing information after mutual acceptance because of that language because of old practices buyer brokers routinely now leave form 22k largely blank what does that mean here's what that really means in the terms of a transaction it means that once we have mutual acceptance seller and listing broker never go back and fill in that information so when escrow gets the purchase and sale agreement including form 22k form 22k looks the same as it did when buyer broker finished with the four meaning most of the information is not included the statute I described in the beginning of the video is triggered only by the buyer and sellers provision of all of the information required by forum 22k relative to each individual utility company so if for example the water company has lien rights and buyer broker only identifies the name of the water company but does it provide their address doesn't provide all of the information required by forum 22k related to that water company then escrow has no obligation to contact the utility company the water company to determine whether or not seller's bill was paid so now buyer is in a doubly bad position not only will seller leave the bill unpaid that buyers going to inherit but buyer is going to be led to believe by the terms of the agreement that the escrow company is looking out for them when in fact the escrow company has no statutory obligation to confirm the payment of that water bill and so when buyer moves into the house calls the utility company it says turn on my water they're gonna say pay us six hundred and thirty seven dollars first why because buyers broker didn't fill in form 22k ask yourself by a broker two questions number one what is sellers or listing brokers incentive to fill in the information on form 22k they have no reason to fill it in we already have mutual acceptance filling in that information gives the escrow company the opportunity to assess the seller for any unpaid utility bills now maybe that seems like that's fair and that's what should happen but I asked you what's the incentive for listing broker and seller to fill in the blank spaces on form 22k they have no incentive second question I want you to ask yourself is really how hard is it for you to fill in that information many times the EMA les will identify the utility companies or most of the utility companies providing service to the property if there are utility companies not identified in the MLS do an internet search or better yet tag your buyer with that responsibility buyer while I'm preparing the purchase and sale agreement pursuant to your instructions why don't you get online and get on the phone call the utility companies that we think provide service to this property and verify the the utility company may not give you a lot of information but every utility company will let you know if they service the address that you give them and if they do that all the information that you need to fill in the form 22k is publicly available information it all has to do with the contact information for the utility company again no seller account numbers buyer brokers you your buyers are going to continue to get hit with sellers utility bills if you continue to not fully complete form 22k prior to mutual acceptance and when that happens buyer is going to look to you for compensation for those unpaid utility bills if you have questions on this topic or any other send an email to me Legal Hotline at W a realtor org thank you for being a Washington Realtors member you