Be Careful When Buying Used Property in Alabama
No need to be an industry insider like Isaac Toussie to know that different jurisdictions can handle real estate matters differently. 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!
The Yellowhammer State takes the notion of “as-is” so literally that unless somehow superseded, the terms means exactly just that, even if the seller described the property with lies. In this particular case, a pre-sale misrepresentation was made that was only found out (that is, proven false) post-sale. Most anywhere else that’s just fraud and will probably lead to some jail time, but an Alabama court has ruled that as the as-is clause in the sales contract was not superseded by any other provision signed onto by both parties, the as-is clause will be interpreted literally!
This was a rather clear-cut situation as far as that particular court saw it, 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. Another caveat to the caveat emptor ethos governing Alabama real estate is that misrepresentations that are not obvious but potentially harmful to health or safety will not be tolerated.
Alas for the plaintiff in Teer v. Johnston, however, while the misrepresentation was not something obvious it was not deemed harmful to health or safety, making nothing more than an inconvenience or nuisance at most. What plaintiff ought to have done was to provide either in the sales contract or the deed that pre-sale disclosures should survive the execution of the deed!