questions & answers

Question: The house is under contract "as is", delay in closing (1 month, then 3 more months due to divorce not yet finalized). Owner-to-be is paying rent month to month. Without permission or notice has rectified plumbing, tree, electric situations and now wants seller-to-be to pay expenses. Since it is under contract "as is", does seller-to-be have to pay anything?

Answer: The house is under contract "as is", delay in closing (1 month, then 3 more months due to divorce not yet finalized). Buyer is paying rent month to month. Without permission or notice has rectified plumbing, tree, electric situations and now wants seller to pay expenses. Since it is under contract "as is", does seller have to pay anything? Typically, the Residential Resale Real Estate Purchase Contract, provided by the Arizona Association of Realtors, is the contract used for real estate transactions in Arizona. This contract provides two terms regarding Seller and Buyer’s obligations for repair, maintenance and loss or damage of the property prior to the close of escrow. Section 5a, “Seller Warranties,” provides that Seller is responsible for maintenance and repair of the property until the earlier of either possession or Close of Escrow. Similarly, section 8b, “Risk of Loss,” stipulates that Seller maintains any risk of loss or damage until the earlier of either possession or Close of Escrow. Section 1e, “Possession,” defines possession as Seller providing Buyer with “occupancy, existing keys and/or means to operate all locks, mailbox, security system/alarms, and all common area facilities.” Accordingly, once a Buyer takes possession of the property the responsibility to maintain and repair the property shifts to Buyer, as does any risk of loss or damage. In Arizona, a buyer may agree to purchase the property “As Is” which the “As Is” Addendum to the Residential Resale Real Estate Purchase Contract defines as “in its existing condition” with no warranty being made by the seller as to the condition, zoning or fitness of the property. However, a buyer is still obligated to make certain disclosures regarding the property and allow the buyer to make a reasonable inspection of the property. S. Development Corp. v. Pima Capital Management Co., 201 Ariz. 10, 31 P.3rd 123 (2002) In some cases, Buyer and Seller may make an agreement for one party to either prepossess or post-posses the property. In either instance, the parties often enter into a separate agreement that establishes each party’s rights and obligations. A lease agreement may provide terms that address particular issues. A.R.S. 33-1314. The Arizona Residential Landlord and Tenant Act (“ARLTA”) generally governs property lease agreements with few exceptions. It is the landlord’s obligation to ensure the property is fit and habitable for the tenant. A.R.S. 33-1324 The tenant has an obligation to “not deliberately or negligently destroy, deface, damage, impair or remove any part of the premises or knowingly permit any person to do so” and to “promptly notify the landlord in writing of any situation or occurrence that requires the landlord to provide maintenance.” A.R.S. 33-1341 A tenant is only permitted to take action and recover damages from the landlord under specific guidelines as explained in A.R.S. 33-1363, such as, with notice or in the event of an emergency.