Am I responsible for any damage after sale?

Question

Hello investors, we are in Arizona and we purchased an investment “as is.”

We are unaware of any previous leaking or any major damage on the house. Are we responsible for anything that may happen after sale if there is something that does happen like a major water leak for example? This is based on selling on market not as is.

Billy Daniel · Answer

Your state laws will dictate what you can do.  But usually the due diligence is the buyers responsibility.  Once you sign papers, theres not much you can do.  This is why realtors urge inspections, disclosures, surveys, and appraisals during the buying process.

Selling "as is" really doesn't mean anything legally in my state.  It just tells the buyer that the seller is unlikely to bend on repairs that may be needed.  I've seen plenty of "as is" sellers make repairs in order to get to the closing table.  It certainly doesn't allow the seller to misrepresent the property.  If a buyer asks a pointed question, the seller is required to answer honestly.

Matt Devincenzo · Answer

State law will govern, but typically if you aren't aware of any issues and you don't do anything to hide or prevent their discovery then there's no recourse against you. So answer questions honestly, and if you discover something either fix or disclose it and you should be fine.

Nathan Gesner · Answer

If you weren't aware of the problem prior to selling, you can't be held liable. The buyer has a responsibility to inspect and verify what they are purchasing.

If the problem was "reasonably apparent" to an observer, then you may be liable for failing to investigate. I doubt that's the case because the buyer would see it, as well.

Christopher Warren · Answer

Hey Jessica! I’m a licensed agent in Arizona and a realtor.

Technically speaking, all home sales in Arizona are “as is” if your agent used the standard Arizona Association of Realtors sales contract template. That said, if your seller or you as a buyer also put “as is” in the contract, that generally means “I don’t want to do any repairs” or “I won’t ask for any repairs.”Important to note here: Stating “as is” at any point does not eliminate the need for disclosure.

If a seller willfully hid material defects from a buyer, that is illegal. These should be disclosures via a Seller Property Disclosure Statement in Arizona. Often items that are easily spotted in photographs will also be considered fully disclosed.

You also have a responsibility as a buyer to complete your due diligence and if a property is not what you expected, cancel the contract. I will never advise a client to waive inspections for this reason. Just had a deal fall through last week because of structural issues that the seller did not disclose. That could be the best $1000 spent if the home becomes unusable.

Feel free to connect if I can answer any questions or if you need a referral to a real estate lawyer in Arizona.

Am I responsible for any damage after sale?

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