An as-is clause shifts the risk of unknown defects to the buyer but does not protect sellers from liability for concealing known material defects. The seller must still complete required property condition disclosures and reveal known issues. The buyer should still conduct inspections and can usually cancel during the inspection period if significant problems are discovered. An as-is clause is common in estate sales, foreclosures, and bank-owned (REO) properties where the seller has limited knowledge of the property's condition.
A bank sells a foreclosed property "as-is" because the bank has never occupied the property and has limited knowledge of its condition. The buyer conducts a home inspection and discovers a $15,000 plumbing issue. Under the as-is clause, the bank is not obligated to make repairs, but the buyer can still cancel during the inspection contingency period.
The most important exam point: "as-is" does NOT eliminate disclosure obligations. Sellers must still disclose KNOWN defects. As-is only means the seller won't make repairs, not that the seller can hide problems. Buyers should STILL inspect and can usually cancel during the inspection period.
Related Terms
Related Concepts
Fair housing laws apply to a broad range of activities related to housing, including sale, rental, financing, and advertising.
Protected classes are groups of people who are legally shielded from discrimination based on specific characteristics.
Violating fair housing laws can lead to significant penalties, including fines, civil liability, and professional discipline.
Many states and localities have fair housing laws that expand upon the protections offered by the federal Fair Housing Act.
The Lead-Based Paint Disclosure is a federally mandated disclosure required for all residential properties built before 1978. Sellers and landlords must disclose known lead-based paint hazards and provide the EPA pamphlet "Protect Your Family From Lead in Your Home."
Frequently Asked Questions
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