Buying or selling a home is a complicated process filled with legal and practical pitfalls that can cause problems for both the buyer and seller. One of the most important steps that a person engaged in a transaction with potential legal issues must take is to speak with a good lawyer who can navigate the process and make sure their rights and interests are protected to the fullest extent possible. A good lawyer can also make sure that the buyer or seller understands all the implications of contractual language. In a home sale, every word in the agreement is important and can alter the rights of everyone involved in the transaction. One or two seemingly insignificant words can entirely change the rights and protections that a party may normally receive under the law. The Prejeans found out the hard way. In their case, a combination of a few termites, some water, and the two little words “as is,” led to a massive headache and loss of money when they purchased a home in Houma, Louisiana.
The Prejeans entered into a purchase agreement to buy the house in Houma from John Monteiro. John’s wife acted as the realtor. Prior to closing the sale, the Monteiros disclosed that the house had previously been infested with termites. The Prejeans had Terminex inspect the house. Termites were found living in the house and a later home inspection found defects in the house such as a wet spot on the wall in the kitchen and standing water in the same location, among other issues. The report prompted the Prejeans to request that Mr. Monteiro make repairs, treat the home for termites, and acquire a termite treatment plan from Terminex. The Prejeans retained a right to inspect the house, including opening up the walls to ensure that termites and moisture were not present, before closing the sale, but chose not to exercise those rights. Instead, the Prejeans executed an Act of Cash Sale, providing that the sale was “as is” and waiving all warranties on the property.
Following the completion of the sale, the Prejeans began renovating the home but had to halt the renovations when they found that there was extensive termite damage and infestation combined with water damage. The Prejeans filed a lawsuit against the Monteiro estate and against Ms. Monteiro as the acting realtor. Mr. Monteiro passed away before the lawsuit was filed.