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As-Is Condition Related Questions

What does it mean to buy or sell a house in “as is” condition? In an “as is” rental lease, is the tenant or landlord responsible for repairs once a tenant vacates the property? Many questions need answered when buying, selling or renting property. It is important to know your rights and responsibilities as a buyer or seller and as a landlord or tenant. Read below where Experts have answered these questions and more.

What does it mean to buy or sell a house in “as is” condition?

Property that is sold or bought “as is” is taken in its exact condition. When being sold, the seller will not make any improvements, changes, repairs or deductions from the home.

What is the purpose of having a property that is being purchased “as is” inspected?

During the due diligence period of a contract, the inspection allows the buyer to make certain the home does not require any major repairs and to make the buyer aware of the condition of the property.

If a home is bought in “as is” condition, and later discover an un-disclosed crack in the foundation, does the new owner have any legal standing to sue?

In a real estate transaction, if a seller does not disclose a material defect, such as a foundation issue, roof leaks, infestations of mold or vermin, etc., he or she can be held liable for failure to disclose, if the buyer exercised reasonable diligence when inspecting the condition of the residence. This can include the hiring of a contractor to inspect the premises. A buyer cannot sue for material defects that should have been identified during a preliminary inspection of the property or that were known about prior to the closing of the sales transaction. The “as is” is a conditional “as is.” It is conditional on the fact that proper disclosure had been made and such disclosure was not negligent or fraudulent.

In Illinois, is the tenant who rents a property “as is” or the landlord responsible for painting the walls once the property is vacated?

The landlord is clearly responsible for painting. The tenant would be responsible for any holes in the walls, and to leave the property in the same condition as when first rented, minus reasonable wear and tear.

When a real estate contract on a foreclosure specifies a due diligence clause with a 14 day option to terminate and an addendum is later added stating the property is being sold “as is” without representation of warranties of any nature, is the due diligence period still a part of the contract after the “as is” addendum is signed?

The contingency clause should not be waived by the “as is” clause, unless the addendum specifically revokes the contingency. The “as is” clause is commonly put into a foreclosure sale contract because the bank has not been in possession of the house and does not want to be responsible for any repairs. The buyer should verbally confirm the contingency period with the bank to avoid arguments at a later date. It would also be a good idea to have a home inspector inspect the property within the contingency period. If there are problems that change buyer’s valuation of the property, the buyer should request and receive a written extension to the contingency period or terminate the contract before the contingency expires. As a practical tip, if there are repairs that need to be done, a buyer can estimate the cost and renegotiate the purchase price.

When a contract is accepted by a buyer “as is,” and later a hail storm damages the roof to the property and the insurance company issues a check to the seller for repairs, is there any legal reasons that the seller has to make repairs or give the money to the buyer, or can the seller keep the funds?

It is “as is” at the date of execution of the Contract. If the hail damage and check came after, it is the property of the buyer since it is damage beyond what was contracted for. Further since the hail damage is known, the buyer could file a lawsuit for nondisclosure.

How can an individual sell a mobile home “as is, where is” without later having legal issues?

The mobile home may be sold with a Bill of Sale and a transfer of the title to the buyer. It is highly recommended that both buyer and seller go together to the county clerk’s office to sign documents and confirm before county clerk that the sale is handled in the proper manner.

As seen above buying, selling, renting or leasing a property “as is” can be stressful. It is important that all parties are directed in the right direction with accurate, knowledgeable information. In order to assist in preventing legal issues, an Expert may be contacted to answer all your questions.

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