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A sale without legal warranty: What does it involve?

Published on October 8, 2019

When we see a home for sale “without legal warranty,” we automatically think it must have a lot of issues. But that’s not necessarily the case. This term is commonly used with estate sales or foreclosed homes.

If a home is sold without a legal warranty, this condition must be clearly included in the Offer to purchase and the Declaration of the seller. A notary is the best person to draft the clause, to make sure it is compliant and perfectly meets the buyer’s and seller’s needs.

It’s important to know that a “sale without legal warranty” does not exempt owners from declaring known defects in the building. However, buyers cannot hold sellers responsible for a hidden defect discovered after the sale.

“At the buyer’s risk and peril”

More restrictive, this term excludes the warranty against hidden defects, including problems known to the seller. This means buyers cannot take legal action under the warranty of quality. So, you’re buying the home as is, flaws and all!

But this term does not remove the sellers’ responsibility to comply with the requirements of the law and not to deceive buyers. Therefore, buyers can take legal action if they can prove that their agreement was influenced by a seller acting in bad faith. In other words, buyers have to prove that they agreed to the deal because they were influenced by the seller’s lies, schemes or failure to disclose an essential element of the contract. 

“Perfect for DIY enthusiasts”

Another term we often see in listings is “perfect for DIY enthusiasts,” which sends a clear message to potential buyers: work needs to be done on the property for it to achieve its potential. However, this term has no legal value, so buyers can still benefit from the legal warranty against hidden defects, and sellers have a responsibility to declare known defects in the property.

Using this term may attract buyers looking for a bargain. And it can help put sellers in contact with buyers who are really interested in the property and ready to buy it in its present condition. 

Here, the pre-sale inspection is doubly important for buyers, as it provides an assessment of the property’s current condition. Buyers can calculate the expected renovation costs and then determine whether the price in the offer to purchase is fair.