Real estate dispute hinges on “as is” provision in sale agreement

| Jul 8, 2021 | Real Estate Disputes

The written word is a powerful thing. If a dispute were to arise, the court will often look to the the real estate contract, not a conversation between the buyer and seller, to help find a resolution. A recent case provides an example. In this case, a buyer purchased a commercial building. Shortly after buying the property, the buyer noticed serious defects with the property. The buyer claims the seller did not disclose the defects but instead stated that the property was in good condition. As a result, the buyer filed suit against the seller alleging breach of implied covenant of good faith and fair dealing, fraud in the inducement, negligent misrepresentation, negligence, and unjust enrichment.  

The trial court found in favor of the seller. The buyer appealed the trial court’s decision, taking the case to the District Court of Appeal of the State of Florida Fourth District.

The case hinged on the presence of an “as is” provision within the PSA. The parties used a property sale agreement (PSA) with an “as is” provision. The provision clarified that the seller made no warranties or representations about the property. The PSA also included a provision that allowed the buyer to inspect the property and, if dissatisfied, cancel the contract. According to the facts of the case, the buyer completed an inspection and hired an engineer to review the property. After complete, the buyer chose to go through the with the purchase.

Afterwards, the buyer discovered a wide array of serious issues, including mold growth, roof leaks, and failures of the HVAC system. The buyer presented a statement from the property’s manager, who stated the seller took efforts to conceal the issues noted above. Ultimately, the appellate court agreed with the trial court, noting that comments made by the seller to the buyer are effectively trumped by the written contract. As such, even if the seller stated there was not a problem with the roof, the “as is” provision within the contract effectively removes liability if the statement proves false.