Demystifying the ‘as is where is’ basisPosted on September 24, 2013 - Featured, Investment.
In property transactions, the term “as is where is” is a term or condition of a sale where the property is sold based on whatever condition it exists in, that the buyer accepts it “with all faults”, whether or not immediately apparent.
It is not an exclusive term for property transactions though it is probably more prevalent for the sale of property because the seller lets the purchaser decide on the purchase after inspecting the property. The purchaser must accept the property, with warts and all. The purchaser cannot use the condition of the property at the time of purchase as an excuse to cancel or rescind the purchase after the sale is concluded.
”As is where is” is usually seen in advertisements for completed properties in the secondary market and auctioned property.
For example, a secondary property may have defects which can only be detected later by a contractor or plumber, but the purchaser should inspect the property with these professionals’ advice before the transaction. Auctioned properties, meanwhile, can sometimes have previous owners “squatting” in them.
Even primary properties sold by housing developers which are completed but not issued a Certificate of Completion and Compliance may be sold under an ‘as is where is’ basis. Under such circumstances, the housing developer does not need to give any warranty to the purchases or make good any defect found on the property after the sale of the property.
If the property is not completed, and the property is a residential property governed by Housing Development (Control and Licensing) Act 1966, the purchaser is given two or three years’ warranty for the property: two years for landed residential property and three years for stratified or subdivided residential property.
If the property does not get a warranty, and is sold on an ‘as is where is’ basis, the purchaser can use whatever condition of the property as leverage while negotiation is underway. The purchaser can negotiate to pay less by pointing out the cost of repair for the property. That is why a purchaser should hire a contractor to give the property a once-over to ensure the purchaser is satisfied with the condition of the house. This also applies for completed property bought from a housing developer and auctioned property.
As for the seller, the concept of ‘as is where is’ becomes a defensive mechanism. Defending the asking price of the property will hinge on the concept of ‘as is where is’. The seller can claim that any defects on the property were already considered before the asking price was announced to the world. It is an like an announcement by the seller saying, “There is something wrong with this house but if you are willing to buy it at the price I am asking, let’s make a deal.”
As a conclusion, “as is where is” is not as simple as it seems. Nowhere else does the advice of caveat emptor or buyers beware be considered more than when a property is being sold “
as is where is”.
I think I seen this somewhere, cant recall. Anyway, its a very interesting article. I think in Malaysia it is more applicable to secondary market since Build then sell is not so popular in Malaysia. As for those left over unit of primary properties, i don't think developer will want to spend extra to get lawyer to draft additional document juz to sell these leftover, unless it is those project which totally cannot sell and have plenty of leftover. Its just too difficult to impose ‘as is where is’ in greenfield projects/ primary properties because there are always latent defects which may not be able to avoid regardless of how good is the workmanship or how good is the material or even the design.
In the case of water pressure issue, buyer will not be able to seek compensation if ‘as is where is’ were to be impose. But too bad, its not applicable to Coral Project. So, Mr. Guocoland will have to bear with these complain, kekeke.