gofer articles

No need to be an industry veteran like Isaac Toussie to know that different states of the United States will frequently view real estate matters markedly differently. It’s what makes real estate law so fascinating – as well as quite a challenge to stay on top of! Look at Alabama, for instance. There, property buyers cannot rescind their purchases even in cases of demonstrable seller fraud – since the property is recognized as being sold on an “as-is” basis. That’s right: Alabama case law takes the old dictum of caveat emptor very, very seriously, to the point of, in effect, allowing for otherwise illegal activity!

The Yellowhammer State takes the notion of “as-is” so literally that unless somehow superseded, the terms means exactly just that, even if the seller described the property with lies. That’s right, it’s really been upheld that misrepresentations are entirely legal under that basis.. Most anywhere else that’s just fraud and will probably lead to some jail time, yet in the Heart of Dixie the as-is clause is king and must be specifically superseded by some other provision agreed to by seller and buyer – or the as-is clause shall be interpreted literally!

This was a rather clear-cut situation as far as that particular court saw it, but the law itself in Alabama is actually not quite as simplistically draconian as the quick snapshot of the case provided here would suggest. Such strict interpretations of an as-is clause only apply to used property in the state, and not to new developments. Such as-is clauses are also superseded in cases where the misrepresentation is not obvious and potentially harmful to health and safety.

In this case, Teer v. Johnston, however, while the misrepresentation of flooding is indeed not something immediately obvious, it was not considered harmful to health and safety, constituting an inconvenient nuisance instead. What plaintiff should have done was stipulating in the contract or the deed that pre-sale disclosures hold despite the sale!