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Directories Int'l Realty US Realty
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The "As-is" Clause Stuart Lieberman, Esq., You are in the market for new house. Every weekend is spent schlepping from house to house hoping you'll find the domicile version of Mr. Right. And then it happens. Splendor with a roof and even a swimming pool! You love the house and worse yet, your spouse loves the house. You know that there probably isn't going to be any going back. The seller is motivated. He is moving out of state because he says he has a new job. The price seems more than reasonable. Your kids, who never like anything, are in love. You know that you should hire a home inspector to look over the house before you close. But the seller asks why do you need to waste $250 on a home inspection? The house, after all, is in "perfect shape." The seller tells you that he's never had a problem with the roof and that there are no moisture issues whatsoever. Furthermore, he tells you the huge pool is in perfect condition. You have to take his word on that one because its winter and the pool has very little water in it. The seller informs you that he never had a problem with his underground heating oil tank and that the water from his drinking water well tastes better than any water you can ever purchase from the water company. Even though the sales price is reasonable, you are all but emptying out your piggy bank to stretch for this house. Saving the $250 on a home inspector would really help out. And the seller seems so honest, and he's already told you that the house is in perfect condition. A great guy like that would never lie! Moving day is in June. Now the pool is filled with water, the air conditioner is now running. And you are realizing the American dream. Until you decide to use that pool. And you find out that the filter doesn't work. The seller told you that the pool was in good condition so you assume its just bad luck and the filter happened to break right before you moved in. Of course, your faith starts to dwindle several days later during the first rainstorm when a lot of water appears in the basement. Remember the seller told you that there were no leaks? Strange how a leak must have just started between the time he signed the sales contract and the time you move into the house. You think, no sweat, I can handle it. Until you are told that you need a new roof for ten thousand dollars. Add that to the $3,500 for a new pool filter. And the $5,000 for a new air conditioner (It too was on the brink!!) Things quickly deteriorate from bad to worse when a large amount of heating oil is on the ground after that first rainfall. Go figure - the tank had a big hole in it and the heavy amount of rainwater was pushing the groundwater to the surface. And since the failed oil tank happened to be next to the shallow drinking water well, it's no wonder that the water has the taste of oil octane enhancer. But how much can a little octane enhancer hurt you as part of your morning coffee, anyway? It looks like you were skunked. The reason the seller didn't want you to obtain a home inspection was not out of concern over whether you would spend the $250. Rather, the seller knew that the deal would go bad if you knew the truth about this house. Now what? The seller's lawyer points out that there is no proof that the seller lied about anything. Furthermore, he tells you that the contract allowed a 30 day period to have a home inspection performed. Finally, the seller's lawyer, Mr. Bad Breath, points to the "as-is" clause in the contract, which provides that the seller makes no promises at all about any conditions of the property. Strangely, it also provides that any verbal representations by the seller are completely unenforceable. Is that the end of the story? Maybe not. You will need to see a lawyer. But if you can prove that the seller intentionally lied to you for the purpose of having you not retain a home inspector, you may be able to gain some legal relief. In addition, some jurisdictions have an implied duty of good faith and fair dealing in every contract and the court might find that the seller's behavior was inconsistent with that obligation. But of course the best thing you could have done would have been to be more defensive in the first place. Always hire a qualified home inspector when you're making a significant home purchase. No matter what the price it is, it is hard to replace the value provided by a qualified home inspector. Home inspectors come from a variety of disciplines and have a variety of expertise. Don't pick one out of the phone book, ask for referrals and recommendations. Try to use somebody who's been in the community for a lengthy period of time and has a strong reputation for doing a thorough job. Your real estate contract will probably provide you with a time period for conducting a home inspection. Probably the contract will provide that if you fail to do the home inspection within that period, you forfeit the right to conduct a home inspection. A timely home inspection will either inform you that the house is in perfect shape or alternatively may identify material issues. Usually your contract will allow you to either negotiate a resolution to those material concerns identified by the home inspector or in some cases terminate the contract. The "as-is" clause is found in many real estate contracts. It means that the buyer accepts the house in whatever condition it is in. But lies and deceptions are punishable -- even when a contract has this clause. As-is means what it says, unless the seller tries to lie to you and get you to buy a home that is really a ticking time bomb. In that case, the seller may not be able to duck behind the as-is clause. Most real estate contracts concerning residential property proceed with few significant problems. But on occasion misrepresentations are made to cover up significant problems associated with a property. As a buyer it is up to you to protect yourself. Always hire qualified professionals to make sure that all of your rights are being fully protected.
The information provided in this column is written by Stuart Lieberman,a practicing environmental attorney, and is for general information purposes only. It is not legal advice and should not be used in place of legal advice.
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