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Questions on As-is Condition

“As is” is a legal term that means a buyer is purchasing an item from the seller in the exact condition the item currently is in. In real estate, this would mean that if a house needs repairs and improvements to be done and is being sold in its current condition “as is” and “with all faults”. In an “as is sale”, the buyer is aware of all the work that needs to be carried out and is prepared to buy the property in its present condition. Thus the seller is not liable to make any improvements or repairs before he or she hands over the property to the buyer.

Listed below are a few questions answered by the lawyers on “as-is” condition related issues.

I sold a house in Oregon with an "as is" condition stated in the Sales Addendum and the Residential Sales Agreement contract. As a seller, am I responsible for new water leak damages?

You should not have any liability as long as you have disclosed to your buyer everything you knew or are aware of about the property. Apart from that, the buyer is responsible for anything that happens after a sale.

I was planning to buy a house in “as is” condition. However, I did not perform a professional home inspection and discovered a major gas leak in the house on my own, one week before I signed the contract. I then asked the seller to fix it but he said that since the house is being sold “as is”, he was not responsible. What can I do to fight this?

A property that is being sold “as is” is meant to be taken just the way it is. The owner is not obliged to make any repairs, changes, deductions, or improvements to the property. During your due diligence period, you were expected to make a professional inspection to check that the house didn’t need any major repairs. This inspection was also intended to make you aware of the exact condition the house. You could check your purchase and sale contract now to see if there is a time period in which you are allowed to back out of the contract if you discover any major defects. If the contract does not allow this and you choose not to close the deal, you stand to lose not only the deposit but also face the possibility of being sued for other damages. It’s your choice to decide whether to take the home and fix the leak or potentially lose the deposit and pay for other damages.

I am a real estate broker and my client accepted a contract to sell his house at a very low price in "as is" condition. There was a hailstorm recently and he called his insurance company to claim damage to the roof. The company said that they would give him a check for $14,000. Since the house has been sold in "as is" condition, does the seller need to give the money to the buyer now?

This all depends on the date of execution of the contract. If the damage and subsequent check came after the house was sold, the money would belong to the buyer. Also, since you are aware of this, the buyer can sue you for non-disclosure if the issue comes to light later.

We received a letter from our previous landlord stating that we wouldn’t be getting our security deposit back. It also outlined the improvements he had made to the property. However, the landlord had purchased the house in “as is” condition and had bought it in the middle of the lease. When we left, he didn’t mention any of the problems and instead got new tenants in the next day. What are our rights now to fight this?

You could go to small claims court and sue your landlord. You could possibly prove the improvements done on the house by the landlord were not due to any damage caused by you or your family and therefore should not be taken from your deposit.

As a seller, if you want to sell your property “as is”, you need to first inform your real estate agent or include this in your advertisements when you list the place for sale. Your purchase contract also needs to say that you are selling the property "as is." In certain states, an "As Is Addendum" is added to the contract, which makes the "as is" status clear. As a seller, you will also need to disclose all the defects that you know about within the property and have the buyer sign this disclosure so that he/she knows of any problems before the sale. You must also allow the buyer to perform a property inspection. Finally, your contract should, ideally, allow the buyer a chance to withdraw from the sale, within a specified period, should the inspection throw up something he/she is not willing to accept.

Ask a Real Estate Lawyer

Tina
Tina, Lawyer
Category: General
Satisfied Customers: 5366
Experience:  17 years of legal experience including real estate law.
4460311
Type Your Real Estate Law Question Here...
characters left:
7 Real Estate Lawyers are Online Now

How JustAnswer Works:

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Real Estate Lawyers are online & ready to help you now

Tina
Lawyer
Satisfied Customers: 4813
16 years of legal experience including real estate law.
Law Pro
Lawyer
Satisfied Customers: 6227
20 years extensive experience in real estate law, foreclosure, finance, and landlord tenant law.
Barrister
Lawyer
Satisfied Customers: 4966
13 years real estate, Realtor. Landlord 24+ years

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