"As Is Where Is": Unpacking Buyer's Risk in Your Victoria Property Contract
1. Plain English Definition
"As Is Where Is" means you are purchasing the property in its exact current condition, complete with all its existing faults, defects, and issues, whether visible or not. This clause places the entire responsibility on the buyer to thoroughly inspect the property and accept it precisely as it stands on the settlement date, without recourse for any subsequent discoveries.
2. The Danger Zone: Buyer's Risk
- Hidden Defects: You accept all structural, electrical, plumbing, or pest issues that might not be apparent during initial inspections, potentially costing tens of thousands of dollars in repairs post-settlement.
- No Recourse: Under a Section 32 / REIV Victoria property contract, this clause severely limits your ability to claim compensation or demand repairs from the vendor for any problems discovered after signing.
- Unexpected Costs: Budget for significant expenses like roof repairs, foundation work, or asbestos removal, as these become the buyer's financial burden immediately after settlement.
- Building Report Limitations: Even with a pre-purchase building report, an "As Is Where Is" clause can override your ability to negotiate or withdraw based on minor defects found, increasing your buyer's risk.
- Future Liability: You inherit any environmental or compliance issues associated with the property, which could lead to legal obligations or further costs under Victoria law.
- Time Pressure: The pressure to conduct exhaustive due diligence before committing to an "As Is Where Is" sale can be intense, especially for first-home buyers or investors in a competitive market.
4. Real-Life Victoria Scenario
Wei, a keen Chinese-Australian investor looking for a bargain in Geelong, purchased an older commercial property with an "As Is Where Is" clause in his Section 32 / REIV contract. He relied on a quick visual inspection and didn't commission a full building report. After settlement, he discovered significant termite damage in the roof timbers and a non-compliant electrical system, costing him over $45,000 in unforeseen repairs. Wei learned the hard way that an "As Is Where Is" clause shifts all the buyer's risk onto him, with no legal avenue to claim against the vendor.