Beware Used Housing in Alabama
It isn’t necessary to be an industry veteran like Isaac Toussie to know that real estate laws throughout the country will vary. 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. In that state, “buyer beware” is held in a very, very high regard by the courts, such that even in cases of outright fraud buyers may have no legal recourse anyway – 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!
A recent case determined that an as-is clause in the sales contract not superseded by another provision will be interpreted literally, or “as-is.” That’s right, it’s really been upheld that misrepresentations are entirely legal under that basis.. Normally, this would constitute fraud, but an Alabama court has ruled that as the as-is clause in the sales contract was not superseded by any other provision signed onto by both parties, the as-is clause shall be taken literally!
That was an ambiguous situation in the eyes of Alabama law, 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 Such as-is clauses are also superseded in cases where the misrepresentation is not obvious and potentially harmful to health and safety.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, making nothing more than an inconvenience or nuisance at most. What the buyer should have done was to provide either in the sales contract or the deed that pre-sale disclosures should survive the execution of the deed!