Seller of "As Is" Home is Liable for Defect

Seller of “As Is” Home is Liable for Defect

  Question: We purchased a home in Tempe from an investor who had purchased the home at foreclosure, and then fixed up the home. In the purchase contract, there was attached an “as is” addendum and also language stating that we waived the seller’s property disclosure statement. Almost immediately after we purchased the home, we discovered problems with the air-conditioning. When we were complaining to our next-door neighbors about the air-conditioning, the wife said that the investor told her that he did not have the money to properly fix the air-conditioning. If our home was sold to us as is, and we waived the seller’s property disclosure statement, could we still have a claim against the investor if the investor failed to disclose the known failure to fix the air-conditioning?

  Answer: Yes. The failure by a seller to disclose a known material defect in a home or other real property is fraud. An “as is” sale or the waiver of the seller’s property disclosure statement will not prevent a claim against the investor for nondisclosure of a known air-conditioning problem. You should get a statement from your next-door neighbor about the conversation with the investor, and three bids from licensed air-conditioning contractors to repair the problem. If the investor will not pay for the cost to fix the air-conditioning problem, the standard purchase contract requires you to mediate the dispute with the investor before arbitration or litigation, unless the cost to fix the problem is less than $2,500. If less than $2,500, you can file a lawsuit in the small-claims division of your local justice court.

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