"As Is" Clauses Do Not Equal Iron-Clad Protection

Given the current state of commercial real estate, it is understandable that an owner of an under performing building may be anxious to do whatever it takes to unload the asset, but sellers must take care to ensure that even in an "as is" sale, no exposure is created as a result of negligent or intentional misrepresentations or a failure to disclose a material condition of the building. Although most purchase agreements provide that the buyer take the property "as is," this standard clause does not provide absolute protection from all claims regarding the condition of the property. A common "as is" clause seems ironclad:

The land, building, fixtures, machinery, and equipment sold under this agreement are being sold in an "as is" condition, excluding all warranties, including but not limited to warranties of merchantability and fitness for any particular purpose.