Question: When we purchased our home from a bank we were required by the bank to sign a twelve-page addendum to the purchase contract written by the bank. The addendum stated that the bank was not responsible for any problems with the home due to the fact that it was being sold “as is”. The inspector that was hired only found minor problems so we decided to close on the home. About three weeks after we closed on the home, we discovered that the one of the major air conditioning units was totally defective, and to replace it would cost over $5,000. The bank’s listing agent the bank had replaced the other air conditioning unit before putting the home on the market. We believe that the bank must have known about the defective condition of the major air conditioning unit which now needs to be replaced, but the bank did not want to spend any more money. If we can show that the bank knew of problems with this major air conditioning unit, but failed to tell us, would we have a claim even though the home was being sold “as is?” Also, do we have an Arizona real estate law claim against our home inspector for not discovering the defective condition of this major air conditioning unit which now needs to be replaced?
Answer: Many homes in Arizona are now being sold “as is” by sellers and by banks. However, a seller is not protected from failing to disclose known defects even with an “as is” sale. Which means you may have a claim against the bank if the bank had knowledge through the listing agent, or other agents or employees of the bank, of the defective condition of the major air conditioning unit which now needs to be replaced. Additionally, you may also have a claim against the home inspector, if the standard of care for home inspectors is that a reasonable home inspector would have discovered this defective major air conditioning unit. However, many home inspectors limit their liability to the amount of the cost for the home inspection in their home inspection contracts. The courts generally enforce these limitations of liability. Therefore, if the cost of the inspection was $450, any claim against the home inspector for failing to discover the defective condition of the major air conditioning unit could be limited to $450.