Home Sold "As Is" Is Not a Shield for Fraud

Question: Last year, we sold our Peoria home "as is" because we did not want to have any liability to the buyers. We recently received a letter from the buyer's attorney saying that they had to replace the air-conditioning at a cost of $12,000. The letter also says that two of our nosy neighbors told the buyers that we knew of problems with our air-conditioning, which had been repaired several times. Even if we knew of problems with the air-conditioning, doesn't selling the home "as is" protect us?

Answer: Under the standard purchase contract, a seller warrants that the air-conditioning will be in working condition at close of escrow, and the sale of the home "as is" would mean that the seller would not have to repair a defective air-conditioner. If you knew of problems with the air-conditioning, however, and failed to disclose them to the buyers, you have committed fraud. The sale of a home or other real property "as is" does not protect a seller from fraudulent non-disclosure, but does protect a seller from any liability for failure to disclose unknown defects.

-C. Combs