A Tennessee residential real estate purchase agreement (“Contract for Sale and Purchase of Real Estate”) is a contract which commits a buyer to an offer to purchase real estate, according to specific terms agreed by the buyer and seller. Negotiated specifics include the purchase price, financing method, closing date, and more.
Do Sellers in Tennessee Have To Disclose Property Defects?
Tennessee does require real estate sellers to disclose any material defects with a property. In most cases, this is through a standardized disclosure form provided by statute, but any disclosure which provides the required information is valid.
Unlike most states, however, Tennessee allows waiver of the property condition disclosure, if both the buyer and seller execute a written disclaimer that the buyer assumes all responsibility to discover defects, taking the property “as-is.” Tennessee also exempts the following residential sales from the disclosure statute:
- Court-ordered sales and transfers
- Sales by foreclosure or other debt default
- Transfer as part of the execution of a will or estate
- Transfer to a spouse, parent, or child
- Transfers to or from a government entity connected with housing
Required Seller Disclosures in Tennessee
Tennessee sellers of residential real estate must make the following disclosures, as appropriate, in order for a real estate purchase agreement to be considered legally binding:
- Tennessee Residential Property Condition Disclosure Form: Discloses material defects with a property that are known to the seller at the time of sale, and details any potential issues and conditions that may affect the value of the property.
- Lead-Based Paint Disclosure: Any home constructed earlier than 1978 must come with a disclosure upon the transfer of the property which includes any information about the presence of lead on the premises, as well as educational materials that communicate the health risks associated with lead exposure.
Sources
- 1 Tenn. Code § 66-5-202
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With regard to transfers described in § 66-5-201, the owner of the residential property shall furnish to a purchaser one of the following:
(1) A residential property disclosure statement in the form provided in this part regarding the condition of the property, including any material defects known to the owner. Such disclosure form may be as included in this part and must include all items listed on the disclosure form required pursuant to this part. The disclosure form shall contain a notice to prospective purchasers and owners that the prospective purchaser and the owner may wish to obtain professional advice or inspections of the property. The disclosure form shall also contain a notice to purchasers that the information contained in the disclosure are the representations of the owner and are not the representations of the real estate licensee or sales person, if any. The owner shall not be required to undertake or provide any independent investigation or inspection of the property in order to make the disclosures required by this part; or
(2) A residential property disclaimer statement stating that the owner makes no representations or warranties as to the condition of the real property or any improvements thereon and that purchaser will be receiving the real property “as is,” that is, with all defects which may exist, if any, except as otherwise provided in the real estate purchase contract. A disclaimer statement may only be permitted where the purchaser waives the required disclosure under subdivision (1). If the purchaser does not waive the required disclosure under this part, the disclosure statement described in subdivision (1) shall be provided in accordance with the requirements of this part.
Source Link - 2 Tenn. Code § 66-5-209
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The following are specifically excluded from this part:
(1) Transfers pursuant to court order including, but not limited to, transfers ordered by a court in the administration of an estate, transfers pursuant to a writ of execution, transfers by foreclosure sale, transfers by a trustee in bankruptcy, transfers by eminent domain and transfers resulting from a decree of specific performance;
(2) Transfers to a beneficiary of a deed of trust by a trustor or successor in interest who is in default; transfers by a trustee under a deed of trust pursuant to a foreclosure sale; or transfers by a beneficiary under a deed of trust who has acquired the real property at a sale conducted pursuant to a foreclosure sale under a deed of trust or has acquired the real property by a deed in lieu of foreclosure;
(3) Transfers by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship or trust;
(4) Transfers from one (1) or more co-owners solely to one (1) or more co-owners. This subdivision (4) is intended to apply and only does apply in situations where ownership is by a tenancy by the entirety, a joint tenancy or a tenancy in common and the transfer will be made from one (1) or more of the owners to another owner or co-owners holding property either as a joint tenancy, tenancy in common or tenancy by the entirety;
(5) Transfers made solely to any combination of a spouse or a person or persons in the lineal line of consanguinity of one (1) or more of the transferors;
(6) Transfers between spouses resulting from a decree of divorce or a property settlement stipulation;
(7) Transfers made by virtue of the record owner’s failure to pay any federal, state or local taxes;
(8) Transfers to or from any governmental entity of public or quasi-public housing authority or agency;
(9) Transfers involving the first sale of a dwelling provided that the builder offers a written warranty;
(10) Any property sold at public auction;
(11) Any transfer of property where the owner has not resided on the property at any time within three (3) years prior to the date of transfer; and
(12) Any transfer from a debtor in a chapter 7 or a chapter 13 bankruptcy to a creditor or third party by a deed in lieu of foreclosure or by a quitclaim deed.
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