Q. A seller wants me to list his property for sale in "as is" condition, but I am aware of defects in the property. What should I do?
A. You must reform prospective purchasers of the defect(s). The N.C. Real Estate License Law imposes a duty on you as a licensee to reveal all material facts about a property which you know or should know. You may not remain silent If you are aware of a defective condition of the property, or you are aware of the facts which would lead a reasonable agent to believe that there may be defects In the property. You have a duty to disclose these facts to prospective buyers regardless of whether your seller wants to sell the property "as is." If your seller demands that you keep defects to yourself, do not take the listing
Although the North Carolina Appellate courts have not ruled on the effect of "as Is" clauses In real estate contracts, court decisions from other states have generally held that "as Is" provisions do not protect sellers (or agents) from liability for making false representations about real estate or from fraudulent activities In connection with real estate sales.
For example, In a case from Florida, the court ruled In favor of a purchaser when It determined that the seller, with the cooperation of his agent, arranged with a termite inspector to issue a "clean" report after receiving a report from another inspector who observed evidence of active termite inspection. Although the seller and his agent argued that the "as Is" provision In the sales contract Immunized them from liability, the court found fraud In the suppression of the first termite report and thus found In favor of the purchaser.
And In a case from New Mexico where a listing agent listed In the MLS that a condominium was In "all top shape" when, In fact, It had major structural defects, the court held that the "as Is" provision In the sales contract would not insulate the agent from liability for his false statement that the condo was in "all top shape".
CAVEAT: If you offer for sale real estate which you know (or reasonably should know) is defective, you must disclose the defects to prospective purchasers even though the property is being sold in "as is" condition. And if your seller demands that you keep defects to yourself, do not take the listing!