Understanding the "As Is Where Is" Clause in South Australia Property Contracts

Plain English Definition

"As Is Where Is" means that the buyer agrees to purchase the property in its current physical and legal condition, including all existing faults, defects, or lack of council approvals. By signing a REISA Contract with this condition, the buyer acknowledges they are satisfied with the property's state and waives the right to demand repairs or compensation from the seller for any issues discovered later.

The Danger Zone: Buyer's Risk

• Structural Integrity: The buyer inherits all latent defects, such as rising damp, foundation movement, or termite damage, which may not be immediately visible during a standard viewing.
• Council Non-Compliance: If the property has unapproved structures like a pergola, deck, or converted garage, the buyer assumes the buyer's risk of potential council fines or demolition orders after settlement.
• Functional Failures: Under a standard South Australia property contract with this clause, the seller is not required to ensure that appliances, air conditioning units, or swimming pool pumps are in working order on the day of settlement.
• Boundary and Encroachment Issues: The buyer accepts the land as it stands, meaning any fences that are off-alignment or structures encroaching on neighbouring land become the new owner’s legal and financial headache.
• Rubbish and Debris: The seller may leave the property filled with unwanted furniture or garden waste, as the "As Is" nature of the agreement often overrides the general obligation to provide "vacant possession" in a clean state.
• Limited Legal Recourse: This clause effectively acts as a shield for the seller, making it extremely difficult for a buyer to sue for misrepresentation or breach of contract regarding the property’s condition.

Real-Life South Australia Scenario

Wei, a first-time investor from Melbourne, purchased a character cottage in Port Adelaide using a REISA Contract that included an "As Is Where Is" special condition. Two weeks after settlement, a heavy downpour revealed that the internal gutters were rusted through, causing significant water damage to the original ceilings. Because Wei had accepted the property "As Is" to secure a lower purchase price, he had no legal grounds to claim repair costs from the seller. Wei was forced to pay $12,000 out of pocket for emergency roof plumbing and plastering.

The Lesson: Always conduct a professional building and pest inspection before agreeing to "As Is Where Is" terms in South Australia.