As Is Where Is: Plain English Guide for NSW Property Buyers

Plain English Definition

"As Is Where Is" means that a purchaser agrees to buy the property in its current physical condition, including any existing structural faults, cosmetic defects, deferred maintenance, or unapproved alterations, at the time contracts are exchanged. Under this condition, the vendor gives no legal promise or warranty that the land, improvements, or inclusions are fit for purpose, undamaged, or compliant with local planning laws. If major structural issues or non-compliant renovations emerge after contracts exchange, the buyer has no right to demand that the vendor fix them, claim compensation, or pull out of the transaction.

Who This Affects

• Property Buyers: Buyers assume the full financial and logistical burden of discovering, assessing, and remediating every physical fault, illegal structure, and boundary anomaly before committing to a binding agreement.
• Vendors and Estate Executors: Sellers—particularly deceased estates, mortgagees exercising power of sale, or owners of dilapidated homes—use this clause to eliminate post-exchange renegotiations and insulate themselves from claims regarding the state of repair.
• Auction Bidders: Anyone raising a paddle at a New South Wales auction automatically buys on an unamended, unconditional basis, accepting the physical reality of the lot under the standard "as is" conditions without a statutory cooling-off safety net.

The Danger Zone: Buyer's Risk

• Undisclosed structural movement and subsidence: Reactive clay soils or cracked foundation footings can compromise load-bearing walls, leaving the buyer facing underpinning invoices often exceeding $40,000 without recourse against the former owner.
• Unapproved additions and illegal structures: A previous owner may have built an uncertified rear pergola, converted a garage into an unauthorized granny flat, or enclosed a balcony without council approval under the Environmental Planning and Assessment Act 1979 (NSW), exposing the buyer to potential council demolition orders.
• Severe termite infestations and timber rot: Subterranean termites can chew through internal wall framing, floor bearers, and roof rafters without showing obvious external symptoms, saddling the buyer with structural repair costs between $15,000 and $55,000.
• Failing plumbing, drainage, and sewer lines: Tree roots frequently invade earthenware sewer pipes or collapsed storm-water lines beneath concrete slabs, leaving the new owner with excavation and relining bills ranging from $8,000 to $25,000.
• Hazardous materials and legacy wiring: Older dwellings frequently hide degrading friable asbestos behind wet-area wall linings or obsolete cotton-sheathed electrical wiring inside the ceiling, requiring full remediation work costing $12,000 to $30,000 to meet modern safety codes.
• Water ingress and failed waterproofing membranes: Leaking second-storey bathroom floors or failing cavity flashings often reveal themselves only during sustained downpours, leading to joist rot and ceiling collapse that standard home insurance policies routinely exclude as pre-existing deterioration.

What to Check Before Signing

1. Commission a combined building and pest inspection: Hire an insured, independent building inspector and timber pest specialist to conduct a non-invasive physical evaluation, spending $500 to $900 before exchange to unearth moisture issues, structural movement, and pest activity.
2. Review the planning certificate and council records: Inspect the Section 10.7 Certificate inside the contract and order a building records search from the local council to confirm that all dwellings, pools, carports, and extensions hold valid development consents and occupation certificates.
3. Instruct your conveyancer to negotiate standard Clause 10: Ask your legal representative to review and strike out harsh vendor-added special conditions that force you to indemnify the seller against council notices or waive rights regarding patent and latent physical defects.
4. Perform an exhaustive pre-exchange physical inspection: Walk through the home with a checklist, turning on all air conditioning units, opening and closing every window, testing water pressure at multiple taps, and inspecting under sinks for signs of leaks or pest bait stations.
5. Examine the boundary lines and survey report: Compare the physical fence positions with the registered deposited plan inside the contract or order a registered surveyor’s identification report ($1,000 to $1,800) to confirm that no retaining walls, eaves, or fences cross neighboring boundaries.

Key New South Wales Rules

Every standard New South Wales property contract relies on the Law Society of NSW and Real Estate Institute of NSW (REINSW) standard Contract for Sale. Printed Clause 10 establishes that the purchaser accepts the property in its present condition and state of repair at the contract date, barring the buyer from objecting to, claiming compensation for, or rescinding on the basis of physical condition. While the Conveyancing Act 1919 (NSW) and the Conveyancing (Sale of Land) Regulation 2022 force the vendor to warrant certain title and planning matters—such as the absence of adverse road widening proposals or un-rescinded council demolition notices—they do not provide any warranty against physical deterioration or defects. Once contracts exchange without express amendments, the historic doctrine of caveat emptor (let the buyer beware) applies strictly to the dwelling’s physical state.

Real-Life New South Wales Scenario

Daniel purchased a 1970s two-bedroom villa in Parramatta at auction for $865,000, signing a standard Contract for Sale containing unamended "as is where is" acceptance provisions under Clause 10. Eager to limit upfront costs, he opted out of commissioning an independent pre-purchase pest and building inspection, relying solely on an informal walk-through during an open home. Four weeks after settlement, heavy autumn rainfall caused grey water to back up across the laundry floor, revealing a completely crushed terracotta drainage line and extensive dry rot throughout the subfloor bearers. Because the defect was an un-warranted physical flaw rather than a breached statutory title warranty, Daniel held no legal standing to demand compensation from the vendor, forcing him to pay $23,500 out of pocket to replace the sewer line and restump the subfloor. Skipping a comprehensive technical inspection before exchange turns an "as is where is" contract into a blank cheque for the vendor's deferred maintenance.

Frequently Asked Questions

Can a seller use an "As Is Where Is" clause to hide illegal construction?

No, the clause cannot protect a vendor against statutory non-disclosures under the Conveyancing (Sale of Land) Regulation 2022. If the local council has already issued an official demolition or upgrading notice that is not disclosed in the contract, the purchaser retains a statutory right to rescind before settlement. However, if unapproved building works exist without any formal council notice having been issued yet, an "as is" clause leaves the buyer responsible for fixing or regularising the work.

Does an "As Is Where Is" clause override the statutory 5-day cooling-off period in NSW?

No, it does not extinguish the buyer's cooling-off rights under Section 66S of the Conveyancing Act 1919 (NSW) for private treaty sales. If you exchange contracts with a cooling-off period, you can still use those 5 business days to commission urgent building inspections and pull out, forfeiting 0.25% of the purchase price. However, if you purchase at auction or sign a Section 66W certificate waiving the cooling-off period, you are bound immediately to the property's physical state.

Can I claim compensation after settlement if an oven or air conditioner does not work?

Generally, no, unless the contract contains a specific vendor warranty guaranteeing that all inclusions and appliances will be handed over in working order. Under standard condition 10 of the Contract for Sale, inclusions are sold in their present condition, subject to fair wear and tear between exchange and completion. If you did not test the appliances before exchanging contracts and failed to negotiate a working-order clause, you must cover the replacement costs yourself.

How does an "As Is Where Is" condition interact with NSW vendor disclosure warranties?

Vendor disclosure warranties relate strictly to legal title, planning instruments, and administrative notices, whereas "as is where is" terms govern the physical and structural condition of the land and buildings. A vendor must legally warrant that the land is not subject to an undisclosed sewer main or an impending road widening scheme under schedule 1 of the Conveyancing (Sale of Land) Regulation 2022. Conversely, the vendor is under no statutory obligation to disclose that the roof leaks, the subfloor is damp, or the retaining wall is leaning.