Buying ‘As Is, Where Is’? What You Need to Know Before You Sign

‘As is, where is’ property sales are becoming more common in New Zealand, especially in areas affected by natural disasters or where properties have unconsented work or insurance challenges. These sales can look like a bargain, but they come with important legal and financial risks.

If you’re considering buying a property on these terms, it’s essential to understand what you’re really taking on. The good news is that even in an ‘as is, where is’ sale, you are not without legal protections. But you do need to tread carefully.

‍What ‘As Is, Where Is’ Really Means

In simple terms, buying a property ‘as is, where is’ means you are accepting it in its current condition. The seller is not agreeing to make any repairs or improvements, and they are not offering any warranties or guarantees about the state of the property.

This type of sale is often used for homes that are quake-damaged, have unconsented alterations, or are being sold by mortgagee. In these cases, the seller may not have full knowledge of the property’s condition, or may be unwilling or unable to make disclosures or repairs.

‍What You’re Still Legally Entitled To

Even with ‘as is’ wording in the contract, some legal protections still apply under New Zealand law:

• Misrepresentation: The seller cannot provide false or misleading information about the property.‍
• Title: You are still entitled to receive good legal title to the property. This includes checking for encumbrances, easements, covenants, or cross lease complications.‍
• Disclosure obligations: If the seller is aware of significant issues, such as unconsented building work or ongoing disputes, they may still be required to disclose them.

An ‘as is’ clause does not override your rights under the Contract and Commercial Law Act or the Fair Trading Act.

‍Do Your Due Diligence - Thoroughly

When buying ‘as is, where is,’ due diligence is not optional - it is essential. This includes:

• Obtaining a comprehensive building inspection
• Reviewing the LIM report and title
• Requesting EQC records and insurance history
• Checking for unconsented work or code compliance issues
• Talking to your insurer and lender before signing

Some insurers will not cover high-risk properties, and many banks will not lend on them. A lawyer can help you identify red flags in the contract and draft conditions that protect your interests.

‍Finance, Insurance and Settlement Hurdles

Because of the risks involved, lenders and insurers often take a stricter approach to ‘as is’ properties. You may face delays or even find that finance or insurance is not available. This can put your deposit at risk if you go unconditional too early.

Make sure you have pre-approval and insurance confirmation before committing to the purchase. Your lawyer can also advise on any GST or tax implications that may apply, especially if the seller is GST-registered or the property has mixed-use.

Buying ‘as is, where is’ does not have to mean buying blind. With the right advice and thorough due diligence, you can make an informed decision and avoid costly surprises.

Thinking about buying an ‘as is, where is’ property? Our property team can help you review the agreement, draft protective conditions, and check for risks like title issues, insurance gaps, or GST implications, so you can move forward with confidence.

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