Nov. 23, 2009
Dear George: I'm buying a property and have agreed to the following amendment to the contract: "The home is sold in its 'as-is' condition. The buyer accepts the property in its current condition with any faults and relies solely upon their own inspection." If the property has a big material defect that the seller has hidden, do I have any recourse?
Answer: The Texas Supreme Court has made it clear that an "as-is" provision is enforceable under Texas law. In general, an "as-is" provision shifts the burden to the buyer to do his own investigations, acknowledges that the seller made no representations, and states that there is no reliance by the buyer on any of the seller's representations. However, fraud is the one big exception; the seller cannot purposely omit information or intentionally mislead the buyer. Recent cases have held that a duty to disclose a defect always exists when one party knows of the defect and the other party did not have the ability to discover it (i.e., hidden defects an inspection would not discover, such as termite damage that was covered up). Hire a good inspector and perform your due dilligence.
Dear George: I own 50% of some undeveloped property. My partner forwarded me a broker's listing agreement to sell the property for us. My partner signed the agreement and wants me to sign and return it to him; however, the broker hasn't signed it yet. Why should I sign before the broker?
Answer: Some brokers want to review the signed listings that their agents have obtained for errors before executing them. In any case, the order of the signatures does not matter. The real estate agent could very well have signed the listing agreement first, then sent it to your partner for signature, then to you for your signature. The important thing to remember is that any changes to the contract must be approved and initialed by everyone—you, your partner, and your broker.
E-mail a question to ask George & Chuck or fax it to 713-978-6684. The answers to questions in this column do not contain legal advice. If you wish to obtain legal advice, you should consult your own attorney.
