As-Is Clause
Also known as: As-Is Where-Is, Present Condition Clause
A contract provision stating that the home is sold in its current condition, with no obligation by the builder to make repairs or improvements. In new construction, this can limit your rights regarding defects found at or after closing.
Detailed Explanation
An as-is clause means the builder is selling the home in whatever condition it is in at the time of closing. The buyer accepts the home with all its faults, known and unknown.
While as-is clauses are common in resale transactions (where the home has existing wear and tear), they are more concerning in new construction. A brand-new home should meet building codes and reasonable quality standards.
In new construction, an as-is clause may attempt to shift the risk of construction defects from the builder to the buyer. However, some states limit the effectiveness of as-is clauses in new construction, especially where implied warranty protections exist.
In Your Contract
Look for "as-is," "as-is where-is," "present condition," or "buyer accepts the home in its current state" in the contract or closing documents.
Key Points
- 1As-is means the builder has no obligation to fix defects or make improvements.
- 2In new construction, this clause is more concerning than in a resale transaction.
- 3Some states do not allow as-is clauses to override implied warranty protections.
- 4An as-is clause does not excuse fraud or concealment of known defects.
- 5Get an independent home inspection even if the contract says as-is.
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