What Does “sold as-is” Really Mean?

Reading Time: 4 minutes

Key Takeaway
If you intend to sell a property "as-is", you need to make sure the APS actually reflects that no representations or warranties are being made.

I read a great blog post yesterday by David Fleming (Toronto Realty Blog).

The article recounts a recent listing experience where they included the following remark in the MLS:

"Property Being Sold In As-Is Condition With No Representations Or Warranties"

It goes on t0 describe the inability of the buyer agents to truly comprehend what that meant.

– – –

So, I figured why not break down from the legal side...

Technically, a property is sold as-is by default.

An APS can alter this presumption by including representations and warranties for the protection for the Buyer within the agreement.

If an MLS listing states that the property is being sold "as-is" - it literally just means that the Seller is saying they won't agree to any representations or warranties.

But remember, an MLS listing does not form part of the APS.

So, if the Seller ultimately does agree to a representation or warranty in the APS, then there was no real purpose for that remark.

Here are a few examples of common representations and warranties:

The Seller represents and warrants that the chattels and fixtures as included in this Agreement of Purchase and Sale will be in good working order and free from all liens and encumbrances on completion.
The Seller represents and warrants that during the time the Seller has owned the property, the use of the property and the buildings and structures thereon has not been for the growth or manufacture of any illegal substances.
The Seller represents and warrants that the existing basement apartment has received approval from relevant authorities to make said apartment legal under the Government rules and regulations, zoning by-laws and retrofit requirements as they relate both to the current permitted use.

So, if you come across a listing that says property being sold "as-is", this is simply the Seller stating that they are not willing to agree to any representations and warranties.

If you're on the Selling side and include this remark - it's your job to make sure the APS reflects this:

The buyers fully understand that this property is being sold in "AS IS" condition, with no representation or warranties provided by the seller of any kind.

Written by
Zachary Soccio-Marandola
Real Estate Lawyer

Direct: (647) 797-6881
Email: zachary@socciomarandola.com
Website: www.socciomarandola.com

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