As Is Where Is Clause in ACT Property Contracts

Plain English Definition

"As Is Where Is" means the purchaser agrees to take the property in its current physical state, condition, and repair at the date of exchange, accepting all existing structural defects, maintenance backlogs, and unapproved alterations. Under an Australian Capital Territory property contract, this condition effectively prevents the buyer from demanding repairs, seeking compensation, or delaying settlement due to physical imperfections or wear and tear. It reinforces the doctrine of caveat emptor (buyer beware) by transferring the risk of tangible property defects wholly onto the purchaser from exchange onwards.

Who This Affects

• Purchasers: Bear immediate liability for repairing pre-existing defects, non-functioning appliances, drainage failures, or unapproved structures without any right of price abatement against the vendor.
• Vendors: Secure contractual immunity from demands to repair goods, paint finishes, rectify illegal building work, or remediate structural defects prior to completion.
• Estate Executors and Mortgagees: Rely on the clause in deceased estate or repossession sales to legally liquidate real estate assets without assuming representations regarding building condition or functionality.

The Danger Zone: Buyer's Risk

• Unapproved Building Works: If an unapproved pergola, deck, or garage conversion has been constructed on the land, an "As Is Where Is" clause limits your capacity to demand that the seller obtain retrospective building approval from Access Canberra or foot the bill for council-mandated demolition.
• Appliance and Plant Breakdown: Heating systems, evaporative cooling units, hot water services, and cooktops documented as part of the sale are accepted in their baseline condition; if a ducted gas heater fails right after exchange, repair costs fall entirely upon the buyer.
• Latent Structural Failures: Foundation settlement, rising damp, cracked load-bearing walls, and termite degradation that were not apparent during a casual inspection become the purchaser's financial responsibility upon completion.
• Financial Institution Retentions: Mortgage lenders conducting valuation inspections prior to loan drawdown may flag significant defects; if the lender imposes a retention or refuses to advance funds until repairs occur, the buyer cannot compel the vendor to fix the issues, creating severe settlement default risks.
• Site Cleanliness and Residual Debris: Sellers may leave behind builder's rubbish, hazardous materials, disused car bodies, or abandoned household waste under the guise that the property was accepted in its current physical presentation.
• Surrender of Standard Requisition Rights: Standard contractual protections allowing buyers to claim compensation or rescind for physical discrepancies prior to settlement are systematically overridden by this sweeping special condition.

What to Check Before Signing

1. Examine the Required Seller Disclosure Documents: Review the mandated ACT building and compliance inspection reports attached to the contract, paying forensic attention to unapproved work schedules, floor plan discrepancies, and listed drainage faults.
2. Engage Independent Trade Specialists: Commission independent invasive or specialist inspections—such as a drain camera survey, roof cavity assessment, or ducted HVAC inspection—if the standard seller-provided report flags potential degradation.
3. Cross-Check Territory Planning Records: Match physical site improvements against the ACT Planning and Land Authority (ACTPLA) building file via Access Canberra to uncover undocumented additions that risk territorial compliance orders.
4. Test Every Inclusion Thoroughly: Physically test the ducted heating, reverse-cycle air conditioning, swimming pool pumps, stovetop burners, garage motors, and window locks during the open home or pre-exchange viewing.
5. Draft Protective Special Condition Carve-Outs: Instruct your conveyancer to amend the clause so that the seller warrants all mechanical fixtures, plumbing, and electrical switchboards remain in operational working order at settlement.

Key Australian Capital Territory Rules

In the ACT, property transactions rely on the standard ACT Contract for Sale published by the ACT Law Society. Unlike some jurisdictions, the Civil Law (Sale of Residential Property) Act 2003 (ACT) mandates that the seller must provide a prescribed disclosure package—including building, pest, and compliance inspection reports alongside an energy efficiency rating (EER). While a seller cannot contract out of providing these statutory reports or exclude statutory warranties regarding title, an "As Is Where Is" special condition operates to negate common-law obligations and modify standard condition provisions regarding the physical repair and working order of chattels. Purchasers forfeit their five-business-day statutory cooling-off period if a Section 17 certificate is signed, meaning any acceptance of an "As Is Where Is" term becomes binding immediately upon exchange.

Real-Life Australian Capital Territory Scenario

Daniel bought a freestanding home in Belconnen at private treaty, accepting an "As Is Where Is" special condition after glancing cursorily at the seller's mandatory disclosure package. The contract exchanged with an agreed price of $820,000, but when Daniel conducted his pre-settlement inspection, he discovered the ducted gas heating unit had completely seized and the backyard deck lacked compliance documentation from Access Canberra. His conveyancer advised that the executed special condition extinguished any right to force the vendor to replace the heating unit or fund the retrospective approval process. Daniel was forced to settle on schedule and subsequently paid $11,200 for a new reverse-cycle heating system alongside $5,800 in certifier fees, structural plans, and government levies to legalise the deck. Early physical testing of major fixtures coupled with targeted contractual amendments protects capital far better than retrospective disputes.

Frequently Asked Questions

Can an "As Is Where Is" clause override the mandatory seller disclosure pack in the ACT?

No. The Civil Law (Sale of Residential Property) Act 2003 (ACT) requires the vendor to supply specified documents, including pest, building, and conveyancing inquiry reports. A special condition cannot extinguish the statutory obligation to disclose these documents; however, it effectively warns the purchaser that the seller will not rectify any faults, defects, or compliance absences revealed inside those reports.

Does "As Is Where Is" prevent a buyer from doing a pre-settlement inspection?

No, the purchaser retains the standard contractual right to conduct a final inspection under the ACT Contract for Sale prior to settlement. The crucial limitation is that you cannot use the inspection to force the seller to repair items or clean debris if those defects were already present at exchange. The inspection serves strictly to verify that the property has not suffered fresh deterioration or damage between contract exchange and completion.

What happens if an inclusion breaks down between contract exchange and settlement?

Standard contract conditions generally oblige the vendor to deliver the property and inclusions in the condition they were in at exchange, fair wear and tear excepted. However, a poorly drafted "As Is Where Is" clause may create ambiguity over whether the vendor is bound to maintain working appliances. Buyers should ensure their solicitor inserts explicit wording stating that all mechanical appliances, electrical fittings, and hot water systems must remain in functional working order up to the date of completion.

Can a buyer terminate the contract if unapproved building work is found after signing?

Under an ACT Contract for Sale, terminating for unapproved building work is exceedingly difficult if the works were identifiable from the attached territory compliance reports or if the contract contained an express acceptance of unapproved structures. If an "As Is Where Is" clause is paired with a specific unapproved structure acknowledgement, the purchaser accepts the administrative risk and potential demolition liabilities outright. Termination is generally only permissible where the vendor fraudulently concealed orders or breached mandatory disclosure requirements under ACT law.