A buyer who discovered that her new house was contaminated with mold can sue the seller, even though the house was purchased “as is” and the seller specifically said there might be mold in it, according to the Wisconsin Court of Appeals.

Catherine Fricano bought the house from a bank that had acquired it in a foreclosure. The house had sustained serious water damage, and before selling it, the bank twice paid for mold remediation and repair work.

The bank’s contract with Fricano said that the house was being sold “as is,” that it might have had mold in it in the past, that it might currently have mold in it, and that the bank made no guarantees whatsoever about the condition of the building. The bank also said that since it had acquired the home through foreclosure, it had “little or no direct knowledge about the condition of the property.”

Fricano eventually discovered that mold was rampant, and the house had to be stripped down to its studs.

She sued the bank, and the court awarded her $50,000 in damages. Why? Because the bank lied when it said it had “little or no direct knowledge” about the house. In fact, it knew very well there was mold in it because it had twice paid to have it fixed.

The moral of the story is that a contract to sell a property “as is” won’t necessarily protect a seller if the seller goes on to make statements about the property that simply aren’t true.