Surprising Real Estate Case Law in Alabama
No need to be an industry insider 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! Look at Alabama, for instance. 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. Yes, it’s true: Alabama case law takes the old dictum of caveat emptor very, very seriously, to the point of, in effect, allowing for otherwise illegal activity!
A recent case determined that an as-is clause in the sales contract not superseded by another provision will be interpreted literally, or “as-is.” That’s right, it’s really been upheld that misrepresentations are entirely legal under that basis.. Normally, this would constitute fraud, yet in the Heart of Dixie the as-is clause is king and must be specifically superseded by some other provision agreed to by seller and buyer – or the as-is clause shall be interpreted literally!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. Such strict interpretations of an as-is clause only apply to used property in the state, and not to new developments. 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.
In this case, Teer v. Johnston, however, while the misrepresentation of flooding is indeed not something immediately obvious, it was not considered harmful to health and safety, constituting an inconvenient nuisance instead. What plaintiff ought to have done was stipulating in the contract or the deed that pre-sale disclosures hold despite the sale!