| The Freshman |
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| If a property is sold "as is", the purchaser should understand what it means |
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 On the introduction of an estate agent, Ms Ng viewed a residential unit sold with the rooftop and liked it. In the process of inspection, the agent pointed out that alterations had been made to the interior of the unit which included converting the kitchen to make it open-plan and transforming the balcony into a part of the sitting room so as to increase the floor area. As the asking price of the unit was about 20% lower than its market value, Ms Ng, although knowing that the flat had been altered, decided to buy it. There was a clause in the provisional agreement for sale and purchase listing in detail the changes to the interior and stating clearly that the vendor was selling the property "as is", with no guarantee that the changes would in any way conform with the provisions of the Buildings Ordinance (Cap. 123 of the Laws of Hong Kong). Ms Ng also declared that she had accepted all alterations. Ms Ng did not quite understand the meaning of the clause and her declaration, but signed the provisional agreement for sale and purchase without asking about the details.
After that, Ms Ng instructed a solicitor she knew to deal with the purchase of the property. The solicitor told her that it was not clear whether the changes to the interior listed in the provisional agreement were illegal. However, as the unit was sold "as is" and she had accepted the alterations in the provisional agreement, she might have difficulty in refusing to complete on that ground. If she wanted to resell it in future, a future purchaser might question her title because of the alterations, or Ms Ng, as vendor, would have to restore the interior to its original state before disposing of the property.
After serious consideration, Ms Ng felt that it was not worth the trouble, as there might be difficulty in future to sell the property. Restoring the flat to its original state would cost her a fortune. If she did not do so, the future purchaser might force the price down on that. So she decided to default. She lost the deposit subsequently, and also had to pay the agent commissions payable by both sides.
If Ms Ng had got an idea of the legal meaning of "as is", she would have been able to make a better decision and avoid losing money. Under the Practice Regulation, the agent acting for Ms Ng shall explain the terms of the provisional agreement to her. If there are anything in the agreement she does not understand, the agent should advise her to seek legal advice.
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