Frequently Asked Questions
"As Is"

Since the Seller Disclosure law went into effect on January 1, 2003 there has been some confusion as to whether or not a seller would be required to make the statutory seller disclosure if they chose to sell the property “AS-IS” using the MNAR Buyer Purchasing “AS-IS” Addendum.

The Buyer Purchasing “AS-IS” Addendum was designed to allow a seller to sell the property without providing any warranties for the central air-conditioning, heating, plumbing, and wiring systems used and located on the property to be in working order on the date of closing and to minimize the seller’s future responsibility or liability with respect to the condition of the property.

Selling a property “AS-IS” DOES NOT eliminate the seller’s obligation to make required disclosures regarding the property. A seller is still required to give, and a prospective buyer still has the right to receive, the required written disclosures from the seller even if the seller is demanding that the property be sold “AS-IS.” “AS-IS” is not a “waiver” of any disclosures that are required by federal state and local government regulations to be provided by the seller.

MN Statute 513.52 -513.60 (Seller Disclosure law) requires a property owner of an existing single-family residential property (with some exceptions) to make a written disclosure to a prospective buyer, prior to entering into a purchase agreement, including all material facts of which the seller is aware that could significantly or adversely affect an ordinary buyer’s use or enjoyment of the property or any intended use of the property of which the seller is aware.

The Seller Disclosure law does allow a buyer to agree to a waiver of the seller disclosure requirements under M.S. 513.52- 513.60. Such a waiver must be in writing signed by the buyer and the seller. MNAR has released a new form entitled Seller’s Disclosure Election which includes a waiver option to facilitate a waiver when desired or when appropriate. However, even though the statute allows a waiver of the seller disclosure, if a seller is considering a waiver, you should be aware of the following information.

1.	To the extent that the seller is contemplating the use of the waiver alternative, the seller should be reminded that their liability for disclosure of such material facts is limited to facts known to the best of their knowledge at the time of disclosure.
2.	This is a new law and is untested by the courts. We do not know with certainty how a court of law would rule on the scenario where the seller clearly knew of a significant material fact and convinced a buyer to sign a waiver of the seller disclosure requirements for the purpose of not having to disclose that material fact. However, there is likelihood that a waiver would not protect a seller in this example.
3.	When a seller demands a waiver from the buyer of their statutory seller disclosure obligations such a demand may have an adverse impact on the marketability of the home. In other words, it may send a “red flag” to prospective buyers that there is something wrong with the home that the seller does not want to disclose.

We understand that there are some circumstances that will necessitate such a waiver. Some examples may include an absentee property owner, estates and the sale of a foreclosed property by a lender. However, even in these circumstances the seller would still only be required to disclose material facts TO THE BEST OF THEIR KNOWLEDGE and it is in the REALTOR’S^® interest to have the seller disclose material facts of which they are aware.

There is no like waiver for real estate licensees. MNAR successfully pursued legislation requiring seller’s to disclose material facts since, to a large degree, REALTORS^® must rely on sellers to know material facts regarding the property. All real estate licensees must disclose ALL material facts (not limited to physical conditions of the property as is found in the seller disclosure law) of which they aware that could adversely and significantly affect an ordinary purchaser’s use or enjoyment of the property or any intended use of the property of which they are aware. Therefore, as a licensee, you are required to disclose material facts for all property types (residential and commercial) and you may not waive this duty of disclosure.

PLEASE NOTE: A waiver of the disclosure requirements of M.S. 513.52-513.60 does not waive, limit or abridge any obligation for seller disclosure created by any other law. There are numerous other federal, state and local government disclosures required to be given by property owners at time of sale. Some examples include septic system, wells, valuation exclusion, lead-based paint, and local government disclosure requirements. A seller does not have the ability to waive these disclosures requirements and must provide the appropriate disclosure to prospective buyers regardless of whether or not the buyer agreed to waive the seller disclosure requirements under M.S. 513.52 - 513.60 and regardless of whether or not the property is being sold “AS-IS.”

To summarize, if a seller demands that the property be sold “AS-IS”, the seller still must provide either;

1.	a Seller's Property Disclosure Statement;
2.	an independent third-party inspecting report with any additions or corrections; or
3.	a waiver of M.S. 513.52 - 513.60. In the rare event that a waiver is used, the seller would still be required to provide a prospective buyer with written information regarding other required disclosures as described above.

The MNAR Forms Committee added language on lines 8-11 of the Buyer Purchasing “AS-IS” Addendum noting that the buyer has received either the Seller’s Property Disclosure Statement or the Seller’s Disclosure Election.