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Is the Model Disclosure Statement Really Required in Washington...or What?

I understand that Washington requires contractors provide a model disclosure statement to the owner at the start of work, and I may lose lien rights if I don't provide it. However, someone told me that not sending it is worse than that even, and that I'll be in violation with the DLI for not sending the Model Disclosure Statement. Is that true? What are the consequences of that?

3 replies

Jul 6, 2020

Under RCW 18.27.114, any contractor agreeing to perform any contracting project: (a) for the repair, alteration, or construction of four or fewer residential units or accessory structures on such residential property when the bid or contract price totals $1k or more; or (b) for the repair, alteration, or construction of a commercial building when the bid or contact price totals $1k or more but less than $60k, must provide the customer with the model disclosure statement set forth in the statute (you can also download it from the L&I website). You are required to have the customer sign the disclosure and must keep a copy of the signed disclosure in your files for a minimum of three years. Failure to provide this notice prohibits you from pursuing a lien and also constitutes an infraction under RCW 18.27, et seq. If L&I discovers that you failed to supply the model disclosure statement when it was required, you will be fined $500 (penalties for repeated offenses may be higher) and the infraction will be listed on the contractor's website where it can be viewed by the public. The failure to supply the model disclosure statement also constitutes a per se violation of Washington's Consumer Protection Act, RCW 19.86, et seq. A claimant who prevails on a claim for violation of the Washington CPA is entitled to recover his or her actual damages, plus treble (special) damages of up to three times his or her actual damages, capped at $25k, plus costs and reasonable attorneys' fees. When in doubt, it's best to supply the model disclosure. There is no penalty for supplying the disclosure where it is not required but the penalties for not supplying the disclosure where it is required are steep.

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Jul 7, 2020

No, it isn't worse. The law requires that it be sent or you will lose lien rights so not sending it is a per se violation of the law. Most likely L& I wouldn't get involved since losing lien rights is tough sanction.

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Jul 7, 2020

The short answer to this question is that failure to provide (and get the customer’s signature acknowledging receipt of) the disclosure statement required in RCW 18.27.114 not only bars a contractor’s lien claim, but also, in Subsection (6), “constitute[s] an infraction under the provisions of this chapter”.

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