As Is
What Is an As-Is Condition Clause?
An as-is condition clause (also called an as-is clause) is a phrase used in legal, business, and consumer transactions to describe the current condition of something without any improvements or modifications.
The phrase signifies the item or property is being sold in its existing state with no guarantees or warranties. In other words, the buyer is accepting an as-is item with any faults or problems that may exist. However, the item must meet the details of the seller's description.
What Is an As-Is Clause in Real Estate?
In a real estate sale, an as-is clause typically means the condition of the property is accounted for in the purchase price of the property. This lower price indicates that the seller will not make or pay for repairs that may come up in a property inspection.
It is up to the buyers of as-is properties to conduct due diligence with various inspections to determine the extent of any existing issues, including:
- structural inspection
- mechanical inspection
- insect and rodent inspection
- radon test
- oil tank sweep
- chimney inspection
- pool inspection
After getting the results of the inspections, the buyer must determine if they want to go ahead with the purchase or if the cost and extent of the repairs are more than they expected.
The buyer also has the right to cancel the pending contract if the home does not meet the seller's description of the property.
Examples of As-Is Disclaimers
The seller's wording of an as-is statement must include clear language so the buyer understands they are purchasing an item or property in its current condition. It also must state that the seller does not offer any guarantees or warranties on the property's condition.
Example of an as-is disclaimer when buying property
Here's an example in real estate:
"The seller is selling the property "as-is" condition, with any and all existing faults. The buyer accepts that they are purchasing the property in its current condition with no expressed or implied guarantees or warranties regarding the property's suitability or condition".
Example of an as-is disclaimer when buying a used vehicle
Buyers of used vehicles may also encounter the as-is condition phrase. In fact, an as-is disclaimer should be an essential part of the absolute bill of sale for a used car.
In an as-is used car transaction, the seller makes no guarantees the vehicle will continue to operate, and the seller is not responsible for the condition of the car after the transaction is complete.
Here is an example of an as-is disclaimer in a bill of sale for used cars: "The buyer accepts the vehicle as is with any and all existing faults."
Even if the car breaks down a few minutes after the new owner drives away with their newly purchased vehicle, the buyer is not entitled to a refund if the contract includes the as-is clause.
However, many states have so-called “lemon laws” to protect used car buyers from unscrupulous sellers, and an increasing number of used car dealers offer short-term returns or exchanges on their vehicles.
When Is an As-Is Clause Not Binding?
Although as-is clauses are legally binding in most cases, there are some situations when a buyer of an as-is item or property can pursue legal action against a buyer.
The primary example is if the seller fails to disclose in writing the condition of the property before the sale. Other instances that might make the as-is clause enforceable include:
- The seller intentionally hides property defects or obscures information regarding the defects.
- The seller misrepresents the condition of the property or lies to the buyer about its condition.
- The seller does not disclose known issues with the property that the buyer couldn't reasonably discover with standard inspections.
Make sure you read very carefully any agreement before agreeing to the purchase.
Helpful Resources:
California Association of Realtors - Use of an “as is” Clause
AutoTrader - What Does ‘As Is’ Mean
McMillan Metro Faerber - The As-Is Clause In Real Estate: Is It Enforceable?.
What Is an As-Is Condition Clause?
An as-is condition clause (also called an as-is clause) is a phrase used in legal, business, and consumer transactions to describe the current condition of something without any improvements or modifications.
The phrase signifies the item or property is being sold in its existing state with no guarantees or warranties. In other words, the buyer is accepting an as-is item with any faults or problems that may exist. However, the item must meet the details of the seller's description.
What Is an As-Is Clause in Real Estate?
In a real estate sale, an as-is clause typically means the condition of the property is accounted for in the purchase price of the property. This lower price indicates that the seller will not make or pay for repairs that may come up in a property inspection.
It is up to the buyers of as-is properties to conduct due diligence with various inspections to determine the extent of any existing issues, including:
- structural inspection
- mechanical inspection
- insect and rodent inspection
- radon test
- oil tank sweep
- chimney inspection
- pool inspection
After getting the results of the inspections, the buyer must determine if they want to go ahead with the purchase or if the cost and extent of the repairs are more than they expected.
The buyer also has the right to cancel the pending contract if the home does not meet the seller's description of the property.
Examples of As-Is Disclaimers
The seller's wording of an as-is statement must include clear language so the buyer understands they are purchasing an item or property in its current condition. It also must state that the seller does not offer any guarantees or warranties on the property's condition.
Example of an as-is disclaimer when buying property
Here's an example in real estate:
"The seller is selling the property "as-is" condition, with any and all existing faults. The buyer accepts that they are purchasing the property in its current condition with no expressed or implied guarantees or warranties regarding the property's suitability or condition".
Example of an as-is disclaimer when buying a used vehicle
Buyers of used vehicles may also encounter the as-is condition phrase. In fact, an as-is disclaimer should be an essential part of the absolute bill of sale for a used car.
In an as-is used car transaction, the seller makes no guarantees the vehicle will continue to operate, and the seller is not responsible for the condition of the car after the transaction is complete.
Here is an example of an as-is disclaimer in a bill of sale for used cars: "The buyer accepts the vehicle as is with any and all existing faults."
Even if the car breaks down a few minutes after the new owner drives away with their newly purchased vehicle, the buyer is not entitled to a refund if the contract includes the as-is clause.
However, many states have so-called “lemon laws” to protect used car buyers from unscrupulous sellers, and an increasing number of used car dealers offer short-term returns or exchanges on their vehicles.
When Is an As-Is Clause Not Binding?
Although as-is clauses are legally binding in most cases, there are some situations when a buyer of an as-is item or property can pursue legal action against a buyer.
The primary example is if the seller fails to disclose in writing the condition of the property before the sale. Other instances that might make the as-is clause enforceable include:
- The seller intentionally hides property defects or obscures information regarding the defects.
- The seller misrepresents the condition of the property or lies to the buyer about its condition.
- The seller does not disclose known issues with the property that the buyer couldn't reasonably discover with standard inspections.
Make sure you read very carefully any agreement before agreeing to the purchase.
Helpful Resources:
California Association of Realtors - Use of an “as is” Clause
AutoTrader - What Does ‘As Is’ Mean
McMillan Metro Faerber - The As-Is Clause In Real Estate: Is It Enforceable?.