| Most homes are sold 'as is." In fact, the form | | | | If the problem has been disclosed by the Seller, the |
| Residential Purchase Agreement used by most | | | | Buyer has no cause to complain at a later date. He |
| brokers has a pre-printed 'as is' clause stating that | | | | could have walked away from the deal or |
| the property is sold 'as is' without any warranty and | | | | renegotiated. However, if the Seller knew about the |
| in its present physical condition. In a recent purchase, | | | | problem but did not disclose it, the Buyer may have a |
| I was asked by the seller to also sign a special | | | | claim against the Seller. |
| lawyer-prepared document which reiterated (in a full | | | | In a recent case, our client purchased a multi-million |
| page of legalese) that the property was being sold | | | | dollar home only to find that the winter rains brought |
| 'as is.' My first instinct was to ask: What is wrong | | | | extensive leaking. The professional inspection had |
| with this property and am I losing all of my rights by | | | | noted that the roof should be maintained yearly and |
| agreeing to buy it 'as is? | | | | would have to be replaced in three years. However, |
| There is no clear-cut answer but a quick explanation | | | | it had not uncovered any leaking, and the Seller made |
| of the law should put your mind at ease when buying | | | | no mention of roof leaks in the Disclosure Statement. |
| a property 'as is.' | | | | However, the gardener and housekeeper, both of |
| What is wrong with This Property? | | | | whom had worked for the Seller, remembered |
| As the Agreement notes, 'as is' means that the Seller | | | | numerous roof leaks while the Seller lived in the |
| is not making any warranties about the condition of | | | | house. |
| the property. Selling 'as is' does not necessarily mean | | | | The Seller argued that (1) the house was being sold |
| that anything is wrong with the property. The Buyer, | | | | 'as is' and (2) the inspection put the Buyer on notice |
| however, should have a professional inspector look at | | | | that the roof was in bad shape, thereby absolving |
| the property and accompany the inspector as he | | | | her of any liability. In any event, she also claimed to |
| examines the property. The inspector's trained eye | | | | have repaired the leaks and thought that they had |
| will catch items that you may not notice. | | | | been fixed. |
| Am I losing All of My Rights? | | | | While the inspector may have noted the limited life |
| If it turns out that a problem arises with the | | | | of the roof, the Seller was still required to disclose |
| property after the deal has been closed, what | | | | the leaking. The leaks were a material fact affecting |
| remedy does a Buyer have in an 'as is' sale? The 'as | | | | the value (and habitability) of the home. In this case, |
| is' clause works in concert with other laws, most | | | | neither the Buyer nor the inspector could have |
| notably California Civil Code §1102. This section | | | | discovered the leaks in a visual inspection of the |
| requires that the Seller provide the Buyer with a | | | | property. (Interestingly, because of liability issues, |
| detailed Real Estate Transfer Disclosure Statement. | | | | professional inspectors often will not allow the Buyer |
| The Disclosure Statement addresses almost every | | | | to follow them up to the roof, at least not on the |
| conceivable defect with the property-from the | | | | inspector's ladder!) The Seller settled with the Buyer, |
| presence of contaminants to lawsuits against the | | | | and the roof was replaced. |
| property. In general, the Seller is under a duty to | | | | So, rest assured, although you may be buying the |
| disclose any and all facts materially affecting the | | | | house 'as is,' the Seller is not excused from disclosing |
| value or desirability of the property which are known | | | | material problems in the Disclosure Statement. And in |
| only to him and which he knows are not known to, | | | | the event the Seller fails to make these required |
| or reasonably discoverable by, the Buyer. Even loud | | | | disclosures, the Buyer has a legal remedy, despite the |
| or obnoxious neighbors must be disclosed. | | | | 'as is' provisions of the Agreement. |