A new statewide law set to take effect on January 1, 2026, is poised to significantly alter the landscape for real estate investors in Washington, particularly those involved in off-market property transactions. The legislation, known as the Solicited Real Property-Owner Protection Act, introduces strict disclosure rules and mandatory waiting periods aimed at protecting property owners.
The Real Estate Investors Association of Washington (REIA) is actively working to educate its members on the new compliance standards. The association emphasizes that while the law does not prohibit investor activity, it establishes a new framework that requires careful navigation to avoid substantial legal and financial penalties.
Key Takeaways
- A new statewide law, SHB 1081, takes effect in Washington on January 1, 2026, targeting off-market real estate deals.
- The law mandates specific disclosures and waiting periods for investors who solicit property owners.
- Non-compliance can lead to severe penalties under the Washington Consumer Protection Act, including treble damages and attorney fees.
- The Real Estate Investors Association of Washington (REIA) is providing education and resources to help investors adapt to the new regulations.
- Investors in Seattle must continue to comply with the city's separate Homebuyer Protection Ordinance.
A New Regulatory Framework Emerges
The Washington state legislature has enacted the Solicited Real Property-Owner Protection Act (SHB 1081), a measure designed to increase transparency in real estate transactions that occur outside the traditional market. This law applies broadly to investors who directly contact property owners to purchase their homes, a common practice known as off-market dealing or wholesaling.
Shirley Henderson, President and Co-Founder of REIA, clarified the law's intent. It is not designed to halt investor activity but rather to introduce safeguards for homeowners.
"The statewide law Solicited Real Property-Owner Protection Act is not aimed at stopping investor activity. However, it is directed at off-market deals and introduces specific disclosure and timing requirements that investors must follow to avoid very costly penalties."
These new rules mean that investors must adjust their processes. Transaction planning, documentation, and the overall timeline for closing a deal will likely require more time and attention to detail to ensure full compliance with the state's requirements.
Understanding the High Stakes of Non-Compliance
The consequences for failing to adhere to the new law are significant. The legislation ties non-compliance to Washington’s Consumer Protection Act (CPA), a powerful statute that allows for substantial financial penalties against violators.
Investors who overlook the new disclosure or waiting-period requirements could face lawsuits from sellers. The potential financial exposure is considerable.
Example of Potential Risk
If a seller successfully argues they were not given the required disclosures and sold their home for $50,000 below fair market value, the court could find a CPA violation. Under the act, that $50,000 in damages could be tripled to $150,000. When the seller's legal fees and other costs are added, an investor's total liability could easily surpass $250,000 for a single transaction.
Beyond monetary damages, a court could also issue an injunction, a legal order that could prohibit the investor from conducting any future real estate business in the state of Washington. This makes understanding and implementing the new rules a critical business imperative.
Navigating a Dual-Layered System in Seattle
For investors operating within Seattle's city limits, the legal landscape is even more complex. They must comply not only with the new statewide law but also with a separate, pre-existing municipal ordinance.
Seattle's Homebuyer Protection Ordinance
The City of Seattle implemented Council Bill 121039, known as the Seattle Homebuyer Protection Ordinance, which has been in effect since October 20, 2025. This local law has its own set of requirements for investors purchasing properties within the city, creating an additional layer of regulation that Seattle-based investors must navigate alongside the new statewide act.
This dual system requires investors in Seattle to be diligent in understanding both sets of rules. Compliance with one does not automatically guarantee compliance with the other, increasing the need for thorough legal guidance and operational planning.
REIA Steps Up to Support Investors
In response to these significant legal changes, the Real Estate Investors Association of Washington has launched a comprehensive initiative to support its members. The organization is focused on providing the education and tools necessary for investors to operate responsibly and lawfully under the new framework.
"There is a continual need to reinvent in real estate investing," Henderson stated. "Laws change. Markets change. Beyond education, networking, and resources, one of REIA’s core duties is to help investors understand how new laws affect their business and how to operate within them responsibly."
REIA's support plan includes several key components:
- Attorney-Led Education: Hosting sessions with legal experts to break down the practical impacts of SHB 1081.
- Compliance Checklists: Developing member-only resources to guide investors through the new procedural steps.
- Compliant Frameworks: Creating lawful transaction structures designed to simplify deals and mitigate risk.
- Alternative Sourcing Methods: Providing education on deal-sourcing techniques that do not involve solicitation and thus may fall outside the scope of the new law.
- Peer Support: Facilitating discussions through Master Mind Groups and online forums for members to share experiences and strategies.
The association plans to release detailed compliance guidance following an upcoming attorney presentation in January, with registration opening soon for members. This proactive approach aims to ensure that Washington's real estate investors can adapt to the new environment, protect themselves from liability, and continue their business activities in a compliant manner.
