An “As-Is” Clause Does Not Permit Fraud By The Seller of Real Estate.

In Napcor Corporation v. JP Morgan Chase Bank, NA, Plaintiff purchased a large commercial building from Defendants. Prior to the sale, the building’s roof allegedly leaked, but rather than replace the roof, a second roof was constructed over the first.  This allegedly did not fix the leak. 

The building was then listed for sale, and the listing stated that the building had a “new roof in 1994 (tear off).”  In 1996, Plaintiff purchased the building for over $1.3 million and the contract stated that the Plaintiff agreed to accept the building “as is”.  After moving into the building, Plaintiff allegedly found the leakage problem and over the course of several years, three sections of the roof blew off. Plaintiff then filed suit for fraudulent misrepresentation, and was awarded a $1.2 million judgment by a jury.  Defendant appealed based, in part, on the exclusion of evidence that Plaintiff had agreed to accept the building “as is”.

The Illinois Appellate Court (2d Dist. 2010) affirmed the judgment, finding that the “as is” clause in the contract did not preclude Plaintiff from claiming it relied on the alleged misrepresentation in the listing, and the clause also did not serve as a defense to fraud.

DeBlasio & Donnell LLC has extensive experience in real estate, construction and fraud litigation.  For more information, contact the firm at www.dd-lawfirm.com.

Disclaimer: While DeBlasio & Donnell LLC welcomes communications via its website, please be aware that communicating any information to  DeBlasio & Donnell LLC or any of its attorneys through its web site or via any other method without a formal engagement with the Firm does not constitute or create an attorney-client relationship between you (or any other users, senders or recipients) and  DeBlasio & Donnell LLC or any of its attorneys. For your protection, please do not send us confidential information until you have spoken with one of our lawyers and received authorization to send that information to our Firm.  Thank you.