SENATE BILL REPORT
E2SHB 1335
As of March 17, 2021
Title: An act relating to review and property owner notification of recorded documents with unlawful racial restrictions.
Brief Description: Concerning review and property owner notification of recorded documents with unlawful racial restrictions.
Sponsors: House Committee on Appropriations (originally sponsored by Representatives Valdez, Rude, Berry, Fitzgibbon, Morgan, Santos, Shewmake, Davis, Berg, Gilday, Bergquist, Fey, Bateman, Lekanoff, Lovick, Callan, Riccelli, Rule, Pollet, Senn and Harris-Talley).
Brief History: Passed House: 3/4/21, 97-1.
Committee Activity: Business, Financial Services & Trade: 3/18/21.
Brief Summary of Bill
  • Requires the University of Washington and Eastern Washington University to review existing deeds and covenants for unlawful racial or other discriminatory restrictions and provide notice of such restrictions to property owners and county auditors.
  • Adds to the seller disclosure statement a notice to the buyer of real property that covenant or deed restrictions based on race or other protected classes are unlawful and provides the methods by which such restrictions can be struck.
  • Provides a process for striking and removing unlawful provisions from the record and chain of title after a property owner files an action in superior court.
SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE
Staff: Clinton McCarthy (786-7319)
Background:

Washington Law Against Discrimination.  The Washington Law Against Discrimination (WLAD) prohibits discriminatory practices in employment; places of public resort, accommodation, or amusement; real estate transactions; and credit and insurance.  The law protects persons from discrimination based on their race, creed, color, national origin, citizenship or immigration status, families with children, sex, marital status, sexual orientation, age, honorably discharged veterans, or military status.  The law also protects persons from discrimination based on the presence of any sensory, mental, or physical disability or the use of a trained dog guide or service animal by a person with a disability.

WLAD declares void any provision in a written instrument relating to real property that purports to forbid or restrict the conveyance, encumbrance, occupancy, or lease of the property to individuals within a protected class.  If a written instrument contains a provision void under WLAD, the owner, occupant, or tenant of the property or the homeowners' association board may bring an action in superior court to have the provision struck from the public records, or may record a restrictive covenant modification document with the county auditor.

Seller's Disclosures.  A seller of residential real property must provide a buyer with a disclosure statement about the property within five business days after mutual acceptance of a written purchase agreement.  The disclosure statement requires the seller to answer yes, no, or don't know on a list of items, with space provided for more information if necessary.  The seller disclosure statement includes the following categories:

  • title;
  • water;
  • sewer or on-site sewage system;
  • structural;
  • systems and fixtures;
  • homeowners' association or common interests;
  • environmental;
  • manufactured and mobile homes; and
  • full disclosure by sellers.

 
Within three business days of receipt of the disclosure statement, the buyer may approve and accept the disclosure statement or rescind the purchase agreement.  If the disclosure statement is delivered late or not delivered, the buyer's right to rescind expires the earlier of three days after receipt of the disclosure statement or the date the transfer closes.
Summary of Bill:

Subject to appropriations, the University of Washington and Eastern Washington University must review existing recorded covenants and deed restrictions to identify recorded documents that include racial or other restrictions on property ownership or use against protected classes that are unlawful under WLAD.  For properties subject to such unlawful restrictions, the universities must notify property owners and the county auditor of the county in which the property is located and must provide information on how such unlawful restrictions may be struck.
 
The seller disclosure statement is amended to include a notice to the buyer that covenants or deed restrictions based on race, creed, sexual orientation, or other protected class are void and unenforceable, and provides information on how such illegal restrictions can be struck.
 
A process for striking and removing unlawful restrictions from the record and chain of title after a property owner files an action in superior court is provided.
 
The original document containing the unlawful restrictions may be preserved for historical or archival purposes.
 
The provisions of the bill apply to real estate transactions entered into on or after January 1, 2022.
Appropriation: None.
Fiscal Note: Available.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: The bill takes effect on January 1, 2022.