The As Is Contract and Regular Florida Realtors/Florida Bar Contract forms are essentially the same with the following exceptions:
1. Heading. Of course, the inclusion of “As Is” in the heading sometimes draws concern and can create minor angst for Sellers since they don’t want Buyers to get the impression that the Property is substandard.
2. Inspection Period. The biggest difference is in the Inspection Clause under Paragraph 12 of the As Is Contract compared to the Regular Contract. Under the Regular Contract, the Buyer has the earlier of 15 days after the Effective Date of the Contract, or 5 days prior to closing, to complete inspections and deliver notice to Seller. Seller has 5 days from receipt to obtain repair estimates and deliver to Buyer, or to obtain a second inspection if Seller disagrees with Buyer’s inspection report. If Seller obtains a second inspection and the reports differ and the parties can’t agree, the parties jointly share the cost of a third inspection which results are binding on both parties. In contrast, the As Is Contract gives the Buyer a “free look” at the Property during the Inspection Period. The Inspection Period, if left blank, is 15 days after Effective Date. If Buyer determines in Buyer’s sole discretion that they no longer want the Property, Buyer can terminate by notifying Seller prior to the Expiration of the Inspection Period. Many real estate attorneys prefer the As Is Contract form over the Regular Contract form for both Buyers and Sellers since the parties don’t have to argue over whether the item is in “Working Condition” or whether it is a “Cosmetic Condition” under the Contract. Consequently, the parties typically can reach an agreement with regards to the repair items and proceed with closing.
3. As Is Maintenance Requirement. Even though the Buyer is purchasing the Property in “As Is” condition, the Seller still has to maintain the Property up to Closing in the same condition existing as of the Effective Date of the Contract. Consequently, if the air conditioning system stops working after Buyer has completed their inspections, but prior to Closing, Seller has to pay to repair the air conditioning system under the As Is Maintenance Requirement under Paragraph 11 of the As Is Contract.
4. Permits. Under the Regular Contract, upon Buyer’s notice to Seller of permit issues, Seller has to close out open or expired permits and obtain permits for any unpermitted improvement up to the Permit Repair Limit under Paragraph 9 of the Regular Contract. In contrast, under Paragraph 12c of the As Is Contract, Seller just has to cooperate in assisting Buyer with the permits, but Seller does not have to spend any money to do the same.
5. Waiver. Under Paragraph 18x of the As Is Contract, Buyer waives any claims against Seller, and to the extent allowed by law, against any realtor involved in the Contract negotiations for any defect or damage existing at Closing but discovered later by Buyer or anyone claiming by, through, under or against the Buyer. This Waiver is not included in the Regular Contract nor is it included in Rider K, the As Is Rider.
Depending on the circumstances, the As Is Contract might be the preferred contract for the parties over the Regular Contract. For instance, the As Is Contract form is used in short sale transactions and with bank owned properties. In situations where the Buyer wants the benefit of the Repair, WDO and Permit Limits but still wants a “free look” at the Property, then use the Regular Contract and attach Rider L, the Right to Inspect and Right to Cancel Rider. As always, should you have any questions regarding any of the foregoing, please do not hesitate to contact a member of the Berlin Patten team.
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.
3700 S. Tamiami Tr, Suite 200, Sarasota, FL 34236 P (941) 954-9991 F (941) 954-9992
100 W. Venice Avenue, Suite A, Venice, FL 34285 P (941) 955-9991 F (941) 953-9992
8130 Main Street, Suite 206, Lakewood Ranch, FL 34202 P (941) 907-9022 F (941) 907-9024