Surprising Real Estate Case Law in Alabama
It isn’t necessary to be an industry veteran 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 – and often so challenging! Take Alabama for an example. In that state, “buyer beware” is held in a very, very high regard by the courts, such that even in cases of outright fraud buyers may have no legal recourse anyway – since the property is recognized as being sold on an “as-is” basis. That’s right: Alabama case law believes in the ancient law of caveat emptor even more than any other on the books!!
A recent case determined that an as-is clause in the sales contract not superseded by another provision will be interpreted literally, or “as-is.” 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and will probably lead to some jail time, yet in the Heart of Dixie the as-is clause is king and must be specifically superseded by some other provision agreed to by seller and buyer – or the as-is clause shall be taken literally!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. As if evidence of a peculiar regional preference for legal loopholes of all kinds, Alabama law will only hold such a strict view towards used property, not new ones. Another caveat to the caveat emptor ethos governing Alabama real estate is that misrepresentations that are not obvious but potentially harmful to health or safety will not be tolerated.
Alas for the plaintiff in Teer v. Johnston, however, while the misrepresentation was not something obvious it was not deemed harmful to health or safety, constituting an inconvenient nuisance instead. What the buyer ought to have done was stipulating in the contract or the deed that pre-sale disclosures hold despite the sale!