Texas Real Estate Articles


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Seller Disclosure

Three Rules: Disclose, Disclose, Disclose

by David J. Willis, J.D., LL.M.

Introduction

Sellers and buyers have different needs and motivations when it comes to the transfer of real estate. One area that is often an issue is property condition. Sellers typically want to make the transfer “as is” without warranties and with no obligation for repairs. Buyers, on the other hand, have an interest in acquiring property that is in the best condition for the price. They also want full disclosure of adverse conditions, defects, and needed repairs.

Residential Disclosure

TREC promulgates a Seller’s Disclosure of Property Condition for use in residential real estate transactions (www.trec.state.tx.us/forms). This form (TREC OP-H dated 10-23-13) is filled out by the seller and attached to the TREC 1-4 contract. The form tracks section 5.008 of the Property Code which states:

5.008(a) A seller of residential real property comprising not more than one dwelling unit located in this state shall give to the purchaser of the property a written notice as prescribed by this section or a written notice substantially similar to the notice prescribed the his section which contains, at a minimum, all of the items in the notice prescribed this section.

The purpose of the Seller’s Disclosure is to make it clear what appliances, equipment, and features exist on the property; whether or not these items are working; if the seller knows of any defects or malfunctions in critical systems; if certain red-flag events like termite treatment, previous fires, or flooding have occurred; the need for repairs; and the existence of unpermitted additions, unpaid HOA fees, violations of deed restrictions, lawsuits, or conditions that “materially affect the health or safety of an individual.”  It should be “completed to the best of seller’s belief and knowledge as of the date the notice is completed and signed by the seller.” Prop. Code sec. 5.008(7)(d).

The Seller’s Disclosure seeks to implement the core disclosure requirement in Texas, succinctly articulated in Myre v. Meletio, 307 S.W.3d 839, 843-44 (Tex. App.—Dallas 2010, pet. denied): “In the context of a real estate transaction, a seller is under a duty to disclose material facts that would not be discoverable by the exercise of ordinary care and diligence by the purchaser, or that a reasonable investigation and inquiry would not uncover. But a seller has no duty to disclose facts he does not know. Similarly, a seller is not liable for failing to disclose what he only should have known.” Actual knowledge is thus required. A careless and neglectful seller who has not thoroughly acquainted himself with the condition of property he is selling may be off the hook.

Exceptions

Property Code section 5.008(e) provides that the requirement that a Seller’s Disclosure be provided does not apply to a transfer:

  1. pursuant to a court order or foreclosure sale;
  2. by a trustee in bankruptcy;
  3. to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest (which would include deeds in lieu of foreclosure).
  4. by a lienholder who has either purchased at a foreclosure sale or a sale pursuant to a court order or accepted a deed in lieu of foreclosure;
  5. by a fiduciary in the course of an administration of a decedent’s estate, guardianship, conservatorship, or trust;
  6. from one co-owner to one or more other co-owners;
  7. made to a spouse or to a person or persons in the lineal line of consanguinity of one or more of the transferors;
  8. between spouses incident to divorce, legal separation or a property settlement agreement;
  9. to or from a governmental entity;
  10. a new residence of not more than one dwelling unit that has not been occupied for residential purposes (this would include newly-built homes);
  11. of real property where the value of any dwelling does not exceed 5% of the value of the property (pure “tear-downs,” in other words).

Penalty

If the seller does not give the Seller’s Disclosure as required, Property Code section 5.008(f) permits the buyer to “terminate the contract for any reason within seven days after receiving the notice.” The statute does address the legal consequences of the seller never giving the Seller’s Disclosure at all. However, if the failure to give the notice is coupled with fraud or failure to disclose defects, then other laws and penalties may (and likely will) arise pursuant to the Deceptive Trade Practices Act and/or the Statutory Fraud Act (see below).

Commercial Sales

For commercial transactions, the Texas Association of Realtors has a Commercial Property Condition Statement that is an optional attachment to its standard commercial contracts. Its scope is broader than TREC’s Seller’s Disclosure since it addresses additional issues such as wetlands, underground storage tanks, toxic waste, and the like. Although the form is optional in commercial transactions, a careful buyer should always require that the seller provide it. Note that this and other TAR forms are available only to realtors.

Purpose of Disclosure Forms

The intent and purpose of both the residential and commercial disclosure forms is the same: to induce the seller to disclose material conditions, circumstances, and defects. For some reason, however, the drafters of these forms saw fit to insert a statement at the top to the effect that the contents of the form do not constitute a warranty by the seller. The TREC Seller’s Disclosure states:

THIS NOTICE IS A DISCLOSURE OF SELLER’S KNOWLEDGE OF THE CONDITION OF THE PROPERTY AS OF THE DATE SIGNED BY SELLER AND IS NOT A SUBSTITUTE FOR ANY INSPECTIONS OR WARRANTIES THE PURCHASER MAY WISH TO OBTAIN. IT IS NOT A WARRANTY OF ANY KIND BY SELLER OR SELLER’S AGENTS.

The TAR Commercial Property Condition Statement reads:

THIS IS A DISCLOSURE OF THE SELLER’S KNOWLEDGE OF THE CONDITION OF THE PROPERTY AS OF THE DATE SIGNED. IT IS NOT A SUBSTITUTE FOR ANY INSPECTIONS OR WARRANTIES A BUYER OR TENANT MAY WISH TO OBTAIN.  IT IS NOT A WARRANTY OF ANY KIND BY SELLER, SELLER’S AGENTS, OR ANY OTHER AGENT.

What is the point of these disclaimers? Is the seller making disclosures but then warning the buyer not to rely on them? Apparently so. At best, this is ambivalent legal drafting. It should be unsettling if not unsatisfactory from the buyer’s point of view. A careful buyer may consider negotiating inclusion of a clause which makes it clear that the seller is standing behind the truth of these disclosures. Buyers, commercial or residential, should seek to deny a seller any wiggle-room on the disclosure issue. 

Ongoing Duty to Disclose

The Seller’s Disclosure does not in and of itself impose an ongoing duty to disclose matters that may come to the seller’s attention after the form has been signed and delivered to the buyer.  Bynum v. Prudential Residential Servs., 129 S.W.3d 781,795 (Tex. App.—Houston [1st Dist.] 2004, pet. denied).  Although this may be strictly true as it relates to the form, it would be unwise for a seller to withhold material adverse information that is subsequently discovered. There are too many statutory and common law avenues for an aggrieved buyer to pursue, most notably an action for deceptive trade practices (see chapter 41).

Two additional important points. Firstly, inclusion of an “as is” clause in the contract does not relieve a seller of the obligation to disclose material facts (Ritchey v. Pinnell, 357 S.W.3d 410 (Tex.App.—Texarkana 2012, no pet.); and second, merely giving the buyer a copy of an expert report on a certain condition (termites, for example) does not eliminate the requirement that the seller disclose what he knows about that condition (Lawrence v. Kinser, Tex.App. —Dallas, Dec. 15, 2011). The conclusion? The best rule for sellers, as stated elsewhere in this book, is to disclose, disclose, disclose.

Broker Liability for the Seller’s Disclosure

Accurately completing the Seller’s Disclosure is the responsibility of the seller, preferably in the seller’s own handwriting. The seller’s broker does not ordinarily become liable for the seller’s wrongdoing in this regard unless the broker has actual knowledge of a defect. A broker “would have a duty to come forward only if he had any reason to believe that the seller’s disclosures were false or inaccurate, and the only way he could be held liable for [the seller’s] statement in the notice is if it were shown to be untrue.” Sherman v. Elkowitz, 130 S.W.3d 316, 321 (Tex. App.—Houston [14th Dist.] 2004, no pet.).

As a related issue, a broker does not become liable for a defect or adverse condition (mold, for example) merely by transmitting a mold inspection report to the buyer. Arlington Home Week Inc. v. Peek Environmental Consultants, Inc., 361 S.W.3d 773 (Tex.App.—Houston [14th Dist.] 2012).

The Deceptive Trade Practices-Consumer Protection Act (DTPA)

Have no doubt about it: The DTPA applies to real estate transactions. The cases consistently declare that real estate is a consumer good within the meaning of the statute. See Chastain v. Koonce, 700 S.W.2d 579, 582 (Tex. 1985).

Business & Commerce Code section 17.46 declares that “false, misleading, or deceptive acts or practices in the conduct of any trade or business are hereby declared unlawful. . . .” Also expressly stated to be unlawful are misrepresenting the characteristics and uses of a particular item; representing that goods or services are of a particular quality and standard when they are not; advertising with intent not to sell as advertised; and failing to disclose information in an attempt to induce the consumer into buying.

Mere puffing or opinion” expressed by a seller is carved out from most liability by DTPA cases. “Whether a representation is a warranty or merely an expression of [the seller’s] opinion depends in part upon whether the seller asserts a fact of which the buyer is ignorant, or merely states an opinion or judgment on a matter on which the seller has no special knowledge and on which the buyer may be expected to have an opinion and exert his judgment.” Also, a “general statement concerning a future event . . . should be looked at differently than a statement concerning a past or present event or condition.” Humble Nat’l Bank v. DCV, Inc., 933 S.W.2d 224, 230 (Tex.App.—Houston [14th Dist.] 1996, writ denied).

Bottom line: affirmative misrepresentations or failure by a seller to disclose known material adverse conditions and defects are clear violations of the DTPA. The key question is whether or not disclosure by the seller would have influenced an ordinary buyer’s decision to buy or not buy.

Does it sound as though any of the itemized grievances in the DTPA might form the basis of a lawsuit against a real estate investor? Count on it. But it does not end there. Section 17.50 adds breach of warranty and “any unconscionable action or course of action by any person” to the list. “Any unconscionable action?”  Seriously? Statutory language does not get any broader or more potentially damaging than that. Investor sellers beware: If you fail to disclose a material item, a jury can find that your action was “unconscionable” (an open-ended term by any definition) and award treble damages, attorney’s fees, and court costs against you. 

For more detail concerning the DTPA and its impact on real estate investors, go to the chapter 41.

Statutory Fraud

The Statutory Fraud Act (Tex. Bus. & Com. Code § 27.01) is another potential pitfall for sellers who fail to make full disclosure:

(a) Fraud in a transaction involving real estate or stock in a corporation or joint stock company consists of a

(1) false representation of a past or existing material fact, when the false representation is

(A) made to a person for the purpose of inducing that person to enter into a contract; and
(B) relied on by that person in entering into that contract; or

(2) false promise to do an act, when the false promise is

(A) material;
(B) made with the intention of not fulfilling it;
(C) made to a person for the purpose of inducing that person to enter into a contract; and
(D) relied on by that person in entering into that contract.

(b) A person who makes a false representation or false promise commits the fraud described in Subsection (a) of this section and is liable to the person defrauded for actual damages.

(c) A person who makes a false representation or false promise with actual awareness of the falsity thereof commits the fraud described in Subsection (a) of this section and is liable to the person defrauded for exemplary damages. Actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness.

(d) A person who (1) has actual awareness of the falsity of a representation or promise made by another person and (2) fails to disclose the falsity of the representation or promise to the person defrauded, and (3) benefits from the false representation or promise commits the fraud described in Subsection (a) of this section and is liable to the person defrauded for exemplary damages. Actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness.

(e) Any person who violates the provisions of this section shall be liable to the person defrauded for reasonable and necessary attorney’s fees, expert witness fees, costs for copies of depositions, and costs of court.

The above language is tighter than that found in Prop. Code 5.008 or in the common law. “The elements of statutory fraud under sec. 27.01(a) are the same as the elements of common law fraud, except that sec. 27.01(a) does not require proof of knowledge or recklessness as a prerequisite to the recovery of actual damages.” Russell D. Miller & Juliet Invs. V. Argumaniz, ___ S.W.3d ___ (Tex.App.—El Paso 2015, pet filed 7-22-15 (No. 08-13-0091-CV; 2-11-15).

Observe the language in Coldwell Banker Whiteside Associates v. Ryan Equity Partners, 181 S.W.3d 879, 888 (Tex. App.—Dallas 2006, no pet.): “A misrepresentation may consist of the concealment or nondisclosure of a material fact when there is a duty to disclose. The duty to disclose arises when one party know that the other party is ignorant of the true facts and does not have an equal opportunity to discover the truth. A fact is material if it would likely affect the conduct of a reasonable person concerning the transaction in question.”

Exemplary or punitive damages are available to plaintiffs who prevail. A plaintiff is entitled to recover exemplary damages in cases of statutory fraud if the false representation is made with actual awareness of the falsity of the representation. Hines v. Hash, 843 S.W.2d 464 (Tex. 1992).

Real estate brokers are liable under the DTPA only for intentional fraud.

Common-Law Fraud

The Statutory Fraud Act does not preclude a deceived buyer from filing suit on grounds of common-law fraud as well. In other words, the two causes of action can be pursued side-by-side. Any competent plaintiffs’ attorney will include as many causes of action as possible in his lawsuit against a nondisclosing seller. This is known as the “shotgun approach” and is designed to insure that, when the dust settles, at least some lines of attack will have found their mark.

Additional Liability for Real Estate Licensees

Agents and brokers who are also sellers need to be especially concerned about failing to make full disclosure. Unlike unlicensed real estate investors, licensees are subject to the Real Estate License Act (“RELA,” found in Occupations Code section 1101.652), the five canons of professional ethics and conduct (Texas Administrative Code chapter 531), and the rules of the Texas Real Estate Commission (Texas Administrative Code chapters 531-543 — go to www.trec.texas.gov for a copy).

TREC may revoke or suspend the license of a broker or salesperson if the licensee is convicted of any offense involving fraud or engages in misrepresentation, dishonesty, or untrustworthy behavior. RELA section 1101.652(b)(3) provides that a licensee may be sanctioned for making “a material misrepresentation to a potential buyer concerning a significant defect, including a latent structural defect.” Section 1101.652(b)(4) specifically adds failure to disclose a significant defect to the list. Accordingly, investors who have a real estate license have a heightened level of duty and potential liability.

Suppose a broker fails to disclose an important item personal fact—for instance, that she is the mother of the seller. Does this void the earnest money contract? No, although the broker may be vulnerable to sanctions by TREC. Goldman v. Olmstead 414 S.W.3d 346 (Tex.App.—Dallas 2013, pet. denied).

Note that Goldman will likely not prevent a creative plaintiffs’ attorney from alleging that the licensee acted in conspiracy with the seller. Result? The broker must expend time and resources to defend against this charge. In the long run, licensees are always better off pursuing a policy of full disclosure that continues throughout the course of the transaction.

“As Is” Transactions

It is important to observe that the TREC 1-4 contract contains an optional “as is” clause, and the transaction becomes “as is” if the box at paragraph 7D(1) is checked. Problem is, not all “as is” clauses are equally thorough and effective (see below).

Here is the central question: Is it lawful to transfer property without disclosing material defects if the contract states that the transaction is “as is?” In other words, does use of the words “as is” or similar phraseology relieve the seller of the obligation to disclose? The answer, as is true in many areas of the law, is it depends—but probably not. And the risks involved in attempting to do so are significant.

The foundational case in this area is Prudential Insurance Co. v. Jefferson Associates Ltd., 896 S.W.2d 156 (Tex. 1995), which upheld “as is” clauses in certain narrow circumstances. Two things are critical if such a clause is to be upheld: the specific wording and whether or not the buyer obtained an inspection. Also, in evaluating an “as is” transaction, courts look not just at these two factors but at the totality of the circumstances.  Note that if the buyer consults an attorney before agreeing to an “as is” clause then a court is more likely to find the clause enforceable. Courts dislike situations where the parties are unequally informed of their rights. For this reason, it is more likely that an “as is” provision will be upheld in a commercial rather than a residential transaction since commercial buyers are presumed to be more sophisticated.

In 2007, the Dallas Court of Appeals said the following with regard to “as is” transactions involving residences: “The nature of the transaction and the totality of the circumstances surrounding the agreement must be considered. Where the ‘as is’ clause is an important part of the basis of the bargain, not an incidental or ‘boilerplate’ provision, and is entered into by parties of relatively equal bargaining position, a buyer’s affirmative agreement that he is not relying on the representations of the seller should be given effect.” Kupchynsky v. Nardiello, 230 S.W.3d 685, 690 (Tex. App.—Dallas 2007, pet. denied).

The commercial landlord-tenant case of Italian Cowboy Partners, Ltd. v. Prudential Insurance Co. of America, 341 S.W.3d 323 (Tex. 2011), involved lease of a restaurant with a history of chronic sewage odor. The landlord’s manager, who knew of the problem, fraudulently induced the tenant into a lease by orally declaring that the premises were in “perfect condition.” Even though Italian Cowboy is a commercial lease case, it is likely that a similar theory of liability would be applied against a seller of residential property who made such false statements.

The 2014 case of Harstan, Ltd. v. Kim, 441 S.W.3d 791, 796-97 (Tex.App.—El Paso 2014, no pet) states: “Courts assess the validity of an ‘as is’ agreement in light of three factors: (1) the sophistication of the parties; (2) the terms of the ‘as is’ agreement; and (3) whether there was a knowing misrepresentation or concealment of a known fact.” Evaluation of these factors in a specific case can result in a court declaring an “as is” clause invalid as a matter of law.

Willful Concealment and Fraudulent Inducement

The general take-away from this discussion is that an “as is” clause will not protect a seller in a case of willful concealment, and it will certainly be no protection if the seller engages in fraudulent inducement. Ritchy v. Pinnell, 357 S.W.3d 410 (Tex. App.—Texarkana 2012, no pet.).

Example? A seller knows that there is foundation settlement because of cracks in the sheetrock and floor tile. So the seller positions a picture over the wall crack and a rug over the cracked tile (willful concealment) and then goes on to tell the prospective buyer that there are no serious defects in the condition of the house (fraudulent inducement).

Determined "As Is" Sellers

What if a real estate investor is determined to sell “as is” and minimize any duty to disclose? In the residential context, of course, this is difficult because the Seller’s Disclosure is a required document. In commercial transactions, however, the situation is more fluid. Note, however, that an “as is” clause designed to comply with the standards of the Italian Cowboy case was upheld in Dragon Fish, LLC v. Santikos Legacy, Ltd., 383 S.W.3d 175 (Tex. App.—San Antonio 2012, no pet.), so a well-drafted “as is” clause is most definitely effective in Texas.

Paragraph 7.D of the TREC 1-4 contract states that “As Is” means the present condition of the Property with any and all defects and without warranty except for the warranties of title and the warranties in this contract.” While useful, this definition may not go far enough to satisfy a cautious seller. Furthermore, it does not commit the buyer to signing a deed containing an “as is” provision. A better strategy would be to include a more muscular “as is” clause as part of a custom special addendum to the contract; a satisfactory second choice is to check 7D(1) and add the following in paragraph 11 (Special Provisions):

Any existing survey provided is “as is,” with all faults and without representations or warranties. SELLER SELLS AND BUYER ACCEPTS THE PROPERTY IN ITS PRESENT CONDITION “AS IS,” WITH ALL DEFECTS, LATENT OR PATENT, KNOWN OR UNKNOWN, AND WITHOUT REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, EXCEPT FOR TITLE WARRANTIES. Oral representations are disclaimed. Buyer relies solely on Buyer’s inspections and due diligence. The deed shall include an “as is” clause and buyer shall sign the deed.

The space in Special Provisions is smaller than it used to be so the foregoing may have to be made to fit by reducing font size.  Even so, the job is not finished. An “as is” clause must also be included in the deed to the buyer to avoid merger (superseding) the provisions of the contract. An example:

THE PROPERTY IS CONVEYED AND ACCEPTED “AS IS,” IN ITS PRESENT PHYSICAL CONDITION, WITH ALL FAULTS AND DEFECTS, LATENT OR PATENT, KNOWN OR UNKNOWN, AND WITHOUT REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, EXCEPT FOR WARRANTIES OF TITLE AS MAY BE SET FORTH AND LIMITED HEREIN. IN PARTICULAR (AND BY WAY OF ILLUSTRATION AND NOT LIMITATION), GRANTOR MAKES NO REPRESENTATIONS AS TO THE PRESENT OR FUTURE VALUE OF THE PROPERTY OR ITS PRESENT OR FUTURE SUITABILITY FOR ANY PARTICULAR PURPOSE. FURTHER, GRANTOR HAS NOT MADE, DOES NOT MAKE, AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING THE ENVIRONMENTAL CONDITION OF THE PROPERTY OR ITS COMPLIANCE WITH ANY ENVIRONMENTAL, POLLUTION, OR LAND USE LAWS AND REGULATIONS, WHETHER FEDERAL, STATE, OR LOCAL. ANY AND ALL PRIOR ORAL OR WRITTEN STATEMENTS CONCERNING CONDITION OF THE PROPERTY, WHETHER MADE BY GRANTOR, GRANTOR’S AGENTS, OR THIRD PARTIES, ARE EXPRESSLY DISCLAIMED. GRANTEE ACCEPTS THIS CONVEYANCE SOLELY ON THE BASIS OF GRANTEE’S DUE DILIGENCE AND EXAMINATION OF THE PROPERTY. THE CONSIDERATION PAID FOR THE PROPERTY REFLECTS THE “AS IS” NATURE OF THIS CONVEYANCE. THIS “AS IS” PROVISION IS A MATERIAL TERM THAT HAS RESULTED FROM SPECIFIC NEGOTIATIONS BETWEEN THE PARTIES. GRANTOR WOULD NOT HAVE BEEN WILLING TO SELL AND CONVEY THE PROPERTY TO GRANTEE UNLESS THIS DEED CONTAINED THIS “AS IS” PROVISION. PROVISIONS OF THIS “AS IS” CLAUSE SHALL INDEFINITELY SURVIVE CLOSING AND SHALL NOT MERGE. IF GRANTEE IS UNCERTAIN ABOUT THE MEANING AND EFFECT OF THIS “AS IS” CLAUSE, THEN GRANTEE SHOULD CONSULT AN ATTORNEY. GRANTEE ACKNOWLEDGES THAT GRANTEE HAS BEEN GIVEN AMPLE OPPORTUNITY TO CONSULT AN ATTORNEY PRIOR TO CONSUMMATION OF THIS TRANSACTION.  GRANTEE HAS DONE SO OR FREELY ELECTED NOT TO DO SO, WITHOUT DURESS. GRANTEE’S INITIALS WHICH FOLLOW, AS WELL AS GRANTEE’S EXECUTION OF THIS DEED, INDICATE GRANTEE’S UNCONDITIONAL AND ABSOLUTE ACCEPTANCE OF THIS “AS IS” PROVISION: _______________________.

The optimal “as is” scenario for a seller would involve (1) an effective “as is” clause in both the earnest money contract and the warranty deed, and this clause should be clear, unequivocal, and conspicuous (bold and capitalized); (2) neither the seller nor his broker making any assurances or promises (oral or written) relating to property value, use, or condition; and (3) the buyer signing the warranty deed in order to expressly accept the property in “as is” condition.

     In both cases, contract and deed, the legal standard is that an effective “as is” clause should be clear, unequivocal, and conspicuous (preferably in bold and capitalized).

The practical question, of course, is whether or not a buyer will be willing to accept such strict “as is” language. As is true with many contract terms, it may come down to price.

Is there a less onerous “as is” clause with which a buyer might feel comfortable? Yes, and it would probably consist of only the first sentence of the above provision.

"As Is" in the Real World

Generally speaking, “as is” transactions as a means of avoiding seller disclosure are problematic at best and should be avoided. No one, especially juries, likes a liar—whether the lie is by commission or omission. The best advice an attorney can give a seller is disclose, disclose, disclose, whether or not the contract contains an “as is” clause. If an “as is” clause is going to be included in a contract, it should be in bold and all caps. The seller should get a real estate attorney to draft it. 

Investor clients often ask, “Can they sue me if . . . ?”  For lots of reasons, this is the wrong question, since anyone can sue anyone for anything and incur little or no liability for doing so, at least in this country. The better approach—since lawsuits are so very expensive—is to deter suits in the first place by being open and above-board. 

Buyers confronted by a seller who insists on an “as is” clause while attempting to avoid disclosure should be suspicious. In such a situation, the best course of action for the buyer may be to walk away. Not every deal can or should be made. On the other hand, an “as is” clause combinedwith full disclosure by the seller may not be a problem so long as the buyer realizes that the he or she bears full responsibility for due diligence and should thoroughly inspect the property. Whenever a seller wants to include an “as is” clause in a sales contract, the buyer should respond by including a provision to the effect that such a clause does not relieve the seller of the obligation to disclose material conditions and defects. If the seller balks, then it may be time for an investor to look elsewhere for a deal. 

DISCLAIMER

Information in this article is proved for general informational and educational purposes only and is not offered as legal advice upon which anyone may rely. The law changes. Legal counsel relating to your individual needs and circumstances is advisable before taking any action that has legal consequences. Consult your tax advisor as well. This firm does not represent you unless and until it is expressly retained in writing to do so.

Copyright © 2016 by David J. Willis. All rights reserved worldwide. David J. Willis is board certified in both residential and commercial real estate law by the Texas Board of Legal Specialization. More information is available at his website, http://www.LoneStarLandLaw.com.