The Great Disclosure Obligation Dilemma
Special to the San Diego Daily Transcript
Question: When we purchased our home in 1998, we paid for a professional home inspection that revealed drainage problems with the property. These problems were fixed before we bought the home. We recently sold our home, and the buyers are now claiming that they have drainage problems and they are trying to hold us responsible. They say that we “failed to disclose” the drainage problems to them, but as far as we knew there was no problem because we had it fixed. Anyway, we sold the property “as is”, so we should have no problem, right?
Your obligation to disclose facts about the property being sold, and whether or not you sell the property “as is”, are two different questions.
My short answer is: you have a problem. My longer answer explores the seriousness of your problem.
A contract which states that a property is being sold “as is” means that the property is being sold and will be transferred to the buyer in its present condition. “As is” means that the seller assumes no responsibility for making any repairs or improvements to the subject property. It means that the obvious deficiencies in the property, such as broken windows and the like, are the buyer’s problem. But, “as is” does not mean: “what you see is what you get.” “As is” does not mean that you, the seller, can avoid disclosing to your buyer all that you know about the condition of the property you are selling.
Continue Reading...
