As-Is Clause
Definition
An as-is clause in a real estate contract states that the buyer accepts the property in its current condition without requiring the seller to make any repairs. However, an as-is sale does NOT eliminate the seller's obligation to disclose known defects.
Example
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.
Exam Tip
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 Disclosures Terms
Scope of Fair Housing Laws
Fair housing laws apply to a broad range of activities related to housing, including sale, rental, financing, and advertising.
Protected Classes
Protected classes are groups of people who are legally shielded from discrimination based on specific characteristics.
Consequences of Fair Housing Violations
Violating fair housing laws can lead to significant penalties, including fines, civil liability, and professional discipline.
State and Local Fair Housing Laws
Many states and localities have fair housing laws that expand upon the protections offered by the federal Fair Housing Act.
Lead-Based Paint Disclosure
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."
Property Condition Disclosure
A property condition disclosure is a written statement by the seller detailing the known condition of the property, including defects, repairs, and issues with major systems. Most states require sellers to complete this form.
Frequently Asked Questions
Test Your Disclosures Knowledge
Practice with exam-style questions to make sure you can apply As-Is Clause and other disclosures concepts.