No need to be an industry insider like Isaac Toussie to know that different states of the United States will frequently view real estate matters markedly differently. This is part of what makes real estate law so very interesting, after all – as well as quite a challenge to stay on top of! Look at Alabama, for instance. There, property buyers cannot rescind their purchases even in cases of demonstrable seller fraud – when that property has been bought on a strictly “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The Yellowhammer State takes the notion of “as-is” so literally that unless somehow superseded, the terms means exactly just that, even if the seller described the property with lies.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probably lead to some jail time, but an Alabama court has ruled that as the as-is clause in the sales contract was not superseded by any other provision signed onto by both parties, the as-is clause shall be interpreted literally!
This was a rather clear-cut situation as far as that particular court saw it, but it should be noted that not everything is always as draconian as that. Such strict interpretations of an as-is clause only apply to used property in the state, and not to new developments. Such as-is clauses are also superseded in cases where the misrepresentation is not obvious and potentially harmful to health and safety.
In this case, Teer v. Johnston, however, while the misrepresentation of flooding is indeed not something immediately obvious, it was not considered harmful to health and safety, making nothing more than an inconvenience or nuisance at most. What plaintiff should have done was stipulating in the contract or the deed that pre-sale disclosures hold despite the sale!