As Is As Woes

The new Contingencies and Clauses addendum to the Regional Sales Contract made significant changes to the As-Is clause. Specifically, in addition to the old language, there are a list of paragraphs and clauses from the body of the Regional Sales Contract that may be explicitly deleted by checking a box in the As-Is clause. This allows purchasers to agree that a property will be purchased "As-Is . . . except for Termites" for instance. It also makes it possible for the Seller to be very explicit about what it is that he or she won't fix, to avoid confusion or disputes closer to closing. One source of frequent confusion/conflict when older versions of the As-Is clause were used was the question of who was responsible for curing notice of violations from HOA and Condo associations involving the physical condition of the Property.

For instance, a Seller believing they had sold their property as-is may still be required to replace carpet if they installed less than the Condo association's minimum amount of padding, or a townhouse owner might be required to power wash their siding after a pre-sale inspection by the association which resulted in a notice of violation. This is because paragraph 19, Title, requires sellers to comply with all such notices of violation. Because these notices of violation had to do with the physical condition of the property, sellers using the As-Is clause often felt they shouldn't have to make the repairs, even though the plain language of paragraph 19 seemed to say they would.

The check box meant to address this issue may be overly broad in its reach. It says that all clauses related to compliance with Homeowners and Condominium associations are deleted.

That would appear to not only delete the clauses having to do with notices of violations, but might also delete the requirement to pay past due assessments, to pay special assessment affecting the property on the settlement date, or even the need to adjust the dues to the settlement date.

I suggest that any purchaser who receives a request to check this box from the seller add the following language after the pre-printed sentence "except those having to do with the payment of regular and special assessments, delinquencies and penalties. The Seller will be responsible for paying all sums due the association or management company prior to the settlement date."

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