"Sec. 1   RCW 64.04.005 and 1991 c 210 s 1 are each amended to read as follows:
     (1)(((a))) A provision in a written agreement for the purchase and sale of real estate which provides for liquidated damages or the forfeiture of an earnest money deposit to the seller as the seller's sole and exclusive remedy if ((the purchaser)) a party fails, without legal excuse, to complete the purchase, is valid and enforceable, regardless of whether the ((seller)) other party incurs any actual damages((, PROVIDED That:
     (i) The total earnest money deposit to be forfeited does not exceed five percent of the purchase price; and
     (ii) The agreement includes an express provision in substantially the following form: "In the event the purchaser fails, without legal excuse, to complete the purchase of the property, the earnest money deposit made by the purchaser shall be forfeited to the seller as the sole and exclusive remedy available to the seller for such failure."
     (b) If the real estate which is the subject of the agreement is being purchased by the purchaser primarily for the purchaser's personal, family, or household purposes, then the agreement provision required by (a)(ii) of this subsection must be:
     (i) In typeface no smaller than other text provisions of the agreement; and
     (ii) Must be separately initialed or signed by the purchaser and seller.
     (2) If an agreement for the purchase and sale of real estate does not satisfy the requirements of subsection (1) of this section, then the seller shall have all rights and remedies otherwise available at law or in equity as a result of the failure of the purchaser, without legal excuse, to complete the purchase.
     (3) Nothing in subsection (1) of this section shall affect or limit the rights of any party to an agreement for the purchase and sale of real estate with respect to:
     (a) Any cause of action arising from any other breach or default by either party under the agreement; or
     (b) The recovery of attorneys' fees in any action commenced with respect to the agreement, if the agreement so provides.
     (4))). However, the amount of liquidated damages or amount of earnest money to be forfeited under this subsection may not exceed five percent of the purchase price.
     (2) For purposes of this section((,)):
     (a) "Earnest money deposit" means any deposit, deposits, payment, or payments of a part of the purchase price for the property, made in the form of cash, check, promissory note, or other things of value for the purpose of binding the purchaser to the agreement and identified in the agreement as an earnest money deposit, and does not include other deposits or payments made by the purchaser; and
     (b) "Liquidated damages" means an amount agreed by the parties as the amount of damages to be recovered for a breach of the agreement by the other and identified in the agreement as liquidated damages, and does not include other deposits or payments made by the purchaser.
     (3) This section does not prohibit, or supersede the common law with respect to, liquidated damages or earnest money forfeiture provisions in excess of five percent of the purchase price. A liquidated damages or earnest money forfeiture provision not meeting the requirements of subsection (1) of this section shall be interpreted and enforced without regard to this statute.

NEW SECTION.  Sec. 2   This act applies to all contracts executed after the effective date of this act.

NEW SECTION.  Sec. 3   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately."