What follows are our general observations and opinions about “as-is” clauses in California residential sales. This is not legal advice, it is not a definitive statement of California law, and every transaction depends on its own facts.
Selling a property “as-is” is one of the most widely misunderstood terms in California real estate. Sellers frequently believe it means they can stay silent about known problems. Buyers frequently believe it means they have no recourse whatever. As we read the law, both are wrong, and the gap between those two beliefs produces a steady stream of litigation.
Our general understanding is that an as-is clause allocates the cost of repair — it signals the seller will not fix things and the buyer takes the property in its present condition. It does not, in our view, waive the statutory duty to disclose known material facts, and it does not immunise a seller who affirmatively misrepresents something.
What as-is genuinely does
It is not an empty term, and we would not want to leave that impression. In practice an as-is provision does real work:
- It sets expectations on repairs. The seller is not agreeing to fix anything, which matters when inspection reports come back with a list.
- It supports the argument that the buyer accepted the disclosed condition. Where a defect was disclosed and the buyer proceeded anyway, as-is strengthens the seller’s position considerably.
- It frames the negotiation. A buyer who wants repairs after an as-is offer is asking to change the deal, not to enforce it.
- It signals the pricing. As-is is often reflected in a lower price, and that context matters if a dispute later asks what the parties actually bargained for.
What it does not do
Our reading is that the disclosure obligations survive an as-is sale. The Transfer Disclosure Statement is still required in most residential transactions, and the statutory scheme provides that the duty cannot be waived. The Natural Hazard Disclosure is still required. Known material facts affecting value or desirability still need disclosing.
So the seller who knows the roof leaks in heavy rain, checks “no” on the relevant question, and points to the as-is clause has not protected themselves. In our experience that fact pattern is more common than it should be, usually because someone told the seller as-is meant they did not have to say anything.
As-is also does not cure active concealment. Painting over a stain, covering a crack with furniture for showings, or answering a direct buyer question falsely are all different from simply declining to repair.
Where it gets genuinely uncertain
We would be candid that the middle ground is not clean. A seller with no actual knowledge of a defect is generally in a strong position in an as-is sale even if the defect is serious. The fight is usually about what the seller knew, and knowledge is proved circumstantially — prior repair invoices, insurance claims, permit records, communications with contractors, statements to neighbors.
There is also a live question about how far a buyer’s own inspection obligations cut against a later claim. A defect that a competent inspection would plainly have caught, in a transaction where the buyer had full access and an as-is clause, is a materially weaker claim than a concealed one. We think buyers underestimate this.
Probate, trust and REO sales
A large share of the as-is sales we see in Los Angeles involve a seller who genuinely does not know the property — an executor, a successor trustee, or a lender that foreclosed. Those sellers often have a reduced disclosure obligation because the statutory exemptions can apply to certain transfers, and they usually have little personal knowledge to disclose in any event.
Our practical advice to buyers in those transactions is to invest more in inspection rather than less. The usual comfort of a seller who lived in the house and can describe its history is absent, and the disclosure package will be correspondingly thin. That is not a reason to walk away, but it changes where your money is best spent during the contingency period.
Practical suggestions
For sellers: use as-is for what it is good for, and disclose fully anyway. In our experience the combination — an as-is sale with generous disclosure — is the strongest position available, because it removes the repair obligation without creating the exposure. If you fixed something, say so and hand over the invoice.
For buyers: read the disclosures before waiving contingencies rather than after, and take the inspection seriously. If something in the disclosure package is vague, ask a specific written question. A specific question that gets a false written answer is far better evidence later than a general sense that you were misled.
Talk to us
If you are structuring an as-is sale, or you bought as-is and found something you believe was known and hidden, call us at (310) 556-9692. Reviewing a purchase agreement and disclosure package before closing is transactional work and we handle it hourly or on a flat fee. A disclosure or concealment claim after closing is litigation, and there we generally work on a basis where our fees come from any recovery with costs handled separately, all set out in a written fee agreement. No outcome is guaranteed, and past results do not predict future results.
Related reading: our real estate resources, plus what a California seller must disclose and what to do when a seller did not disclose mold.
This article reflects our own general views and opinions and is offered for information only. It is not legal advice, it is not a definitive statement of California law, and reading it does not create an attorney-client relationship between you and our firm. If an as-is sale affects a transaction you are in, please speak with a lawyer about your particular circumstances.
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