Recent legal decisions and new legislation provide that the Seller has a responsibility for revealing to
the potential Buyer the true condition of the property. The concept of selling a property ‘AS IS ‘,
with the Buyer assuming all responsibility for determining the property condition, is not the 'normal'
way homes are sold. The Seller(s) must disclose all known conditions of the property to the Buyer.
And this information should be made available to the potential Buyer as soon as possible.
A CHARM OR AN IRRITANT?
Having lived in this property, the Seller has become accustomed to any peculiar conditions which
may have developed. But for the potential Buyer, that peculiarity may be far more than a mere
inconvenience. It may be such an irritant or defect that the potential buyer can not or will not
tolerate it. It is important for the Seller to review the condition of the property with the listing
real estate agent, taking special note of any known problems on the ‘Seller’s Real Property
Disclosure’ forms. Civic Code Section 1102, requires that the Seller provide the Buyer with a
completed ‘Seller’s Real Property Disclosure’.
ALL SYSTEMS GO!
A basic assumption in every sale is that the house, and all systems in the house are fully functional.
For example: The roof will hold out the rain and sun; The hot water heater will provide hot water;
and the furnace or heating system will provide heat. If it is known that any of the systems do not
function properly, such facts must be included in the purchase agreement, and acknowledged by the
Buyer.
‘AS IS’
An ‘AS IS’ purchase is perfectly acceptable, as long as the Buyer understands exactly what the ‘AS IS’
condition entails. Thus, it should be stated in the purchase agreement that the Buyer accepts the
house structure and all systems within, in their present condition, and acknowledges that they may
have existing defects. This acknowledgment provides a defense for the Seller should it is later claimed
that he did not disclose defects at the time of the purchase agreement was executed, but this does not
relieve the Seller(s) of the requirement to complete the ‘Seller’s Real Property Disclosure’ form.
NOTE: With the advent of large numbers of 'REOs' (Bank/Lender owned) properties, the potiential
Buyer should know in advance that these properties are normally sold 'AS IS'; That no Property
Disclosure form will be provided; The Buyer(s) will be required to sign a 'Waiver of NRS 113
Rights Form', with the signature(s) notarized.
ENVIRONMENTAL HAZARDS
It is required that the Seller also discloses any knowledge of existing environmental hazards in the
home or area such as asbestos or pollutants. The Buyer will be provided with a ‘Seller’s Real
Property Disclosure’, filled out by the Seller, stating his awareness or knowledge of any existing
environmental hazards.
