Combs: Seller isn't absolved in 'as is' sale

Question: We purchased a home from a bank. In addition to the standard purchase contract, the bank required us to sign a 12-page addendum to the purchase contract. In this addendum, the bank said the home was being sold "as is," and the bank was not responsible for any problems with the home. We hired a home inspector, who found only minor problems. Therefore, we closed on the purchase of the home.

Three weeks after we closed, we discovered that one of the major air-conditioning units in the home was defective and would need to be replaced at a cost of over $5,000. The bank's listing agent said the bank had replaced the other major air-conditioning unit in the home before putting the home on the market. We believe that the bank must have known about the defective condition of the air-conditioning unit but did not want to spend any more money.

If we can show that the bank knew of problems with this 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 a claim against our home inspector for not discovering the defective condition of this air-conditioning unit?

Answer: Although many homes are now being sold as is in Arizona by banks and other sellers, an as-is sale does not protect the seller from failing to disclose known defects. Therefore, you may have a claim against the bank if the bank had knowledge of the defective condition of the unit.

You also may have a claim against the home inspector if the standard of care is that a reasonable home inspector would have discovered this defective air-conditioning unit. Many home inspectors, however, in their contracts limit their liability to the amount of the cost for the home inspection.

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 air-conditioning unit could be limited to $450.

by Christopher Combs The Arizona Republic Oct. 21, 2011 04:24 PM



Combs: Seller isn't absolved in 'as is' sale