The last thing you want to do is give someone a reason to look elsewhere. This is why many people have a difficulty wrapping their minds around the idea of disclosures.
What are disclosures?
Essentially, it’s the seller’s obligation to inform a potential buyer of any problems with the property.
But wouldn’t that convince the buyer to pass on the property?
Perhaps. But these disclosures are not only the right thing to do, they are also the law. Failing to properly disclose known deficiencies in the property can result in the need for a residential real estate attorney.
Litigation is almost never a positive aspect of the residential real estate sales process. However, it’s occasionally necessary. Proper adherence to disclosure laws is one major way to keep your sales process moving along smoothly.
But this can only be done with proper information. This is why we’ve compiled everything you need to know about disclosures to avoid residential real estate litigation throughout the sales process.
What is the Tennessee Disclosure Law?
The legalities of disclosures in real estate sales are defined by § 66-5-201. This states:
“The required disclosure shall be given in good faith by the owner or owners of property that is being transferred and shall be subject to the requirements of this part.”
The phrase “good faith” refers to the assumption that all parties involved will act in an honest and fair manner.This goes on to be refined in § 66-5-202:
“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.”
These disclaimers are required unless the proposed buyer of a property completes a waiver or exemption. This removes the responsibility by the owner to list all current defects known in the property.
Waiving the notification of defects might seem as if the buyer is acting against their own best interest, but buying a property “as is” sometimes comes with a much lower price tag.
However, every transaction that doesn’t include this waiver (which is much less common) or exemption must include the necessary disclosures. Exemptions are permitted, for example, in transactions involving the sale of a property in which the seller has never resided.
What Is a Failure to Disclose?
A seller that doesn’t disclose known issues is liable to face litigation or a cancelling of the sales contract. Concealing a known defect is a type of fraud and can open the seller to legal action.
The disclosure form acts as a representation of all known defects by the seller. Claiming a defect was intentionally left off this list requires the buyer to prove the seller had knowledge of a situation but chose not to include it on the disclosure form.
A residential real estate litigation attorney can help the buyer put together a proper argument to prove the seller created a misleading disclosure document in order to convince the buyer to complete the transaction.
The buyer needs to prove not only that the seller had knowledge of the defect, but also that the seller intentionally hid it during the sales process and that it presents a possible danger to the property or to the buyer themself.
What Do You Need to Disclose in Tennessee?
The seller is obligated to disclose any known defects associated with the property. Any defect that can have an impact on the stability of the property and health of the buyer needs to be disclosed. This includes circumstances such as:
- Existence of environmental hazards
- Encroachments or easements on the property
- Modifications to the structure lacking necessary permits
- Soil issues that cause slipping or sliding of the structure
- Water intrusion issues
- Previous structural damage
- Existence of a flood plain
- And more
The Tennessee Association of Realtors provides a free form that can be filled out to address the main points of interest and common forms of issues to disclose. This can act as a disclosure form for a residential real estate sale.
Contacting a Residential Real Estate Litigation Attorney
It’s best to work with a residential real estate litigation attorney to ensure you have sufficiently fulfilled your duties for disclosing defects with the property you intend to sell. A little extra work on the front end of the process can save you a lot of problems down the road.
The professionals at Rochford Law & Real Estate Title help people in the Nashville area navigate their residential real estate transactions. Avoiding litigation makes the process more smooth, but we are there to help if this sometimes unavoidable step arises.