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
Protected Classes
Protected classes are groups of people who are legally shielded from discrimination based on specific characteristics.
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.
Seller's Disclosure Statement
A seller's disclosure statement is a form that sellers complete to inform buyers about the condition and history of the property, including known defects, past repairs, insurance claims, and environmental issues.
Flood Zone Disclosure
Flood zone disclosure requires informing buyers whether a property is located in a designated flood zone as mapped by FEMA. Properties in high-risk flood zones may require mandatory flood insurance.
Megan's Law Disclosure
Megan's Law requires states to make information about registered sex offenders available to the public. Some states require real estate agents to inform buyers about the availability of sex offender registries.
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.